The risk management policy of the Bank is established according to “On Banks,” a Law of the Republic of Azerbaijan, normative legal documents of the Central Bank of the Republic of Azerbaijan, the Financial Markets Supervisory Authority, the relevant requirements of the Basel Committee, and the Charter of “Bank Respublika” OJSC.
The policy's functions are:
- To plan measures to minimize possible losses of the Bank due to adverse events;
- To set the limits and responsibilities necessary to reduce risks;
- To ensure the normal operation of the bank in case of emergencies;
- To take measures to protect the bank from continuous risks;
- To ensure the appropriate balance between the funds and assets of the bank;
- To ensure the effective management of assets and liabilities.
Key principles of the policy:
Awareness of risks:
Management awareness and involvement:
Restriction of risks:
Segregation of duties:
1st line of defense - includes all groups whose activities pose a direct risk to the Bank, branches and departments providing services to the customers of the Bank, as well as structural units developing products and services
2nd line of defense - includes structural units in charge of risk management, finance and accounting, legal affairs and compliance, as well as management of security risks. The structural unit responsible for the management of legal and compliance risks monitors the compliance of bank operations with legal and regulatory requirements.
3rd line of defense - includes an independent internal audit unit that has the authority to evaluate the first and second lines of defense. The internal audit unit carries out both risk-based and general audits of the effectiveness and improvement of procedures and mechanisms, as well as their proper implementation.
Information technologies and quality of information:
Improvement of methods:
Risk culture:
Disclosure of information:
The following management units are responsible for the risk management process:
- Supervisory Board
- Risk Management Committee
- Management Board
- Senior Risk Administrator
- Credit Committee
- Assets and Liabilities Management Committee
- Department of Risk Management
- Bank structure business
- Department of Internal Audit
The risk management decision-making process for the Bank is as follows:
- Risk Management: by the Supervisory Board, based on information provided by the Risk Management Committee;
- Market and liquidity risks: by the Supervisory Board, based on information provided by the Assets and Liabilities Management Committee;
- Credit risks: by the Supervisory Board, based on information provided by the Credit Committee;
- Operational risks: by the Supervisory Board, based on information provided by the Risk Management Committee;
- Strategy, goodwill, and other risks: by the Supervisory Board, based on information provided by the Management Board.
Updated: 24.05.2019
