Question

Aggregation of risks is somewhat quite new to banks in India. While some banks have started thinking in that line by trying to put integrated limits framework and integrated risk policies as well as using CBS solutions for technological integration, the effort required is beyond such requirement. Risk aggregation would mean aggregating the individual risk measures to decide most appropriate assets class that would contain the risk to the desired level dictated by the risk appetite. Capital allocation (about how much) would be based on such strategies . . . .

• A. Most banks are yet to conceptualize the same in their processes
• B. Most banks have already integrated it in their functioning; it is working over the years satisfactorily
• C. Which would in long run prove to be the growth impeding
• D. Of risk aggregation which is really a new concept to Indian banks
• E. On expected lines of the regulation conditions laid down in the manual of the bank

Answer 1

The correct option is C Which would in long run prove to be the growth impeding

Capital allocation (about how much) would be based on such strategies of risk aggregation which is really a new concept to Indian banks.