Qualitative Disclosure :

Banks should discuss their risk management policies pertaining to derivatives with a specific reference to the extent to which derivatives are used, the associated risks and business purposes served. This discussion also includes

(a) the structure and organization for management of risk in derivatives trading,

(b) the scope and nature of risk measurement, risk reporting and risk monitoring systems,

(c) policies for hedging and/or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants and accounting policy for recording hedge and non-hedge transactions; recognition of income, premiums and discounts; valuation of outstanding contracts; provisioning, collateral and credit risk mitigation