Austrian-Tajik Cooperation fund: Component A (Risk Management, Reporting, Methodology)

2014-11-30 - 2015-10-31

AccessBank Tajikistan achieved significant business growth in 2013 and embarked on a steady path of profitability. To strengthen the bank’s institution building process and its medium and long-term expansion the project provided support in three areas: Build up and improve ABTJ’s reporting, methodology and risk management functions with the aim to improve the internal processes of the bank and lay the foundations for further operational and regional growth. Create procedures and responsibilities to identify, communicate and mitigate risks in an effective way. Prepare for and obtain an internationally recognized external rating (combined financial and social rating). Develop and implement a retail strategy, including training of client services advisors and conducting marketing campaigns, with an aim to significantly increase the deposit base and commission income of ABTJ. In 2013 the bank did not have dedicated departments for reporting, methodology and risk management. These tasks were fulfilled by other units like the accounting department, business departments, the credit control department, credit back office and management. In addition, the area of compliance, a complex function that requires inter-departmental coordination, was also fulfilled by management. Going forward, the compliance function should increase in relevance, since the management of more external lending relationships ultimately results in a set of various compliance covenants. The set-up of these missing functions significantly allows management to focus on more strategic issues, facilitate product and procedure development that keeps pace with the bank’s business expansion, enable the bank to implement more in-depth analyses and scenario calculations, facilitate improving operational risk management and, ultimately, improve the information basis for managerial decisions.
Produce a risk assessment report, including outlining a basic risk management framework (1 month); Design a new Reporting, Methodology and Risk Management Function, including its organizational structure and integration (2 weeks); Develop procedures, reporting format, work flow and job descriptions for this department, this may or may not include a risk management committee, and integration into the bank’s organizational chart (2 months); Draft a set of policies addressing liquidity, currency and interest rate risk (2 weeks); Advertise for, select and train staff for this department (2 months); Procure and conduct external trainings for respective staff (2 weeks), both within the AccessBank Network and externally.