PROFILE BANK INA PERDANA
RISK MANAGEMENT POLICIES
IMPLEMENTATION OF RISK MANAGEMENT
Implementation of Risk Management in Bank Ina reference to the provisions stipulated in Bank Indonesia Regulation (PBI) No. 5/8 / PBI / 2003, as amended by Regulation No. 11/25 / PBI / 2009, the implementation of which is set in a Circular Letter of Bank Indonesia (BI SE) No. 5/21 / DPNP, as amended by Circular Letter No. 13/23 / DPNP, where implementation has been adapted to the complexity of operations and business of the Bank. Internally policy contained in the Risk Management Risk Management Implementation Guidelines which include
- Guidelines for the Application of Risk Management General (No.RMG / 001/1211)
- Guidelines for Risk Assessment Profile (No.RMG / 002/1211)
- Guidelines for Implementation of Credit Risk Management (No.RMG / 003/1211)
- Guidelines for Implementation of Market Risk Management (No.RMG / 004/1211)
- Guidelines for Implementation of Operational Risk Management (No.RMG / 005/1211)
- Guidelines for Liquidity Risk Management (No.RMG / 006/1211)
- Strategic Risk Management Implementation Guide (No.RMG / 007/1211)
- Compliance Risk Management Implementation Guide (No.RMG / 008/1211)
- Guidelines for the Application of Risk Management Law (No.RMG / 009/1211)
- Guidelines for the Application Reputation Risk Management (No.RMG / 010/1211)
Application of Risk Management includes the active supervision of the Board of Commissioners and Directors, Policies, procedures and limits, the adequacy of the identification, measurement, monitoring and risk control and information systems Risk Management and Internal control systems overall.
a) Active Supervision Board of Commissioners and Board of Directors
The Board of Commissioners and Directors are responsible for the effective implementation of Risk Management in Bank Ina. The Board of Commissioners and Board of Directors to provide direction and oversight and mitigation actively and develop a risk management culture. In addition the Board of Commissioners and Board of Directors also ensures adequate organizational structure, assign tasks and responsibilities are clearly on each unit, as well as ensure adequate quantity and quality of human resources to support effective implementation of Risk Management.
In performing its duties, the Board is assisted by the Audit Committee, Risk Monitoring Committee and Remuneration and Nomination Committee.
b) Policies, Procedures and Limit
Guidelines for the Application of Risk Management Bank Ina outlined in the Risk Management Policy approved by the Board of Commissioners and Board of Directors. Framework for Risk Management policies and procedures as well as a clearly defined risk limits in line with the vision, mission and business strategy of the Bank. Preparation of risk management policies and procedures carried out by taking into account the complexity of business activities, risk profile and the level of risk to be taken and regulations established authority and / or sound banking practices.
Every year the risk management policy outlined in the Bank Business Plan (RBB) are prepared in accordance with the vision, mission, business strategy, capital adequacy, human resource capacity and risk appetite to be taken. The policy has been reviewed regularly and adjusted to developments / changes, both internal and external, and take into account their impact on capital, especially the fulfillment of the Capital Adequacy Ratio (CAR).
c) The process of identification, measurement, monitoring and Risk Control and Risk Management Information System.
Risk identification is performed for all business activities of the Bank and carried out in order to analyze the source and possible risks and their impact on the Bank. While the risk measurement is performed to measure the risk exposure of the Bank as a reference for risk control. Risk assessment conducted periodically both for product and portfolio transactions and all business activities of the Bank.
The monitoring of the results of risk assessment carried out by the unit as well as their work by the Risk Management Group. The monitoring results are presented in periodic reports submitted to management in order to mitigate the risks and the actions needed.
d) Internal Control System
The process of implementation of Risk Management is equipped with a reliable internal control system. Any operational activities in Bank Ina guided by standard policies and procedures inherent in it has an adequate system of internal control.
Entire Work Unit Operations and Support Unit and the Internal Audit Working Group responsible for the implementation of the Bank's internal control system that is reliable and effective. The effectiveness of the internal control unit is reviewed periodically by the Internal Audit Group.
The scope of application of Risk Management includes eight (8) types of risk namely Credit Risk, Market Risk, Operational Risk, Liquidity Risk, Legal Risk, Compliance Risk, Strategic Risk and Reputation Risk. The process of identification, measurement and monitoring of risk undertaken by the Working Risk Management Unit independent of the operational working units and the Internal Audit Unit. While each work unit is responsible for managing the risks inherent in his activity.
An overview of the level of risk faced by the Bank obtained from Risk Profile Assessment process, which includes an assessment of the inherent risks and an assessment of the quality of risk management on any type of risk, the implementation process has been following the applicable standard.
Credit risk is the risk of the failure of the debtor and / or other parties to meet obligations to the Bank. Credit risk, according to the business activities of Bank Ina, is based on lending activities, the ownership of financial instruments, transactions between the Bank, as well as commitments and contingencies. Up to now the main source of income of the Bank Ina still rooted in income from lending activities.
