Risk Management System

Risk management in JSC Development Bank of the Republic of Belarus forms an integral part of corporate culture and allows for providing of the Bank’s financial stability in order to realize the strategic goals set up by the shareholders.

The Bank’s risk management system is based upon recommendations from Basel Committee on Banking Supervision, the National Bank of the Republic of Belarus and practical solutions elaborated in this area of international banking practice.

The Bank’s risk management system is based upon the following approaches:

• Expert knowledge approach. The Bank is aware  of all key risks  associated with banking operations.  Decisions on carrying out of any operation (transaction) are made after the  comprehensive analysis of risks resulting from such operation (transaction). Each Bank’s employee knows about the risk management system accepted  within the Bank and takes part in risk management process within the frames of his \her duties.

• Adequacy approach. The Bank’s  organizational chart, risk management procedures and instruments applied are adequate to  the scope and complexity of banking operations to be effected and other activities. The level at which the operation (transaction) is approved  depends on the  volume of associated risk (the higher is the risk level, the higher level is required to make a decision on the transaction being conducted).
  
• Responsibilities distribution approach. The Bank provides for  an ongoing  participation of management bodies in organization and functioning of risk management system, as well as for clear distribution of risk management powers and responsibilities between the Supervisory Board, Risk Management Committee of the Supervisory Board, Audit Committee of the Supervisory Board, Management Board, other collective bodies and officers of the Bank, Risk Management Department, departments generating risks and interaction between the above mentioned participants of risk management process.
  
• Continuity and integration approach. Risk management is a continuous process integrated into  business processes  through inclusion into them of test operations excluding the breaching of limits of risk level (volume) and allowing  to monitor the actual risk level (volume).
  
• Independence approach. The Bank’s risk management department is  separated from risk generating  departments   and reports directly to an officer responsible for risk management in the Bank who in its turn reports directly to the Chairman of the Management Board.
  
• Complexity approach. The Bank employs the comprehensive risk management system which provides for management of risks that can affect the Bank’s operations. The general risk management  is coordinated  by the Bank’s risk management department.
  
• Awareness approach. The Bank is forming  a management reporting system on risk management system functioning and the risks level (volume)  through which  the Bank’s management bodies are periodically informed.
  
• Improvement approach. The Bank is constantly  improving the  risk management system subject to results of periodical assessment of its efficiency.
  

In its operations the Bank  may face  the key  banking risks such as credit risk, country risk, market risk, bank portfolio interest risk, liquidity risk operational risk, strategic risk, reputational risk, concentration risk.

The risk management organizational chart, information flows generated, distribution of spheres of responsibilities and powers of the Bank’s  officers, procedures and order of  interaction between the departments, reporting and accountability of risk management department, process of notifying the departments responsible for risks assumed in regard to risk management  issues ,  decision making procedure are arranged by the Bank in such  a way as to exclude the conflict of interests including among others between risk management department and risk generating departments as well as other departments conducting internal control with the Bank.

The organizational chart of the risk management system includes: Supervisory Board, Risk Management Committee and Audit Committee of the Supervisory Board, Bank’s Management Board, Financial Committee, Credit Committee of the Bank (Credit Committee of the branch office), Toxic Assets Committee, officer responsible for risk management, risk management department, internal control department, audit unit, Bank’s departments.

As approved by the Supervisory Board  (resolution No14 dd 17.03.2022) Head of Risk-Management Department D.G. Tsekhanovich is appointed the officer responsible for risk management.

The Bank is conducting risk management by means of continuous identification, assessing, monitoring, restricting and controlling of the risks assumed. Methodological approaches to risk management,  description of approaches, models, composition of management risk  statements are specified  by separate  local regulatory legal acts accepted by the Bank.