Basel III Consultancy

CRISIL Risk Solutions works with banks to provide analytics and consulting services and solutions. Our consulting service includes:

  • Diagnostic assessment of impact of Basel III on a bank’s capital and liquidity strategy
  • Advisory to banks on credit and investment portfolio optimisation by combining analytics of their existing portfolio trends, future business plans, insights from our research on a variety of sectors, and transitional arrangements for capital
  • Design framework for risk-based pricing and decision-making 
  • Design liquidity management strategy
  • Design risk measurement models for credit risk and market risk management
  • Design expected loss-based provisioning framework in accordance with IFRS guidelines

 

CRISIL conducts product and branch risk-adjusted performance analytics for optimal incremental investments and rationalisation. We also suggest process improvements for advisory engagements in the interest of cost rationalisation.

Capital Management (ICAAP)

CRISIL Risk Solutions' Pillar II Services (CPL2), under its Basel II suite of offerings, addresses requirements of the internal capital adequacy assessment process (ICAAP). The CPL2 framework has been designed to ensure regulatory compliance and facilitate risk-based strategic planning and decision-making. The framework also supports capital allocation across business units, based on individual risk profiles.

Risk assessment templates measure qualitative risk. Scorecard-based assessment facilitates continuous monitoring.

 

Risk measurement methodologies offer documentation of methodology and assumptions, and are designed on principle of proportionality.Stress testing & scenario analysis models document methodology and assumptions.

 

The scenarios are customised to local business conditions.Capital budgeting & allocation models offer documentation of methodology and assumptions. 

 

Design risk-based capital allocation plan to support decision-making process - ICAAP documentation comprises of detailed documentation of ICAAP components. User-friendly templates and measurement models support continuous assessment.

*All models are based on regulatory guidelines and international best practices.

 

Assistance in Migration to Advanced Approaches

The immediate imperative for commercial banks has been to comply with basic capital computation approaches of Basel II. Many banks with advanced risk management practices have made significant investments in systems to prepare themselves for migration to advanced approaches that permit better alignment of a bank's capital to inherent risk.

 

CRISIL Risk Solutions handholds banks in their journey to adopt more risk-sensitive approaches. The offerings include models and software in the area of credit, market, and operational risks. CRISIL Risk Solutions also can help a bank to optimally utilise its models and software and get accredited for adopting advanced approaches. Key features of the service are:

 

  • Gap analysis of risk management practices, models, systems and structure vis-a-vis requirements of a bank
  • Validation of models adopted by the bank (internal rating etc.) For further information click here
  • User test for risk management methodologies adopted by the bank
  • Preparation of final application to be submitted to regulator, with all necessary support documents and replies to any questions raised by regulators
  • Preparation of documents, wherever required, in support of models used by the bank. These would include rationales for each model, and coverage and effectiveness of the models.

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