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1. INTRODUCTION:
1.1 The Winners Royal Varsha Credit Cooperative Society Limited ("Society") is committed to conducting its business in a prudent and effective manner. To achieve this, the Society shall establish and maintain a comprehensive risk management framework that includes the following:
(a) A process for identifying, assessing, mitigating, and monitoring risks associated with the Society's operations.
(b) A process for setting appropriate controls and procedures to manage risks effectively.
(c) A process for regularly reviewing and updating risk management policies and procedures to ensure their effectiveness.
2. GOVERNANCE:
2.1.The Society's Board of Directors shall be responsible for overseeing the Society's risk management activities.
2.2.The Society shall appoint a Chief Risk Officer (CRO) or any other Risk Officer in charge of the function, who shall be responsible for implementing and maintaining the Society's risk management framework.
2.3.The Society shall appoint a Credit Monitoring Officer (CMO) who shall be responsible for monitoring the credit portfolio of the Society, including MSME loans, business loans, personal loans, gold loans, and group micro-credits.
3. RISK IDENTIFICATION AND ASSESSMENT:
3.1.The Society shall establish and maintain a comprehensive process for identifying and assessing risks associated with the Society's operations.
3.2.The CRO or any other Risk Officer in charge of the function shall be responsible for ensuring that risks are identified and assessed on an ongoing basis.
3.3.The CMO shall be responsible for identifying and assessing credit risks associated with the Society's lending activities.
3.4.The Society shall also identify and assess risks associated with accepting deposits from members.
4. RISK MITIGATION:
4.1.The Society shall establish and maintain a comprehensive process for mitigating risks associated with the Society's operations.
4.2.The CRO or any other Risk Officer in charge of the function shall be responsible for ensuring that appropriate controls and procedures are put in place to mitigate identified risks.
4.3.The CMO shall be responsible for ensuring that appropriate credit risk mitigation measures are in place, including the establishment of appropriate credit limits, monitoring of borrower creditworthiness, and monitoring of loan performance.
4.4.The Society shall also establish appropriate controls and procedures to mitigate risks associated with accepting deposits from members.
5. RISK MONITORING AND REPORTING:
5.1.The Society shall establish and maintain a comprehensive process for monitoring and reporting risks associated with the Society's operations.
5.2.The CRO or any other Risk Officer in charge of the function shall be responsible for ensuring that risks are monitored on an ongoing basis and that appropriate action is taken in the event of any material deviation from established controls and procedures.
5.3.The CMO shall be responsible for monitoring the credit portfolio of the Society on an ongoing basis and for reporting to the CRO or any other Risk Officer in charge of the function on credit performance.
5.4.The Society shall also establish appropriate reporting mechanisms to monitor deposit risks and to ensure compliance with regulatory requirements.
6. COMPLIANCE RISK MANAGEMENT:
6.1 The Society shall establish and maintain a comprehensive compliance risk management framework that includes the following:
(a) A process for identifying and assessing all potential compliance risks associated with the Society's operations, including issues related to regulatory compliance, customer privacy, and data protection.
(b) A process for setting appropriate controls and procedures to mitigate compliance risks.
(c) A process for monitoring compliance risk exposure and taking appropriate action in the event of any material deviation from established controls and procedures.
7. OPERATIONAL RISK MANAGEMENT:
7.1. The Society shall establish and maintain a comprehensive operational risk management framework that includes the following:
(a) A process for identifying and assessing all potential operational risks associated with the Society's operations, including risks related to people, processes, systems, and external events.
(b) A process for setting appropriate controls and procedures to mitigate operational risks.
(c) A process for monitoring operational risk exposure and taking appropriate action in the event of any material deviation from established controls and procedures.
8. CREDIT MONITORING OFFICER:
8.1. The CMO shall be responsible for monitoring the credit portfolio of the Society and reporting credit performance to the CRO or any other Risk Officer in charge of the function.
8.2. The CMO shall establish appropriate credit risk management controls and procedures to ensure that credit risk exposure is monitored on an ongoing basis.
8.3. The CMO shall be responsible for the following:
(a) Monitoring the credit quality of the Society's loan portfolio.
(b) Monitoring borrower creditworthiness and loan performance.
(c) Ensuring compliance with lending policies and procedures.
(d) Developing and implementing appropriate risk mitigation measures.
(e) Providing regular reports to the CRO or any other Risk Officer in charge of the function on credit performance and risk exposure.
9. AUCTION OF GOLD ON RECOVERY:
9.1. In the event of non-payment of gold loans by the borrower, the Society shall have the right to sell the pledged gold through a public auction process.
9.2. The Society shall establish appropriate procedures for the auction of pledged gold, including the following:
(a) The identification of qualified auctioneers.
(b) The establishment of appropriate criteria for the selection ofauctioneers.
(c) The establishment of appropriate procedures for the conduct of theauction.
(d) The establishment of appropriate procedures for the management of auction proceeds.
10. CONCLUSION:
10.1. The Society shall establish and maintain a comprehensive risk management framework that includes appropriate policies, procedures, and controls to manage risks associated with the Society's operations effectively.
10.2. The Society shall ensure that the framework is regularly reviewed and updated to ensure its continued effectiveness.
10.3. The Society shall ensure that all employees and stakeholders are aware of their roles and responsibilities in implementing and maintaining the risk management framework.
