NIFRA is adopting best practices for risk management, including the establishment of a well-functioning Risk Management Department. The role of the department is to support sustainable performance in line with the bank’s objectives by managing critical risks effectively. While managing risk remains the responsibility of all teams (The First Line of Defense), the Risk Management Department acts as the facilitator and reviewer (The Second Line of Defense).
The department has established effective checks and tools to maintain adherence to the organization’s risk appetite as guided by the Board of Directors and Management team. Further, in order to strengthen risk management, accountability and good governance, the bank has also set up an internal audit regime, which is being outsourced to an external provider (The Third Line of Defense).
NIFRA has well-defined By-laws, policies, guidelines, operating procedures and business continuity & disaster recovery plan relating to managing risks. The three lines of defense identify, measure, monitor and control risks are expected to achieve following objectives all the time: