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IFC Helps Indian Banks Manage Risk in Tough Times
In New Delhi:
Minakshi Seth
Phone: +91 11 4111 1000
E-mail: mseth@ifc.org
Mumbai, India, March 13, 2009─IFC,
a member of the World Bank Group, is working and sharing knowledge through
workshops with bank executives in India and other South Asian countries
to help them better manage risks amid the unfolding global financial crisis.
IFC hosted the first workshop today
in Mumbai, India, that brought together representatives from international,
regional, and national banks and financial institutions to discuss coping
strategies and best practices for managing risks during tough times. Senior
executives from the Small Industries and Development Bank of India, Kotak,
Federal Bank, FINO, HDFC Bank, IDFC, ICICI Bank, Yes Bank also participated
in the workshop entitled “Managing Risks in Good Times and Bad.”
Participants shared experiences on risk management and discussed implications
of financial-sector policy changes in developed and emerging markets, particularly
in response to the turbulent and rapidly changing financial environment.
Those lessons learned can guide practitioners and bankers on taking better
control of their operations and potential risks.
“Poor risk management practices have
resulted in the current financial crisis, causing a severe credit crunch,
and banks need to win back investors’ trust,” said Michael Higgins, IFC
Banking Specialist. “Through this discussion, we are better placed to
understand implications of the international crisis on the financial and
banking system and identify possible solutions.”
The workshop helped the banking industry
discuss liquidity, operational risk management, corporate governance and
risk mitigating approaches. Global banks dealing with severe events especially
need to correctly assess risk and address them by insurance or other means.
Justin Yifu Lin, World Bank Chief Economist
and Senior Vice President, said, “In addition to fiscal interventions,
investments in high-return opportunities in developing economies in such
sectors as infrastructure and measures to create demand quickly and efficiently
are what’s needed most.”
“We believe that risk management begins
with creating a culture to address the issue and realizing the important
monitoring role that board members must play,” said Jun Zhang, IFC Manager
for South Asia. “This workshop provides an opportunity to exchange ideas
and strategies, helping ensure that banks in the region are better prepared
in the future.”
IFC is planning similar workshops across
South Asia and working closely with banks in the region to help structure
robust risk management systems. The effort is part of IFC’s wider strategy
to support private sector growth to help create jobs and opportunity. To
learn more about IFC’s activities in India, visit www.ifc.org/southasia.
About IFC
IFC, a member of the World Bank Group creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $16.2
billion in fiscal 2008, a 34 percent increase over the previous year. For
more information, please visit www.ifc.org.
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