As part of the Shanghai Cooperation Organization Interbank Association (hereinafter the "SCO IA", the "Association") on August 23 of this year in Astana, a seminar on Risk Management System was organized by Development Bank of Kazakhstan JSC (a subsidiary of Baiterek National Managing Holding, hereinafter referred to as the Bank, DBK). The seminar participants got acquainted with the Early Warning System (EWS), implemented by DBK in 2016. EWS allows DBK to promptly identify and respond to emerging risks associated with the implementation of investment projects and transactions financed by the Bank, as well as interbank lending.
In opening the seminar, the Chairman of the Board of DBK Bolat Zhamishev noted that "quality risk management, responsive to current changes in the economy and the credit market, is of paramount importance for the Development Bank as a financing organization." "Over the past three years, the Bank has built a "proactive" risk management system that allows timely response to all challenges in the external environment, including macroeconomic shocks. A good example is the loan portfolio stress testing, which has been practiced since the beginning of 2015, which allowed us to identify projects that are highly sensitive to foreign exchange risks. Timely work on these projects helped the Bank to maintain the loan portfolio quality, " stressed B. Zhamishev.
The EWS system of DBK includes four stages of early warning: identification, evaluation, control and monitoring. The EWS allows at an early stage to ensure timely response to the deterioration of the risk profile for a particular counterparty of the Bank. The EWS in accordance with international standards, provides for the appropriation of the respective statuses to DBK's counterparties on the basis of risk indicators. Values of risk indicators can be in the "green" zone, but also in the "yellow" zone - if there is a significant deterioration in the loans quality. If risk indicators refer to the "red zone", further continuous activity of the Borrower is questioned, and there are violations of the financial covenants.
The following representatives of the SCO IA member-banks participated in the seminar, which will end on August 24: China development Bank, RSK Bank (Cash and Savings Company of Kyrgyzstan), Vnesheconombank (Russia), Amonatbank (Tajikistan), Habib Bank Limited (Pakistan), the SCO IA member-banks: Eurasian Development Bank, JSC "Joint Stock Savings Bank "Belarusbank" and Development Bank of Mongolia, as well as representatives of SME Investments of the UCO CJSC of the Republic of Armenia.
The agreement on interbank cooperation between the authorized banks of the SCO member states was signed on October 26, 2005. To date, the member-banks of the SCO IBA are: Development Bank of Kazakhstan JSC, State Corporation "Bank for Development and Foreign Economic Affairs Vnesheconombank" , China Public Development Bank, Cash and Savings Company OJSC (Kyrgyz Republic), State Savings Bank of the Republic Of Tajikistan "Amonatbonk" and National Bank for Foreign Economic Activity of the republic of Uzbekistan On June 9, 2017, Habib Bank Limited (Pakistan) and Indian Infrastructure Finance Company (India) obtained full membership of the organization.