Application of Credit Risk Management is performed starting from the initiation of credit, analysis, decision making, disbursement, administration and administration through the handling of non-performing loans. The aim is that the credit risk arising can be maintained within the limits of tolerance and the ability of the Bank's capital and in case of nonperforming loans can be recovered optimally so that the losses arising can be minimized.
The process of credit application analysis carried out by the Work Unit Credit Reviewers are independent of the Business Unit. Making lending decisions made collectively collegial so that no member of the Credit Committee to decide upon its own a credit application. In addition to administering the credit documents, the work unit Credit Administration functions to exercise control over the fulfillment of covenants required before the credit disbursed and supervision of timely payment in accordance with the agreed contract. Work Unit liquefaction process carried out on instructions from the Operations Unit Administration Work Credit after all requirements are met.
In order to reduce the level of losses if there are bad loans, troubled debt management carried out by a special unit that works in focus and independently. To reduce the risk of credit concentration have done credit segmentation by considering the characteristics of each segment of bank credit and control over the segment entered. This segmentation effect on the Bank's policies in determining the adequacy of collateral, credit structure and authority to decide on credit. Formulation of policies in the field of credit discussed in the Bank's Credit Policy Committee.
Market risk is the risk on balance sheet and off-balance sheet including derivative transactions, due to overall changes in market conditions, including the risk of changes in the price of the option, which includes interest rate risk, exchange rate risk, equity risk and commodity risk. Implementation of Market Risk Management aims to minimize the potential negative impact of changing market conditions on assets and capital of the Bank. Implementation of daily market risk control carried out by the Work Unit Treasury and ALCO Committee. While policy and risk limits made by the Risk Management Group as an independent business unit.
As the Bank has a portfolio of non-foreign exchange and trading book is relatively small, Bank Ina Perdana not significantly exposed to market risk. Market risk is sourced to interest rate risk on a portfolio Banking Book, which is the focus to be controlled. Owners Trading Book exposure is only intended to deal with the excess short-term liquidity and is not intended for the establishment of the market with financial instruments such as bonds are illiquid market. The process of mark to market of the book are made daily eksposurtrading conducted by an independent unit by using a source that can be accounted for.
Implementation of control interest rate risk in the Banking Book is done by controlling the gap repricing of asset-liabilities Bank at each time scale. Repricing gap arrangement is done by periodically reviewing lending and deposits discussed at the monthly meeting of ALCO. The aim is that gap-this repricing in line with movements in market interest rates. Treasury business unit is responsible for setting repricing gap by paying attention to remove the gap limit by Risk Management Group. Implementation of daily market risk control carried out by the Treasury work unit.
While the exchange rate risk occurs only in money changer activities with insignificant amount.
Liquidity risk is the risk due to the inability of the Bank to meet its maturing obligations from cash flow funding sources and / or from high-quality liquid assets that can be pledged without disrupting the activities and financial condition of the Bank. The implementation of the Bank's liquidity risk management aims to minimize the potential inability of the Bank in obtaining funding sources of cash flow.
Liquidity risk is controlled by maintaining adequate liquidity by taking into account liquidity and endogenous eksogenik happened. Sentry asset quality made to minimize disruption of cash flow and a possible reduction in liquidity of assets. Risk management is also done with a maturity gap arrangement at every time scale, which was reviewed during the meeting ALCO conducted at least once in a month. Secure sources of liquidity to do with keeping the reputation of the Bank as well as efforts to improve the quality of products and services rendered.
Liquidity risk management conducted by Treasury Working Unit, where the process of identifying, measuring, monitoring and controlling liquidity risk of banks conducted wide by Risk Management Group, including policy-making and liquidity risk limits.
Operational risk is the risk due to the inadequacy and / or failed internal processes, human error, system failure and / or the presence of external events affecting the operations of the Bank, which can be sourced among others in Human Resources (HR), internal processes, systems and infrastructure, as well as external events. Operational risk management is needed to minimize the possible negative impact of the malfunctioning of internal processes, human error, system failure, and / or the occurrence of an external event that may affect the operations of the Bank.
Operational risk control in Bank Ina begins with efforts to raise awareness of the risk (risk awareness) per employee, increased responsibility (accountibility) any operational implementation, and improvement of infrastructure because the Bank realizes that operational risk is unique in that the level of operational risk is influenced olehhuman, process , systems and external events. The higher the awareness and responsibility of each employee to the risk and the presence of processes and technologies that can support operational activities in an efficient and controlled, then the Bank will be less vulnerable to shocks from operational risk.
Control of human error in the implementation of Bank operations, carried out by applying a control function daily check list, which helps the supervisory control of all activities performed in the work unit responsibilty. Pencegahanfraud done by applying strategianti fraud involving all employees. Implementation of anti-fraud strategy refers to the internal policies and procedures that have been set. Enhancing the quality of human resources is done by continuous training. Operational risk control is also done with the effective functioning of supervision, review and improvement of SOPs, improved internal controls and periodic review of employee remuneration.
