The Bank has a robust process to identify and monitor risks and respond appropriately. The Bank continuously reviews and enhances the methods for identification and assessment of risks, and sets appropriate metrics and controls, and mitigants for managing significant risks. This is further strengthened by investing in capability building and using Artificial Intelligence (AI)/Machine Learning (ML) techniques to enhance credit underwriting and early warning capabilities.
In fiscal 2023, the Bank continued to monitor the risks it is exposed to, including economic, credit, market, liquidity, cyber, information technology and employee related risks. Apart from these traditional risks, the Bank is also cognisant of emerging new-age risks like climate change. The Bank has initiated steps to embed climate risk assessment and climate risk management as part of the Bank’s risk management framework. A dedicated team within the Risk Management Group has been set up to develop a framework to assess the physical and transition risks of companies in the Bank’s portfolio, and manage these risks as part of the credit evaluation process. The Bank has also been participating in policy-making by providing inputs and supporting the regulator in assessing impact of climate change risks on specific sectors.
| Risk Type | Key Risks | Our Response |
|---|---|---|
| Economic Risk | Volatile economic environment driven by rising inflation, global monetary policy stance and geopolitical tensions. | Continuously monitored developments in the global and Indian economy, including country risk and sector-specific risks and responded accordingly. |
| Credit Risk | Volatile market conditions and rising interest rates posed challenges for customers. | Ensured effective risk management across business segments, strengthened by ongoing reviews for early identification and stress testing; the Bank maintained strong capital and liquidity positions, which were significantly above regulatory requirements. |
| Market and Liquidity Risk | Challenges posed by tightening monetary policy, withdrawal of liquidity by the central bank and exchange rate movements. | Robust policies, and periodic reviews at the level of Board and sub committees; strategic priority towards asset liability management and strengthening the Bank's liability franchise. |
| Cyber Risk | Growing threat of cyberattacks combined with increasing digitisation of banking products and services could expose the Bank to security risks. The Bank also leverages partnerships with third parties and these could also be a source for information security risks. | Investing on building resilience and effectively respond to cyberattacks; the Bank has laid significant focus on data privacy and data loss prevention mechanisms. There were no material incidents of security breaches or data loss during fiscal 2023. |
| Technology Risk | The growing customer dependence on digital transactions and the rising volumes of such transactions requires banks to focus on the availability and scalability of our systems. Misalignment between business and IT strategies is a formidable risk. | The Bank is proactively investing in technology and improving its response to changing technological dynamics. The governance framework and Board-level oversight ensures that information technology strategy is aligned with the business strategy with appropriate policies and control frameworks. The Bank’s IT systems were stable and largely uninterrupted during fiscal 2023. |
| Employee Risk | Retention of employees and ability to attract and motivate talented professionals is critical for the successful implementation of the Bank’s strategy and competing effectively. | Provide opportunity for job rotation and enhance career growth and development; employee well-being and upskilling are key priorities. |
| Compliance Risk | As a systemically important bank in India, compliance with regulations and preparedness to evolving developments is a key priority for the Bank. | The Bank has established well-articulated policies and controls to ensure compliance with laws and regulations. Continuous evaluation and updating the policies to remain relevant and adopt best practices is an ongoing effort. A strong compliance culture driven by the Bank’s leadership is enabling timely action. |
Risk Type
Key Risks
Our Response
Volatile economic environment driven by rising inflation, global monetary policy stance and geopolitical tensions.
Continuously monitored developments in the global and Indian economy, including country risk and sector-specific risks and responded accordingly.
Volatile market conditions and rising interest rates posed challenges for customers.
Ensured effective risk management across business segments, strengthened by ongoing reviews for early identification and stress testing; the Bank maintained strong capital and liquidity positions, which were significantly above regulatory requirements.
Challenges posed by tightening monetary policy, withdrawal of liquidity by the central bank and exchange rate movements.
Robust policies, and periodic reviews at the level of Board and sub committees; strategic priority towards asset liability management and strengthening the Bank's liability franchise.
Growing threat of cyberattacks combined with increasing digitisation of banking products and services could expose the Bank to security risks. The Bank also leverages partnerships with third parties and these could also be a source for information security risks.
Investing on building resilience and effectively respond to cyberattacks; the Bank has laid significant focus on data privacy and data loss prevention mechanisms. There were no material incidents of security breaches or data loss during fiscal 2023.
The growing customer dependence on digital transactions and the rising volumes of such transactions requires banks to focus on the availability and scalability of our systems. Misalignment between business and IT strategies is a formidable risk.
The Bank is proactively investing in technology and improving its response to changing technological dynamics. The governance framework and Board-level oversight ensures that information technology strategy is aligned with the business strategy with appropriate policies and control frameworks. The Bank’s IT systems were stable and largely uninterrupted during fiscal 2023.
Retention of employees and ability to attract and motivate talented professionals is critical for the successful implementation of the Bank’s strategy and competing effectively.
Provide opportunity for job rotation and enhance career growth and development; employee well-being and upskilling are key priorities.
As a systemically important bank in India, compliance with regulations and preparedness to evolving developments is a key priority for the Bank.
The Bank has established well-articulated policies and controls to ensure compliance with laws and regulations. Continuous evaluation and updating the policies to remain relevant and adopt best practices is an ongoing effort. A strong compliance culture driven by the Bank’s leadership is enabling timely action.
Risk Governance Framework 
