# Operational Risk Management Training Guide for Banks
> Comprehensive training on Operational Risk Management (ORM), RBI guidelines, incident reporting, KRIs, and roles in banking risk culture.

Tags: operational-risk, banking-compliance, risk-management, rbi-guidelines, kri, internal-controls
## Operational Risk Management Overview
* **Definition:** Risk of loss from inadequate internal processes, human error, system failures, or external events.
* **Goal:** Prevent financial loss, regulatory penalties, and protect customer interests.

## ORM Framework Pillars
1. **Risk Identification:** Identifying events, near-misses, and emerging risks.
2. **Risk Measurement:** Using loss data and potential impact metrics.
3. **Risk Monitoring:** Periodic trend analysis and Key Risk Indicators (KRIs).
4. **Risk Control & Mitigation:** Implementing controls to reduce risk frequency.

## Events, Near-Misses, and Classification
* **Operational Risk Event:** Any incident causing actual or potential loss.
* **Near-Miss:** An incident that could have caused loss but was blocked; must be reported to identify weaknesses.
* **Classification:** Includes Internal/External Fraud, Workplace Safety, System Failures, and Process Management.

## Reporting Thresholds and Processes
* **Financial Threshold:** RUB 20,000 (or INR equivalent) for potential/actual loss.
* **Zero-Tolerance:** Immediate reporting for Fraud, Data Breach, and Regulatory Non-compliance.
* **Reporting Timeline:**
    * **T+0:** Immediate Notification
    * **T+2 Days:** Initial Assessment
    * **T+5 Days:** Detailed Investigation (Root Cause Analysis)
    * **Final:** Closure and validation.

## Roles and Responsibilities
* **1st Line (Business):** Own and fix risks.
* **2nd Line (Risk Dept):** Monitor KRIs and validate data.
* **3rd Line (Audit):** Independent assurance.
* **Culture:** Focus on Root Cause Analysis (RCA) on processes rather than individuals.

## Data and Compliance
* Maintain records for a minimum of 10 years.
* Transparent reporting and high data quality are essential for a strong risk culture.
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