Global Journal of Management and Business Research, A: Administration and Management, Volume 23 Issue 2

overall risk profile and a strategy for maintaining adequate capital (Bangladesh Bank 2014, p. 51) In addition, banks have asked to prepare and submit a “Self-assessment Report on Internal Control and Compliance” so that the operational risk can be kept at a minimum. The format of the report was introduced in 2012 with 53 questionnaires in the areas of anti-fraud internal controls, fraud and forgery. However, the format was revised subsequently in 2017. This report shall be submitted to the BB on a half-yearly basis after the signature of the MD/CEO of the bank and a counter- signature by the chairman of the board’s audit committee. Currently, this report is comprising of a questionnaire divided into five sections namely, Internal Control and Compliance (ICC), General Banking and Operation, Loans and Advances, Foreign Exchange Operation, and Information and Communications Technology (ICT) along with two statements containing detailed information regarding fraud-forgeries. Finally, the RMD of the bank is encouraged to prepare a “comparative analysis report” of risk management functions and advised to send the report to the senior management and to the board of the bank and thereafter to the BB on a yearly basis. It is instructed as: RMD of the bank is encouraged to prepare a comparative analysis report on bank’s gain/loss due to/lack of proper risk management activities and its impact on capital and send the same to senior management & board of the bank and DOS of BB on yearly basis. (Bangladesh Bank 2018, p. 20) Moreover, the RMD is empowered to perform the risk management functions independently, keeping it separate from the business operation. In view of that, the appointment, remuneration, promotion, dismissal of the CRO is vested on the board or BRMC. Being an independent department, the CRO is also advised not to take any dual responsibility as Chief Operating Officer (COO), Chief Financial Officer (CFO), Chief of Internal Audit (CIA) and others. Likewise, the RMD is made responsible for recommending and monitoring the bank’s risk appetite and policies, and for following up and reporting on risk-related issues across all types of risks. In addition, the RMD is made responsible for risk reporting, both internal and external authorities on a regular basis. These functional reforms over the years assist the banks to integrate bank-wide risks from the bottom to the top for effective self-regulation. set up an electronic dashboard, established Financial Stability Department (FSD) and Financial Integrity and Customer Services Department (FICSD), launched Integrated Supervision System (ISS) Software and established Integrated Supervision Management Department (ISMD) among the major. At the outset, the BB strengthened the capacity of its two supervision departments namely, the Department of Off-site Supervision (DOS), responsible for conducting off-site supervision of banks and rating of the bank’s financial condition based on the various risk management reports and documents submitted to it and the Department of Banking Inspection (DBI), responsible for conducting the physical inspection of banks throughout the year. As part of the capacity building of DOS, BB formed six banking supervision specialist sections chaired by “Bank Supervision Specialists (BSS)” in 2013, who works as an early signal provider for the banks. They mainly prepare “Diagnostic Review Report (DRR)” and “Quick Review Report (QRR)” for banks and provide possible solutions to problems. In addition to BSSs, a new cell named “Observer Cell” is established under DOS in 2017 to appoint observers in banks if needed. The BB disclosed: In order to strengthen banking supervision, BB has recently formed six Banking Supervision Specialist Sections in the Department of Off-site Supervision (DOS). Each section is headed by a Banking Supervision Specialist (BSS), at the Deputy General Manager level […] Supervision Specialists monitor treasury functions, capital adequacy, ADR, etc. of the portfolio banks and prepare diagnostic review report (DRR) on audited financial statements. They also examine the internal control systems to improve its resilience (Annual Report 2015-2016, p. 43) The CAMELS rating is one of the major supervisory tools used by DOS to assess and review the financial soundness of banks. It helps to identify the problem banks. The BB takes necessary inspection measures for the individual bank based on the outcome of “CAMELS rating”. However, the BB revised the “CAMELS rating” guidelines from time to time latest in 2013. The BB disclosed: The previous CAMELS rating guideline has been reviewed by the Department of Off -site Supervision Enterprise Risk Management in Designing Meta-Regulation under Risk-based Regulatory Strategy: An Empirical Evidence from Financial Regulation 44 Global Journal of Management and Business Research Volume XXIII Issue II Version I Year 2023 ( ) A © 2023 Global Journals BB has strengthened the capacity of its inspection departments, formed an SREP Team for ICAAP review, […] the SRP team must meet at least bi-monthly to monitor the implementation of SRP. Banks must have a document (called Internal Capital Adequacy Assessment Process-ICAAP) for assessing their III. I nstitutional C apacity B uilding In parallel to the sectoral risk management reform, the BB has gradually taken various initiatives for institutional capacity building since its strategic shift in order to full-fledged functioning the risk-based regulation. Part of this capacity building initiatives, the […] the revised CAMELS rating guideline came into effect from 2013. (Annual Report 2016-2017, p. 39)