Treasury Operations in Indian Banks -- Challenges in Operational Risk Management

Operational risk is embedded everywhere and its assessment, at most of the occasions, is subjective because operational risks are mainly entrenched to ‘work in progress' and difficult to quantify. Developing an ORM framework is an evolutionary process and takes time and efforts to not only identify and understand the risks but also the mitigation techniques in an environment that is constantly changing. Addressing operational risks in an effective manner is important for business continuity and sustainability of an organisation, as experts believe, these have final impact on the market value of a firm. For the framework to succeed, it is extremely important to develop a culture of risk awareness across treasury and ensure that all staff is involved in developing and implementing the framework. We discuss all these factors in our subject article with specify reference to Treasury activities as these are important and premier income generator of a bank/FI and it is very difficult for them to produce revenue growth and improve earnings without active and consistence positive involvement of treasury operations