The Reserve Bank of Malawi (RBM) issued Risk Management Guidelines in 2007 for the purpose of providing guidance to all banking institutions on risk management systems. These Guidelines were issued in the wake of its efforts to adopt and implement Risk Based Approach to Supervision.
The RBM therefore issued a circular calling for risk management programs (RMPs) from banking institutions for assessment of their adequacy and effectiveness in the management of risks. The RMPs were accompanied by individual bank ‘walk-through’ presentations to ensure clarification of the submissions.
The review of the RMPs gave rise to the general observation that though most RMPs were adequate in some aspects, they demonstrated general weaknesses in some respects. It is in this regard that the RBM deemed it necessary to issue a guide that aims to provide guidance to banking institutions on key elements of a typical RMP.