Questions

What is risk based supervision RBI?

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What is risk based supervision RBI?

The RBS approach essentially entails the allocation of supervisory resources and paying supervisory attention in accordance with the risk profile of each institution. The approach is expected to optimize utilisation of supervisory resources and minimize the impact of crisis situation in the financial system.

What is the purpose of risk based supervision?

Risk-based supervision (RBS) increases the effectiveness of supervision through improving supervisory outcomes whilst also increasing efficiency through improved resource allocation and processes. It involves allocating resources to the areas of greatest risk.

What is Camels rating system for banks?

CAMELS is an international rating system used by regulatory banking authorities to rate financial institutions, according to the six factors represented by its acronym. The CAMELS acronym stands for “Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity.”

Why is RBI audit known as risk based supervision?

The primary focus of risk-based internal audit will be to provide reasonable assurance to the Board and top management about the adequacy and effectiveness of the risk management and control framework in the banks’ operations.

How do you mitigate risk in banking?

In order to be able to mitigate such risks banks simply use hedging contracts. They use financial derivatives which are freely available for sale in any financial market. Using contracts like forwards, options and swaps, banks are able to almost eliminate market risks from their balance sheet.

What is risk based approach to AML CFT?

A RBA to AML/CFT means that countries, competent authorities and financial institutions8, are expected to identify, assess and understand the ML/TF risks to which they are exposed and take AML/CFT measures commensurate to those risks in order to mitigate them effectively.

What are the core requirements of a risk based approach?

Generally an RBA will involve:

  • identifying the risks you face.
  • assessing the risks you face.
  • designing and implementing systems and controls to mitigate those risks.
  • monitoring your systems and controls.
  • recording what you have done and why.
  • reviewing your risks.

What does camels stand for in banking?

The acronym “CAMEL” refers to the five components of a bank’s condition that are assessed: Capital adequacy, Asset quality, Management, Earnings, and Liquidity. A sixth component, a bank’s Sensitivity to market risk, was added in 1997; hence the acronym was changed to CAMELS.

What is a CRA rating in banking?

The institution’s CRA rating; A description of the financial institution; A description of the financial institution’s assessment area(s); Conclusions of the financial institution’s CRA performance, including the facts, data and analyses that were used to form such conclusions.