Why core risk management is getting so much highlighted for proper financing of a bank

 The core risk management is so much highlighted that impose to modern banking system. Due to deregulation and globalization of banking business, banks are now exposed to diversified and complex risks. As a result, effective management of such risks has been core aspects of establishing good governance in banking business in order to ensure sustainable performance. In year 2003 and 2004, Bangladesh Bank issued guidelines on the six core risks on Credit, Asset- Liability, Foreign Exchange, Internal Control & Compliance, and Money

Laundering, and ICT risks. These guidelines may help banks to measure and manage their Liquidity Risk, Interest Risk and Foreign exchange risk and minimize their losses. The ICT guideline helps to measures to prevent the unauthorized access, modification, disclosure and destruction so that now the interest of customer is fully protected. The modern banking system is more benefited securing by following the core risk management guidelines imposed by Bangladesh bank and banks is getting so much highlighted for financing as well as all operation of the bank.

a) Explain different techniques of project appraisal and elaborate the points to be considered in technical report. discuss why bank considers sensitivity analysis of project during appraising a project proposal.

The risks factors those can make an industry sick. How each factor accelerates the sickness? Or, Factor behind/responsible industrial sickness

Answer One-- The two categories factors are listed behind that accelerate the industry sickness are discussed below:

 

Internal risk factors: 1. Lack of Experience 2. Poor Management 3. Wrong feasibility / Uneconomic Plant size 4. Lack of working Capital 5. Obsolete technology 6. Faulty employee appointment 7. Non-cooperation among owners and employees 8. Marketing Problem 9. Dependence on single financial source

10. Irregular wage payment  11. Poor product quality

 

External risk factors: 1. Lack of working Capital 2. Political Unrest  3. Smuggling 4. Trade liberalization 5. Poor infrastructure 6. Global price fluctuate

7. Problems in loan disbursement (already sanctioned) 8. Bank control over

machinery purchase 9. Natural calamities 10. Duty on raw materials /customs problems 11. Non-availability of raw materials 12. Lack of modern technology

13. Long project implementation period 14. Lack of demand for the product 15. High loan interest

 

Answer Two---

A. Internal risks factors

1. Lack of Finance: The weak equity, inefficient working capital, absence of costing & pricing and budgeting, and so on will accelerate the industry sick. 2. Inefficient Production Policies: This includes wrong selection of site is related to production, lack of quality control and standard, research & development, etc. 3. Marketing factors: Inefficient planning and product mix, weak market research and sales promotions are force to industry sickness. 4. Improper Staffing: It includes bad wages and salary administration, bad labor relation, conflicts among the employees and workers. 5. Ineffective Corporate Management: It includes improper corporate planning, lack of coordination, control and integrity in top management, etc.

B. External risks factors

1. Personnel Constraint: Unskilled labor, wages disparity, general labor invested in the area will accelerate behind make a sickness. 2. Marketing Issues: The sickness arrives due to liberal licensing policies, changes in global marketing, excessive tax policies by govt. and market recession. 3. Production problem: This arises due to shortage of raw material and its high prices, shortage of power, import-export restrictions. 4. Financial Issues: The sickness arises due to credit restrains policy, delay in loan disbursement, unfavorable investments, etc.