Covid crisis a high dimension stress test
Panel discusses challenges, impacts and lessons from risk management perspective
image for illustrative purpose
Mumbai: A senior official of the country's largest lender, State Bank of India (SBI) has termed Covid-19 crisis as a high dimension stress test for the banking sector. Srinivasa Rao Sureddi, Dy Managing Director & Chief Risk Officer at State Bank of India (SBI), stressed how the pandemic has impacted every aspect of life and business.
Lessons learnt include adopting an agile and standardized risk management framework, building a local supply chain and liquidity for financial and non-financial institutions. There is no playbook to manage Covid-19 crisis, he said.
"It is a high dimension stress test. Businesses, both financial and non-financial must adopt effective, standardized risk management framework to effectively control risks from such low-probability high-impact event," Rao said while addressing an event on the occasion of launch of Delhi chapter of PRMIA (Professional Risk Managers' International Association) virtually.
It was followed by a panel discussion which explored the challenges, dimensions, impacts, and lessons from a Risk Management perspective. The ways and means to adopt cost-effective, future-proofing digital infrastructure, deeper digital integration, mitigants to work from home, liquidity-driven demand creation, analytical stress tests, a sharper focus on people and reputational risk, and continuous compliance monitoring to mitigate data and privacy risk to stay ahead of such crisis in future.
"Reputation risk arising from small internal control failure can cause more loss than the total of all risks taken together. Indian banking and economy have sailed through the Covid rather smoothly due to faster digital adoption and proactive policies and strategies adopted by government, regulators, leading players and public", Sunil Mehta, chief executive, Indian Banks' Association, said.
On this occasion, Ken Radigan, CEO of PRMIA Global, announced a partnership with Bangalore based SRICHID Academy to boost risk training and job placement assistance to India's PRMIA community. Nirakar Pradhan, CEO of PRMIA India, said that even though a late starter in the country, PRMIA has opened four chapters and conducted 16 market events.
