IFB Bank's Risk Management Guidelines

1. Credit Risk Management Guidelines:

• Loan-to-Value (LTV) Ratios: IFB Bank enforces a maximum LTV ratio of 80% for residential mortgages, ensuring a cushion against potential market value declines.
• Debt Service Coverage Ratio (DSCR): Commercial borrowers must maintain a DSCR greater than 1.2x, signifying adequate income to cover loan repayments.

2. Liquidity Risk Management Guidelines:

• Liquidity Coverage Ratio (LCR): Adhering to regulatory standards, IFB maintains an LCR of 100%, ensuring sufficient liquidity to meet short-term obligations.
• Net Stable Funding Ratio (NSFR):** Our NSFR is maintained at a minimum of 100%, aligning available and required stable funding over a one-year stress period.

3. Market Risk Management Guidelines:

• Value at Risk (VaR): IFB Bank's 1-day VaR limit, at a 95% confidence level, does not exceed $10 million, mitigating potential market volatility impacts.
• Stress Testing Thresholds: Stress tests simulate adverse market movements (e.g., a 30-40% equity price drop) to ensure resilience.

4. Operational Risk Management Guidelines:

• Loss Tolerance Levels: Operational loss tolerance is capped at $5 million annually, beyond which strategic corrective measures are undertaken.

5. Reputational Risk Management Guidelines:

• Customer Satisfaction Indices: A minimum customer satisfaction score is maintained to safeguard and enhance IFB's reputation.
• Social Media Monitoring: Negative social media mentions are quantified, with interventions initiated beyond a certain threshold.

6. Systemic Risk Management Guidelines:

• Capital Adequacy Ratios: IFB adheres to Basel III requirements, with CET1 capital ratio at 4.5%, Tier 1 capital ratio at 6%, and a total capital ratio at 8%.
• Leverage Ratio: A leverage ratio of at least 3% is maintained as a safeguard against excessive leverage.

7. Legal and Compliance Risk Management Guidelines:

• Compliance Violation Thresholds:** IFB Bank sets benchmarks for compliance violations, initiating reviews and remediation for exceedances.

These guidelines epitomize IFB Bank's commitment to maintaining financial stability, ensuring operational integrity, and fostering trust among our stakeholders. Through vigilant adherence to these principles, we strive to preemptively mitigate risks and uphold our esteemed position in the financial community. These parameters are subject to ongoing evaluation and adjustment to align with evolving market conditions, regulatory landscapes, and our strategic objectives.