BIA Final pptV2.0

Reliance Commercial Finance & Reliance Home Finance - BIA Finalisation : 

Reliance Commercial Finance & Reliance Home Finance - BIA Finalisation Date: 29/08/2011

What is Business Impact Analysis (BIA): 

What is Business Impact Analysis (BIA) Business Impact Analysis (BIA) is a framework for identifying the company’s Mission Critical Activities (MCA) and their recovery priorities by quantifying the business impact caused by non-availability of these MCAs. The framework shall aim at conducting a detailed process study to identify inter/intra dependencies, nature of business impact and its variance over time and recovery requirements. 2

Methodology: 

Methodology 3 Function overview and identifying business processes / activities Process understanding Identifying dependencies Identifying nature of business impact Determining variance of business impact Establishing recovery requirements (RTO, MTPoD,MLoO) Classifying processes into Critical, Vital and Necessary based on recovery requirements

Business Impact Analysis Snapshot: 

Business Impact Analysis Snapshot 4 Function Owner identifies business processes Process owner (SPOC) provides an understanding of the process Identify the impact parameters (Business, Financial, Operational, Customer and Legal) Understand all centralised and other decentralised processes at HO and take ratings 1 2 3 4 Training and impact ratings at Central Operations - Aurofidel 5 Untertake training, Risk Assessment and impact ratings at branches Finalise and rationalise all impact ratings and make a consolidated BIA at HO Finalized the impact assessment grid after consulting with KV Process Description List of activities Dependencies 6 7 8

Impact Assessment Parameters : 

Impact Assessment Parameters 5 Business Loss Process(s) failure leading to Loss of customers (Potential, Existing) thereby affecting the expected revenue. Financial Loss Process(s) failure leading to fines, interest payable, increased cost of funds etc Reputational Loss Incident / process failure (media management, customer management) leading to negative publicity in media affecting the brand. Operational Loss Incident / process failure leading to loss of work. Backlog would increase with the downtime and recreating lost work would require additional operational time / efforts. Legal / Compliance implications Process(s) failure leading to inability to comply to legal / compliance requirements thereby attracting penalties / notices. The type of impact caused to RCHF due to non-availability of the business process.

PowerPoint Presentation: 

6 Calculating Business Impact Steps Calculation Reason Annual Disbursement for a product for all the branches (in Crores ) 100 Cr Calculated from Annual Disbursement of amount and cases for FY 2010-2011 70% of annual Disbursement. 70 Cr 70% of annual disbursement gets disbursed in the last 10 days. Disbursement/Day 58.33 L =Annual Disbursement / 12 / 10 Impact Grid L M H L= Disbursement per day / 3 M= 2 * L H = 3 * L In crores 19.44 L 38.88 L 58.33 L Mumbai, Delhi, Bangaluru, Chennai, Ahmedabad, Pune and Hyderabad contribution. 70 Cr Contribution from the top branches. Applying 80-20 rule. Mean of the annual disbursement 10 Cr Mean among the critical branch 70% of annual Disbursement. 7 Cr 70% of annual disbursement gets disbursed in the last 10 days. Disbursement/Day for 7 of the critical branches during peak period 5.83 L =Mean annual disbursement / 12 / 10 Considering only peak period Mapping it into the impact grid Minimum 100% No of days to recover at minimum level would be when it turns from low to medium No of days to recover to 100% would be when it turns from medium to high 7 10 Note : This is only an example.

PowerPoint Presentation: 

7 Calculating Operational Impact Steps Calculation Reason Annual Cases handled for a product in all branches 5000 Calculated from Annual Disbursement of amount and cases for FY 2010-2011 70% of annual cases handled 3500 70% of annual disbursement gets disbursed in the last 10 days. Cases handled/Day 29.166667 =Annual Cases handled / 12 / 10 Number of total login cases handled/day 72.916667 Assuming only 40% of login cases are sampled. Impact Grid L M H L= Cases handled per day / 3 M= 2 * L H = 3 * L No. of Cases 24.3 48.6 72.9 Mumbai, Delhi, Bangaluru, Chennai, Ahmedabad, Pune and Hyderabad contribution. 3000 Contribution from the top branches. Applying 80-20 rule. Mean of the annual disbursement 428.57 Mean among the critical branch 70% of annual Disbursement. 300 70% of annual cases gets disbursed in the last 10 days. Disbursement/Day for 7 of the critical branches during peak period 2.5 =Mean annual disbursement / 12 / 10 Considering only peak period Number of total login cases handled/day in critical branches 6.25 Assuming only 40% of login cases are sampled. Mapping it into the impact grid Minimum 100% No of days to recover at minimum level would be when it turns from low to medium No of days to recover to 100% would be when it turns from medium to high 8 12 Note : This is only an example.

