ICICI Bank 2014 Annual Report Download - page 53

Annual Report 2013-2014 51
fraud, inadequate training and employee errors. Operational risk in the Bank is managed through a
comprehensive system of internal controls, systems and procedures to monitor transactions, key backup
procedures and undertaking regular contingency planning. The control framework is designed based on
categorisation of functions into front-office comprising business groups, middle office comprising credit
and treasury middle offices, back-office comprising operations, corporate and support functions.
The Bank’s operational risk management governance and framework is defined in the Operational Risk
Management (ORM) Policy approved by the Board of Directors. The Policy is applicable across the Bank
including overseas branches, ensuring a clear accountability and responsibility for management and
mitigation of operational risk, developing a common understanding of operational risk and helping the
business and operation groups to improve internal controls, thereby reducing the probability and potential
impact of losses from operational risks. While the Policy provides a broad framework, detailed standard
operating procedures for operational risk management processes have been established. Operational
risk management framework in the Bank comprises identification and assessment of risks and controls,
new products and process approval framework, measurement through incidents and exposure reporting,
monitoring through key risk indicators and mitigation through process and control enhancement and
insurance. The objective of the Bank’s operational risk management is to manage and control operational
risks within targeted levels of operational risk consistent with the Bank’s risk appetite as specified in
the Operational Risk Management Policy (the Policy). The Bank has formed an independent Operational
Risk Management Group for design, implementation and enhancement of operational risk management
framework and to support business and operations groups in the operational risk management on an
on-going basis.
The Board level committees that undertake supervision and review of operational risk aspects are the
Risk Committee, Fraud Monitoring Committee, Audit Committee and Information Technology Strategy
Committee. The Bank has also constituted an Operational Risk Management Committee (ORMC) to
oversee the operational risk management in the Bank. The ORM Policy specifies the composition, roles
and responsibilities of the ORMC. Other executive level committees that oversee operational risk related
aspects are Product and Process Approval Committee, Outsourcing Committee, Information Security
Committee and Business Continuity Management Steering Committee.
ICICI Bank seeks to ensure that our capital position is commensurate with the risks in our business and
our future growth plans through a robust capital management framework. This includes a comprehensive
internal capital adequacy assessment process conducted annually, which determines the adequate level of
capitalisation necessary to meet regulatory norms and current and future business needs, including under
stress scenarios. We believe we are well-placed to comply with RBI’s guidelines on the implementation
of the Basel III framework in India. We are also working towards migration to the advanced approaches
under the Basel II framework over the medium term, subject to applicable RBI guidelines and approvals.
HUMAN RESOURCES
The Bank’s Human Resources (HR) strategy is aligned to its corporate strategy. The four key elements of
the HR strategy are:
• Bringing the Khayaal Aapka promise alive for the Bank’s customers by weaving it into the Bank’s
culture
• Buildingabestinclassretaildepositfranchise
• Buildingbestinclassriskmanagementorientationandprocesses
• Encouraginginnovationorientation