英语论文网

The model that can be used for operational risk management is a Heat Map. This Map is easy to use and help managers to brief their executives on those events which are never discussed in their meetings. These events have devastating effects on business operations. These events vary business to business. Every business has its own priority to each event.

Banks have different events to cater with, than a production oriented business. These events are also called Black-Swan Events and are mapped on the Heat map according to their exposure level. For financial Institutions these events are,

Manipulation of loan loss reserves

Mortgage frauds

Securitization frauds

Sanctions violations

Central bank violation

Inside loan fraud

Theft of fund cashiers

Theft of fund transfer etc.

Management can analyze them one by one and should also prioritize according to its importance. They could be plotted on the map according to their significance and likelihood. The map could be drawn in the way presented in the next page,

7.2.B) Key Risk Indicators

Another approach an organization can use to swiftly operate in the daily business operations is key risk indicators. Examples could be customer complaints, lack of technology, inappropriate Professionals, application and loan procedure etc in a bank. Management must be vigilant to carve-out the possible key indicators in their daily operations as well.

7.3) Criteria in Advancing Loans and Mortgages

In forwarding loans a number of important criteria must be followed,

The force sale value of an asset as a collateral must be properly and accurately calculated. Its value is calculated almost 25% less than the market value of an asset.

The second big issue is that the bank personnel never visited the collateralized asset on-site. They never bothered to visit the site to check whether the asset exist in the same locality as shown in the documents. But false documentation was accepted and was considered.

The third issue is related to feudalism. The assets where they were located were near to land of landlords. They at the time of auction gave a lower price, because to reach the land you had to pass through his land. According to land reforms of Pakistan first right to give an offer before the auction is of the neighboring land holders. So it is the same case here that the person indebted, his land neighbor the land of the landlords, get the lowest price for his land. Most of the time offered price is less than the actionable price that also contribute in increasing problems of bank's recovery. This result in less cash recovery and hence less liquidity at Bank.

Quality of Land: because they did not visit land onsite which created the problem for them that they did not have the Idea of the land's quality. As we know that cultivable lands must not have the problem of erosion if water flows around the land, Salinity, Rocks, or any本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。