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Risk Management Framework

The Assignment
MaGC was appointed to develop the Risk Management Framework (RMF) for a development bank in Bhutan with a turnover of about USD 33 million (BTN 2.5 billion). The Bank desired to develop a comprehensive Risk Management Framework (RMF) with policies in line with Royal Monetary Authority and other regulatory agencies’ requirements.

MaGC Approach and Methodology 
A diagnostic study to understand the current status of risk management policies, processes, and reporting was undertaken comprising of structured interviews, field visits to branches, review of documents and reports, data collection through questionnaires, best practices study, followed by a review of risk management practices globally in the banking sector. This was followed by extensive consultations with the client on the contours of the proposed Framework. The client’s risk management team was actively involved and regularly apprised throughout the exercise.

The Output 
A RMF comprising of – policy, processes (including document and report formats), analysis model with rating mechanism, and stress test model was provided to client. A four-day virtual training was conducted to sensitise stakeholders to use the RMF. The Framework equipped the Board Risk Committee with a tool to oversee the risk management in the bank. It helped the Management to inculcate a risk-aware culture in the organisation.

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