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

dividend payment depends on such “risk rating” of an individual bank. The BB mentioned: A risk rating procedure has been developed to quantify all possible risks based on available information […] this risk rating is done on a half- yearly basis and carries 15 percent weight in the management component of CAMELS rating (Annual Report 2014-2015, p. 43). The BB also disclosed in the following year: […] Besides, this rating plays an important role in getting branch licence, AD licence, permission for dividend declaration, etc. for banks. (Annual Report 2015-2016, p. 44). Further, the DOS is made responsible for reviewing the “self-assessment reports” of banks in order to provide proper instruction to keep the operational risk at a minimum level. The DOS verifies this report with the help of the on-site inspection department. Likewise, BB strengthened the capacity of its on-site inspection department. The number of on-site inspection department has been increased to conduct a field-level inspection and exercise regulatory power to receive the desired outcome from the regulated banks. The individual bank has CAMELS rating between “3” and “5” are inspected every year. Banks rated “1”, or “2” are inspected once in every two years, although the foreign banks are inspected in every year irrespective of the rating. In addition, the on-site department reviews the accuracy of the ICAAP Report of the banks. The BB disclosed: As part of statutory function, currently six departments of BB are conducting on-site inspection activities […] These departments conduct mainly two types of inspection, which may be summarized into three major categories like comprehensive/ regular/ traditional inspection (ii) Core risks evaluation and (iii) special/surprise inspection. (Annual Report 2018-2019, p. 45). Similarly, the BB formed an SREP Team under the Basel framework headed by an Executive Director and revised the process document for ICAAP Report in 2014. The SREP of BB includes a dialogue between the BB and the bank’s SRP Team to evaluate the bank’s ICAAP Report. Further analysis revealed that the BB determines if any additional capital requires for banks In addition, the BB established a new department titled “Financial Stability Department (FSD)” in 2012 as a part of its supervisory initiatives. This department is working relentlessly to build up a stable macro-prudential framework. It publishes annual financial stability report, quarterly financial stability assessment report, and develops various tools techniques like Financial Projection Model, Interbank Transaction Matrix, Composite Financial Stability Index (CFSI), and Bank Health Index and many more. It has also developed a framework for identifying and dealing with the Domestic Systemically Important Banks (DSIB) and a new oversight framework titled “Central Database for Large Credit (CDLC)” to enhancefinancial discipline through monitoring the large exposures of banks. Further, it has developed Bangladesh Systemic Risk Dashboard (BSRD) as an early warning system. In addition, a framework for “Coordinated Supervision for Bangladesh Financial System (CSBFS)” is under progress in this department. Moreover, the BB established an “Integrated Supervision and Management Department (ISMD)” in 2015 to monitor the banks through Integrated Supervision System (ISS) software. The ISS is an outcome of BB’s comprehensive and risk-based supervisory initiatives. It is a web-based monitoring tool integrating the information of a bank’s overall activities i.e. balance sheet exposure, o ff -balance sheet exposure, credit operation, foreign exchange business, money market operation and regulatory compliance related to their head o ffi ce to root level branch operations. The head office of all scheduled banks and their branches currently are under the coverage of ISS. This department also complements the on-site inspection department. The BB disclosed: BB has started a comprehensive supervision research in late 2012 to develop a more effective supervision and monitoring tool in order to strengthen its existing supervision system. Integrated Supervision System (ISS) is the outcome of that initiative. ISS Software was formally inaugurated by the honourable Governor on 8th October 2013. Subsequently, mandatory ISS reporting of banks’ head offices and branches started from March 2014. (Annual Report 2016-2017, p. 34). Enterprise Risk Management in Designing Meta-Regulation under Risk-based Regulatory Strategy: An Empirical Evidence from Financial Regulation 45 Global Journal of Management and Business Research Volume XXIII Issue II Version I Year 2023 ( ) A © 2023 Global Journals submitted to the DOS. This risk rating carries 15 per cent weight in the management component of the “CAMELS Rating”. Besides, certain regulatory approval, such as a new branch licence, an AD licence or prudence in determining the level of adequate capital. However, information of the ICAAP document is rechecked with the departments of on-site inspection and off-site supervision. Besides, the BB introduced for the first time a “comprehensive risk rating” in 2015 for each bank on a half-yearly basis based on the risk reports (i.e. RAS, CRMR, MRMR) and other documents (i.e. stress testing report, meeting minutes, other compliance reports) during the SRP-SREP dialogue on the basis of quantitative and qualitative judgment. If any bank fails to produce their own ICAAP report backed by proper evidence and rigorous review regarding risk management, the SREP Team of BB applies their Further analysis revealed that Enterprise Data Warehouse (EDW) and Foreign Exchange Monitoring