Inquisitive Mind

Reserve Bank of India (RBI) had released a guidance note on operational risk management and operational resilience. What is Operational Risk? Operational Risk means the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events.  It includes legal risk but excludes strategic and reputational risk. It is inherent in all banking / financial products, activities, processes and systems. Basel Committee on Banking Supervision (BCBS) recognized Operational Risk as a distinct class of risk in 2001, outside of credit and market risks. What is Operational Risk Management and Operational Resilience? Operational Risk Management refers to entire gamut of activities right from risk identification, measurement and assessment, monitoring and control, mitigation, reporting to senior management and the Board of Directors on the RE’s risk exposures, Business Continuity Management, and learning through feedback for improvement. Operational Resilien...

Reserve Bank of India (RBI) has released the framework for recognition of Self-Regulatory Organisations (SROs) in Financial Markets regulated by RBI. What is the need of Self-Regulatory Organisations in Financial Markets regulated by RBI? RBI is tasked with the regulation, development and oversight of (i) Interest rate markets, including the Government securities market; (ii) Money markets, including the market for repo in Government securities and corporate bonds; (iii) Foreign exchange markets; (iv) Derivatives on interest rates / prices, foreign exchange rates and credit. RBI is also responsible for the regulation of financial market infrastructure, including financial market benchmarks, for these markets.  With the growth of the Regulated Entities (REs), in terms of number as well as scale of operations, increase in adoption of innovative technologies and enhanced customer outreach, a need is felt to develop better industry standards for self-regulation. Self-Regulatory Organis...