Operational risk management refers to the systematic process through which banks identify, assess, monitor, control, and mitigate risks arising from inadequate or failed internal processes, people, systems, or from external events. Unlike credit risk or market risk, operational risk is inherent in all banking activities and can emerge from routine operations as well as exceptional circumstances. In the banking sector, operational risk includes risks related to fraud, technology failures, human errors, legal issues, compliance lapses, cyber threats, and disruptions caused by natural disasters or external shocks. Effective operational risk management is essential for ensuring financial stability, protecting reputation, complying with regulatory requirements, and maintaining customer trust. The concept of operational risk gained prominence with the Basel II framework, which formally recognized it as a distinct category of risk alongside credit and market risk. Banks are required to hold capital to cover potential operational losses, emphasizing the importance of a structured and proactive approach to managing such risks. Operational risk management is not limited to minimizing losses after they occur; rather, it focuses on preventing risk events, reducing their frequency and severity, and enhancing organizational resilience. It involves embedding risk awareness into the culture of the bank and ensuring that all employees understand their role in managing operational risk. The first major step in the operational risk management process is risk identification. This involves recognizing and documenting potential sources of operational risk across all functions, products, processes, and systems of the bank. Risk identification can be carried out through various techniques such as process mapping, risk and control self-assessments, internal audits, loss event data analysis, scenario analysis, and workshops with business line managers. Banks classify operational risks into categories such as internal fraud, external fraud, employment practices, clients and business practices, damage to physical assets, business disruption and system failures, and execution, delivery, and process management. Comprehensive risk identification ensures that both existing and emerging risks are captured in a timely manner. The second step is risk assessment and measurement. Once risks are identified, banks evaluate their potential impact and likelihood. Risk assessment can be qualitative, quantitative, or a combination of both. Qualitative assessment involves expert judgment, risk rating matrices, and scoring