Why is it important for bank boards to proactively monitor portfolios and address potential risks
RBI Governor emphasized the need for bank boards to manage risks and monitor portfolios diligently.
- Ensures Financial Stability: Proactive monitoring helps in identifying and addressing potential risks early, minimizing the impact on the bank's financial stability.
- Compliance with Regulations: It is essential for bank boards to adhere to regulatory guidelines and policies, and proactive risk management helps in meeting these requirements.
- Enhances Trust and Reputation: Effective risk management practices demonstrate the bank's commitment to financial soundness, building trust with stakeholders and maintaining a positive reputation.
- Optimizes Resource Allocation: By identifying risks and potential vulnerabilities, bank boards can allocate resources efficiently to mitigate these risks and protect the bank's assets.
- Improves Decision-making: Regular monitoring enables the board to make informed decisions to safeguard the bank's interests and ensure long-term sustainability.
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7 months ago