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Audit - 21. page

Limit Exceptions

Limit Exceptions A limit exception is a trade or position specific authorization to exceed a limit for a defined period of time. All limit exceptions must be approved in advance […]

Re-structuring of derivative contracts

Re-structuring of derivative contracts In cases where a derivative contract is restructured, the mark-tomarket value of the contract on the date of restructuring should be cash settled. For this purpose, […]

Risk management

Risk management This is a function that can sit well in the middle office provided it is properly staffed by officers who understand fully the business and risks involved – […]

Risk Identification Process

Risk Identification Process Price or Rate Risk Foreign Exchange Rate Movement Risk Foreign exchange rate movement risk arises from net exchange position in a currency. If the position is long […]

Risk Management Limits and Monitoring

Risk Management Limits and Monitoring All banks, managements should have a risk management policy, laying down clear guidelines for concluding the transactions and institutionalise the arrangements for a periodical review […]

Independent Risk control

Independent Risk control There should be a mechanism within each entity for independently monitoring and controlling the various risks in derivatives. The inter-relationship between the different types of risks needs […]

Operational Controls

Operational Controls The nature of the controls in place to manage operational risk must be commensurate with the scale and complexity of the derivatives activity being undertaken. The operational controls […]

Prudential Norms Relating to Derivatives

Prudential Norms Relating to Derivatives The prudential norms relating to derivatives – minimum capital adequacy requirement, credit exposure norms, ALM etc. will be as prescribed by RBI from time to […]

Asset Classification of Derivatives

Asset Classification of Derivatives RBI vide its Circular No. DBOD.No.BP.BC.57/ 21.04.157/2008-09 dated October 13, 2008 on “Prudential Norms for Off-Balance Sheet Exposures of Banks” and Circular No. RBI/2015-16/101 DBR.No.BP.BC.2/21.04.048/2015-16 dated […]