# Operational Risk Management: Employee Training Guide
> Learn to identify, report, and mitigate operational risks in banking. Covers ORM frameworks, reporting thresholds, and the three lines of defense.

Tags: operational-risk, orm-framework, banking-compliance, risk-management, employee-training, kri, risk-mitigation
## Operational Risk Management Training
* **Definition:** Operational Risk is the risk of loss resulting from inadequate or failed internal processes, people, systems, or external events.
* **Key Impacts:** Financial loss, potential loss, regulatory impact, and reputational damage.

## The ORM Framework Pillars
* **Risk Identification:** Detecting events, near-misses, and failures.
* **Risk Measurement:** Quantifying risks using loss data and aggregation.
* **Risk Monitoring:** Ongoing oversight through Key Risk Indicators (KRIs).
* **Risk Control:** Implementing preventive and corrective controls.

## Events & Near-Misses
* **Risk Event:** Incidents causing disruption (e.g., system downtime, entry errors).
* **Near-Miss:** Incidents that could have resulted in loss but were caught in time (e.g., reporting errors corrected before submission).

## Event Classifications & Reporting
* **Categories:** Internal/External fraud, workplace safety, business practices, asset damage, system failures, and process management.
* **Financial Threshold:** Mandatory reporting for events involving RUB 20,000 (or INR equivalent) or more.
* **Zero-Tolerance:** Immediate reporting for fraud, data breaches, and regulatory non-compliance regardless of amount.

## Reporting Workflow
* **Stage 1 (T):** Immediate notification and containment.
* **Stage 2 (T+2):** Initial assessment and categorization.
* **Stage 3 (T+5):** Root Cause Analysis (RCA) and corrective action plan.
* **Stage 4:** Closure and validation by Risk Management.

## Three Lines of Defense
1. **First Line:** Business Units (Own and manage risks).
2. **Second Line:** Risk Management Dept (Validate and monitor).
3. **Third Line:** Internal Audit (Independent assurance).
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