   Risk  exposure  arising  from  business 
            activities
           Need to effectively manage because of
             Potential business losses
             Ensure business continuity
           Wider and/or complex risk requires more 
            prudent management
           Risk appetite determines risk exposure
           Optimize risk-reward trade-off rather than 
            minimize/eliminate risk.
           Risk taking is inherent activity but
             neither engage in business with unnecessary 
                risk nor absorb risk that can be transferred
           Regulatory Case vs Business Case
           Strategic Level
             Encompasses senior management and BOD
           Macro Level
             Within a business area or across business lines
           Micro Level
             ‘On-the-line’ risk management
           Need to have properly structured RM
           Introduced  in  2003  (BSD  Circular  7  of 
            2003)
           Issued to enable financial institutions to 
            establish their own RM procedures
           Provide  an  overview  of  actions  and  not 
            intended               to        detail           every            control 
            procedure
           Flexible and adaptable with the size and 
            complexity of business
           Areas covered
             Credit Risk
             Market Risk
             Liquidity Risk
             Operational Risk
           Certain basic principles for risk 
            management applicable to all institutions 
            irrespective of size and complexity