Guarding Against Risks

The fastchanging financial system has been testing the resilience of even the best of banks and financial institutions globally. Some like RBL Bank have stood up to the challenge. In the BT- KPMG study, the bank scored very high on parametres like financial/technical resilience, third-party risk management and addressing enhanced credit default risks. Executive Director Rajeev Ahuja says the nature of credit risk has started evolving very differently and rapidly over the years. “With scale, there are higher linkages and interconnectedness with other institutions.”

According to the KPMG study, the bank has tightened its risk-assessment criterion across the board. It significantly right-sized the entire portfolio under review. The new target operating model for the wholesale business is based on a significant de-bulking of the portfolio.

“However, there is also a business-model risk for companies. Today, the demand is shifting or can shift very rapidly as there is a whole new ability to serve customers," says Ahuja. In fact, the Covid outbreak has already accelerated the move towards more agile business models.