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 […]
Audit - 21. page
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, […]
Provisions in case of foreign branches and subsidiaries of the Indian Banks
Provisions in case of foreign branches and subsidiaries of the Indian Banks The RBI vide its circular No. DBOD.No.BP.BC.89 /21.04.141/2008-09 dated December 1, 2008 on “Operations of foreign branches and […]
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 […]