Improvements in infrastructure, especially infrastructure Information Technology Systems, is continuously carried out, among others, by improving the quality of Data Center (DC) including the quality of the Disaster Recovery Center (DRC), the quality of communication networks, as well as increased quality software application on the Core Banking System. The infrastructure improvements intended other than to improve performance, as well as to improve the quality of the built in control on operational processes. Bank products and services development with information technology-based features as well as the implementation of the current banking regulation also requires the Bank to provide the infrastructure adequate Information Technology Systems.
With effective operational risk management process expected losses can be estimated (expected loss) can be minimized so as to improve operational efficiency and capital allocation, which in turn can improve the competitiveness of the Bank.
Operational risk management is the responsibility of all work units where the process of identification, measurement, monitoring and control of operational risks conducted by SKMR as bank wide.
Strategic risk is the risk due to imprecision in decision-making and / or execution of a strategic decision as well as the failure to address the changing business environment. Strategic risk comes from their weaknesses and inaccuracies in planning the Bank's strategy, weaknesses in management information systems, weaknesses internal and external environmental analysis, implementation inaccuracy and failure to anticipate changes in the business environment. For control strategic risk, the Bank Business Plan prepared conservatively taking into account the strengths and weaknesses of the Bank and take into consideration the ability of resources, both financial resources, infrastructure and its human resources. To minimize the deviation of the implementation of the Bank's business plan, have made communication to every level of the organization, both during the preparation of plans and during the implementation review conducted regularly every semester. Control of strategic risk is also carried out with the monitoring of the performance of banks that are the result of the implementation of the business strategy and business plan of the Bank. The monitoring process is done periodically using management information system which regularly presents the report in the context of the decision by the Bank Management.
Compliance risk is the risk due to the Bank does not comply with and / or implement legislation and regulations. Compliance risk is sourced from legal behavior that is behavior / activity that deviates Bank or abuse of the provision or legislation and organizational behavior that is behavior / activity bank deviating or contrary to generally applicable standards.Control of compliance risk is done to minimize the possible negative impact of Bank activities that deviate from regulations, rules and standards that are generally accepted. To keep every activity the Bank always obey the laws and regulations have routinely done promoting and disseminating the rules (through training and spending memorandum) to all units concerned to each regulation can be understood and implemented correctly. To raise awareness of all employees of the importance of adherence to the rules and regulations, have been prepared in compliance charter as guidance for all parties in Bank Ina and organizations have formally enacted. To ensure compliance with the Bank's operation to all the rules and regulations surrounding it must be should that the entire system and operational procedures in compliance with the rules and regulations applicable authority. Therefore it has been done Quality Assurance Policy and Procedure which is a process assesment to internal policies and procedures carried out by the Compliance Unit to any systems, procedures or internal policies that will be or have been issued. Thus any potential non-compliance of the provisions of the Bank statutory or regulatory can be detected and corrected. Thus any potential non-compliance of the provisions of the Bank statutory or regulatory can be detected and corrected. The next order of organizational behavior does not cripple the standard, has created a code of conduct that contains the ethics that must be done by each employee. In addition to ensuring compliance aspects of compliance in nominal transactions greater then any credit facilities over a certain amount must go through the process of compliance test.
Legal risk is the risk caused by the weakness of the judicial aspect, which is partly due to lawsuits, the absence of legislation that support, or weakness such as noncompliance with the terms of the engagement contract validity and binding of collateral that is not perfect. The application of the legal risks aims to minimize the potential negative impact of the weakness of the juridical, to the lack of and / or changes in legislation and litigation.
Legal risk control process by performing periodic review of any contracts and agreements between the Bank and other parties, among others by conducting a reassessment of the effectiveness of the process to ascertain the validity of enforceability of rights in contracts and agreements that have been made. Identification of legal risk activity performed on the entire collection and provision of funds, treasury and investment, operations and services, information systems technology and human resource management. Every event that potentially pose legal risks, administered and administered, in addition to assessing the level of legal risk faced by the Bank, as well as lessons on each case and to anticipate possible claims or litigation. Corporate work unit Legal to responsibility against legal risk management responsibility
Reputation risk is the risk due to the reduced level of confidence of stakeholders (stakeholders), which comes from the negative perception of the Bank. Negative perception of the Bank can be caused by events that lowers the reputation as customer complaints on the products and services provided, weaknesses in governance and corporate culture and business practices that deviate from the standard. Therefore, the implementation of reputation risk management is done with the effort to prevent / minimize the occurrence of events that can lower the reputation of the Bank among others through the implementation of programCorporate Social Responsibility (CSR), manages the disclosure of information, to communicate regularly with stakeholders, secure the quality of products and services, custody business ethics in transactions with customers as well as money market transactions. Every occurrence of complaints from customers, the Bank seeks to respond to and follow up quickly through a unit at the head office and branches that have been enabled to manage and resolve customer complaints. In order to maintain the reputation, the Bank also intends to maintain the transparency of products and services with the provision of correct information about the benefits and risks of products and services offered to the public. Every event related to reputation risk are recorded and administered so that it can be a lesson for the future and projecting potential losses that may arise and the preventive measures that should be done. As a public company Bank applies the principle of disclosure of information to convey information that is significant to the community. The information management is the duty and responsibility of the Corporate Secretary.
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