Risk Management

Strength in Preparedness

Operating in a dynamic and changing environment, we sharpen our agility and resilience to remain steadfast in challenging times. We adhere to a structured and systematic approach to identify and manage risks in our business. As our business volumes grow, and we introduce innovative products and services, it is imperative to build robust risk management practices.

OUR RISK MANAGEMENT APPROACH

We have a strong risk management framework through which we identify the risks associated with our business and also deploy mitigation measures.

We recognise that risk is an integral part of business and are committed to managing the risks in a proactive and efficient manner. Accordingly, we adhere to a Risk Management Policy which includes identification, assessment and control of elements of risk, which the Board may view as threats to the existence or performance of the Company. The Company has also constituted a Risk Management Committee in line with the new scale-based regulations to frame, implement, and monitor the risk management plan for the Company from time to time.

IDENTIFIED RISKS

Credit Risk

Borrower defaults leading to credit losses and erosion of capital.

Mitigation Approach

Continuous monitoring of the accounts by regular customer visits and identifying early warning signals for any potential repayment stress. Thus, taking a proactive approach for further actions to minimise the adverse impact on the portfolio
Following strong underwriting practices and diversification across sectors and geographies

Capitals Linked

Financial Capital

Social and Relationship Capital

Liquidity Risk

Insufficient cash flow to meet financial obligations and operational needs might impact the overall operational flow of the Company.

Mitigation Approach

Adhering to tolerance and prudential limits for structural liquidity
Complying with the Board-approved ALM policy

Capitals Linked

Financial Capital

Social and Relationship Capital

Interest Rate Risk

Interest rates fluctuations potentially affecting profitability.

Mitigation Approach

Asset liability matching (interest rate)
Risk-based pricing

Capitals Linked

Financial Capital

Social and Relationship Capital

Operational Risk

Loss due to failures in internal processes, systems, or external events can have severe impact on the Company’s operations.

Mitigation Approach

Ensures operational risk control efficacy through internal controls, training, insurance, fraud monitoring, IT systems and security, and business continuity planning. Additionally, the audit team conducts investigations, assesses control gaps, and recommends improvements

Capitals Linked

Financial Capital

Social and Relationship Capital

IT Risk

Reliance on technology-intensive platform exposes us to serious threats that can compromise the confidentiality, integrity of customer data and availability of our services.

Mitigation Approach

Conducting regular training and awareness sessions on information security and cybersecurity
Installed endpoint security on employee workstations and data centre IT setups
Periodic access reviews are in place for both end users and IT users

Capitals Linked

Financial Capital

Social and Relationship Capital

Compliance Risk

Failure to adhere to applicable laws, regulations, policies, and standards might incur financial loss, reputational damage, and legal liability towards the Company.

Mitigation Approach

Our compliance department, staffed by experienced professionals, guides businesses on regulatory compliance and monitors implementation for governance and reporting
Independent secretarial auditors verify compliance with the necessary guidelines and regulations as applicable, with their reports and recommendations reviewed by the Board

Capitals Linked

Financial Capital

Social and Relationship Capital