BANK’S RISK MANAGEMENT PROCESS SET FOR REVIEW AS NEW TOPICS EMERGE

Nepal Rastra Bank’s recent review of its risk management process has highlighted the need for a thorough evaluation and prioritization of its risk assessment framework. The bank’s Risk Management Unit and Committee have been responsible for monitoring and reporting on risks, but new topics are emerging that require a re-evaluation of the existing process.

Key Findings

• The review has identified several areas where the bank needs to improve its risk management practices.
• Reputational risk is a major concern due to price rises and financial system instability.
• Continuous monitoring and assessment of risk by the bank’s management is essential.
• The Risk Management Unit needs to review processes and procedures to ensure effectiveness in identifying, assessing, mitigating, and reporting on risks.

Recommendations

Review and Update

1. Conduct a thorough review of the bank’s risk management process and procedures.
2. Update the risk register to reflect new topics and emerging risks.
3. Review and revise risk assessment criteria as necessary.
4. Implement new controls and procedures to address identified weaknesses.

Business Continuity Planning

• Develop a business continuity plan (BCP) that outlines steps to be taken in the event of a disruption.
• Regularly review and test the effectiveness of the BCP.

Training and Capacity Building

• Provide training on risk management practices and procedures for all staff members, particularly new employees.
• Ensure that all staff members understand their roles and responsibilities in managing risk.

Conclusion

The review has highlighted the importance of a proactive approach to risk management at Nepal Rastra Bank. By implementing these recommendations, the bank can ensure that its risk management process is effective and robust, and that it is well-positioned to address emerging risks and challenges in the future.