Need to adopt risk management techniques stressed

"The country's corporate and financial sector has realised the need to implement the best practices of risk management within their organisational structures, but still much more is needed to be done," said Hasan A Bilgrami, President and Chief Executive of BankIslami Pakistan.
While addressing a seminar on 'Risk Management', organised by the Institute of Cost and Management Accountants of Pakistan (ICMAP) at the Institute here on Saturday evening.
He said that now the financial and corporate sectors of the country have become much aware of the importance of implementing best practices regarding risk management and different institutes and universities have launched different courses on it, which is commendable.
"We should know where this world is going," he said, adding that some flaws in the implementation of risk management must be removed by adopting international and modern techniques.
Bilgrami said that by implementing risk management techniques, an organisation could really minimise its risks whether it be liquidity risk, credit risk, market risk, operational risks or asset liquidity risks, etc.
He lauded the efforts of the banking sector, specially, as stiff competition is being witnessed among all the banks for the past three years.
"Every bank is trying to become the best, in the current situation, by adopting world class and modern techniques, including risk management, which is good for the customers as well, as they have now several options which were comparatively quite few in the past years," he said.
Citing examples of the importance of risk management, SVP and Head of Risk Management of Picic, Asad Ullah Saleem said, "A branch of 200-years old UK-based bank, situated in Singapore, got bankrupt and was sold in just one pound sterling, just because the management had ignored to manage the risks and the bank then incurred billions of dollars losses."
He said that a Japanese security firm entered a command into its computer that "sell 1 share in 650,000 yen". The computer misinterpreted the command and sold 650,000 shares, against just one yen, and the company had to immediately shut down its operations.
"If that Japanese company had adopted the modern techniques of risk management, it would not have to face the worst ever situation," the Picic SVP added.
Saleem said that the implementation of risk management practices started in the public sector of the country when the donor agencies, such as IMF and ADB, stressed to implement this world class technique.
On the occasion, Jawwad Ahmed Farid, Chief Executive, Alchemy Technologies, Muhammad Sajid, Chief Executive, JS Finance Limited, and Asad Ali Shah, Partner, Yousuf Adil and Co, Chartered Accountants, also spoke.