PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2005 and 2004 Expressed in millions of Rupiah, unless otherwise stated
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56. RISK MANAGEMENT continued
The Risk Management Committee in Bank Mandiri is called Risk and Capital Committee RCC which was established on October 10, 2001. RCC is responsible for establishing Bank-wide risk management
policies, such as reviewing internal limits, establishing funding and loan related interest rate policies, loan policies, new product launching and monitoring the implementation of established policies and procedures
for risk identification, measurement and mitigation. The Risk and Capital Committee is also responsible for establishing the capital charge to cover existing
risks, especially credit risk, market risk and operational risk. The scope of responsibility and function of the committee has experienced several changes. The latest changes which started to be implemented in the
second half year of 2005 is the development of RCC into 4 four committees, which are: Asset Liability Committee, Credit Policy Committee, Credit Approval Committee and Capital Investment Approval
Committee. The scope of control and responsibility over risks has become more focused and effective with this development. Each committee is supported by working group whose members are consist of groups
directly related to the risk problems included in the committees scope. The Bank has established an organizational structure which is able to support risk management in a more
comprehensive, centralized, measurable and controllable way, by establishing the Risk Management Task Force which is also referred to as the Risk Management Directorate. The Risk Management Directorate is
responsible in managingcoordinating all risks encountered by the Bank, such as credit risk, market risk, operational risk, liquidity risk, legal risk, reputation risk, strategic risk and compliance risk, and defining risk
management guidance and policies. The Risk Management Directorate is managed by a DirectorCoordinator whom is responsible to the
Board of Director and also a voting member of the Risk and Capital Committee. The Risk Management Directorate is divided into 2 two main functions: 1 Credit approval as a part of the four-eye principle, and
2 Independent Risk Management which is divided into several groups in relation with credit and portfolio risk, operational risk and market risk.
Besides the Risk Management Directorate, the Bank also established the Risk and Capital Committee on October 10, 2001. The Risk and Capital Committee is a committee that is made up of members of the
Board of Directors and Group Heads from various units. The Risk and Capital Committee is led by the President Director and supported by permanent and contributing members who are responsible for
establishing Bank-wide risk management policies, such as reviewing internal limits, establishing new product launching interest rate policies and monitoring the implementation of established policies and
procedures for risk identification, measurement and mitigation. The scope of responsibility and function of the committee has experienced several changes. The latest
changes which was implemented on June 16, 2005 is the development of RCC into 4 four committees, which are: Asset Liability Committee, Credit Policy Committee, Credit Approval Committee and Capital
Investment Approval Committee. The scope of control and responsibility over risks has become more focused and effective with this development. Each committee is supported by working group whose
members are consist of groups directly related to the risk problems included in the committees’ scope.
In response to the Bank Indonesia Regulation No. 725PBI2005 regarding Certification of Risk Management for the Management of the Bank, the Bank have enrolled their employees from Risk Management and
related Business Units into the Risk Management Training and Risk Management Certification which is conducted by Badan Sertifikasi Manajemen Risiko BSMR in cooperation with Global Association of Risk
Professionals GARP. Through intensive internal certification training, the Bank will be prepared with human resources with risk management certification in accordance with BI regulation and Basel II.
