Lessons From Bangladesh: Why India Needs A Chief Risk Officer

Every crisis—economic, financial, or geopolitical—boils down to one question: was it anticipated? The corporate world understands this well. No major organisation operates without a Chief Risk Officer to map, monitor, and mitigate risks before they escalate. Governments must embrace the same discipline. India, with its own complex risk landscape, cannot afford to be reactive.

The argument against a National CRO is that governments already have intelligence agencies, financial regulators, and emergency response teams. But risk in government is fragmented. Banking fragility sits with one agency, climate resilience with another, cyber threats elsewhere. This siloed approach creates blind spots. Without a unified risk lens, the system reacts to crises instead of pre-empting them. A National CRO would provide precisely this integrated oversight.

The financial sector offers a clear lesson. For years, economists warned about Bangladesh’s rising non-performing loans—driven by corruption, weak governance, and political interference. Yet little was done. The result: a banking system in distress, scrambling for stabilisation. A CRO could have flagged these vulnerabilities sooner. Risk management is not about predicting the future, but about ensuring the nation is not caught off guard.

Every crisis—economic, financial, or geopolitical—boils down to one question: was it anticipated? The corporate world understands this well. No major organisation operates without a Chief Risk Officer to map, monitor, and mitigate risks before they escalate. Governments must embrace the same discipline. India, with its own complex risk landscape, cannot afford to be reactive.

The argument against a National CRO is that governments already have intelligence agencies, financial regulators, and emergency response teams. But risk in government is fragmented. Banking fragility sits with one agency, climate resilience with another, cyber threats elsewhere. This siloed approach creates blind spots. Without a unified risk lens, the system reacts to crises instead of pre-empting them. A National CRO would provide precisely this integrated oversight.

The financial sector offers a clear lesson. For years, economists warned about Bangladesh’s rising non-performing loans—driven by corruption, weak governance, and political interference. Yet little was done. The result: a banking system in distress, scrambling for stabilisation. A CRO could have flagged these vulnerabilities sooner. Risk management is not about predicting the future, but about ensuring the nation is not caught off guard.

For India, the need is even more urgent. The economy is deeply intertwined with global markets, and is vulnerable to currency fluctuations, energy shocks, and supply chain disruptions. The past two decades have seen repeated crises—the 2008 financial meltdown, 2016 demonetisation, the IL&FS liquidity crunch, and the Covid-19 pandemic. Security threats—from Uri, Pulwama, and Galwan to border skirmishes, shifting ties with neighbours, illegal refugee inflows, and Indian Ocean challenges—have intensified risks. Risk is neither an event nor an exception—it is the constant undercurrent of existence. The number of possible risks is infinite, but the resources to address them are finite. In such a world, the key is not to predict every storm, but to build a system that can withstand, adapt, and evolve through uncertainty.

Emerging threats only compound the urgency. AI-driven deepfakes and cyberattacks threaten national security. Climate change is worsening extreme weather events. Banking sector fragility, geopolitical tensions, and misinformation-fuelled unrest add to volatility. With India’s growing global role, the absence of a structured risk management framework is a gamble the country can no longer afford.

A single financial crisis can wipe out decades of growth. Political and security risks are just as severe, from border tensions to cyber warfare threats. Climate disasters are now an economic issue, not just a humanitarian one. A National CRO, backed by data-driven risk modelling, scenario analysis, and AI-powered tracking, would enable proactive decision-making instead of reactive firefighting.

Several nations have already embedded risk governance at the highest levels. Singapore integrates risk assessment across ministries for early threat detection. Switzerland’s stability stems from meticulous risk planning. The UK and US have dedicated risk offices in financial regulation and national security frameworks. India must take a similarly structured approach, placing risk management at the core of governance.

The role is not about politics or policymaking. It is about independent, data-driven risk assessment. A National CRO should function like a corporate risk head, reporting to the Prime Minister’s Office or the National Security Council. With global best practices like ISO 31000 and the IRM Risk Culture Framework, the CRO would act as India’s central intelligence hub for national risk management.

Corporate India already embraces Enterprise Risk Management, using scenario planning and stress testing to safeguard businesses. The government must do the same. The World Economic Forum’s Global Risks Report consistently flags economic instability, climate shocks, and cyber threats as India’s top risks—yet a centralised risk management function remains absent.

Technology makes risk anticipation sharper. Predictive analytics can track macroeconomic shifts, banking sector fragility, and climate risks in real time. Stress testing and early-warning systems—commonplace in business—must become government standards. Risk is not just about economic stability; it is about political survival. Sri Lanka’s collapse began with a currency crisis, Pakistan’s financial distress has fuelled political chaos, and Bangladesh is battling multiple fault lines. India must not wait for a crisis to institutionalise risk management.

The biggest barrier is mindset. In a democracy, will legislators see a National CRO as a threat to their authority? Would bureaucratic silos resist central oversight? Risk management is often misunderstood as limiting action when, in reality, it enables better decisions. The question is not whether India should have a Chief Risk Officer. The real question is: can India afford not to?

Dr. Srinath Sridharan is a policy researcher and corporate advisor.

Hersh Shah is chief executive officer, IRM India Affiliate.

Disclaimer: The views expressed here are those of the author, and do not necessarily represent the views of NDTV Profit or its editorial team.