PowerPoint Presentation: 

8 Calculated BI and OI BUSINESS IMPACT OPERATIONAL IMPACT Product Minimum level MTPoD (BI) 100% MTPoD (BI) Minimum level MTPoD (OI) 100% MTPoD (OI) Average ticket size Average cases disbursed per day Loss / day SME 3 Days 5 Days 3 Days 6 Days 150L 2 300L Mortgage 3 Days 6 Days 3 Days 6 Days 73L 3 219L CVCE 3 Days 6 Days 3 Days 6 Days 12L 11 132L Auto 3 Days 6 Days 3 Days 6 Days 4.5L 13 58.5L LAG 3 Days 7 Days 3 Days 6 Days 3.5L 1 3.5L

PowerPoint Presentation: 

9 Calculating BIA For each of the cases logged in to disbursement, the steps followed are Credit-RCU-Operations. The minimum recovery period is obtained for the branch would be the minimum recovery period calculated for all the products and The 100% recovery period would be the average of the most significant products The product priority can be decided upon the ticket size or loss/day of each of the product and hence the resumption would start at any branch as per product priority. To minimize the impact and to start working at 100% the job productivity of any branch should be increased.

PowerPoint Presentation: 

10 Critical Processes These include all process which have minimum level RTO in the range of 0–24 Hours Central Credit (LC Cases) Finance – Statutory Compliance Collections - Collection (HO) Collections – Repossession and Liquidation (HO) Collections - Collections (Branch) BOPS - QRC COPS - Repayment & Banking BOPS - Non-EMI Banking Treasury - Dealing with Banks Treasury - Dealing with Mutual Funds IT – Disaster Recovery COPS - Call Center – Inbound M&B - Brand & Product Communication Legal - Drafting & Contracting (Branch) Legal - Drafting & Contracting IT - IT Service Call Management Admin - Travel Management Credit Logistics and Systems - System Support

PowerPoint Presentation: 

11 Vital Processes These include all process which have minimum level RTO in the range of 24-72 Hours Customer Acquisition Credit - Data Entry & Underwriting RCU (Sampling & Audit) PDD Entry & Loan Disbursement Product Designing and Pricing Finance – Payout Finance - Vendor Creation COPS - Inventory Funding COPS - PDD Management COPS - Call Center -Outbound HR - Employee Seperation IT - Asset Management Admin - Facility Management Credit Logistics and Systems - MIS and Analytics Credit Logistics and Systems - Vendor Management

PowerPoint Presentation: 

12 Necessary Processes These include all process which have minimum level RTO greater than 72 Hours Product – MIS Products - DSA Payouts Products - DST Payouts Finance - MIS Finance - Account Closure Collections - Repo & Liquidation (Branch) Collections - Vendor Management Collections - Legal Collections - Receipt Book Management COPS - Call Center - Email Management Credit - Vendor Management (BO) RCU - Vendor RCU RCU - Post Disbursement RCU RCU - RHRS and Employee Verification Policy - Policy Framing M&B - Sales Support M&B - Vendor Management Legal - Litigations (Branch) Legal - Regulatory Returns Quality - LSS Quality - BPMS Quality - Idea Express HR - Payroll Admininstration (Branch) HR - Hiring (Branch) HR - Learning & development HR - Payroll Admininstration HR - Performance Managemnet HR - Hiring IT - Application rollout IT - Change Management IT - Vendor Management Admin - Vendor Management Treasury – Credit Rating

PowerPoint Presentation: 

13 Schedule for September Filming and Post - production of AV movie. Prepare BCM Plan for Phase I branches. Conduct training, risk assessment and BIA at Phase II branches.

PowerPoint Presentation: 

14 Schedule for September Week  starting  5 th to 9 th September : Kolkata, Jaipur Week  starting 12 th to 17 th September : Chandigarh,Ludhiana Week starting 19 th to 23 rd September : Ahmedabad, Surat Week  starting 19 th to 23 rd September : Coimbatore, Salem

Thank you: 

Thank you Date: 29-08-2011