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Request for Proposal and Quote
For
Providing Consultancy Service for
“Implementation of Advanced Approaches of Basel-II,
Achieving compliance with Basel III norms and Refinement of FTP & ALM in line with RBI guidelines
& International Best Practices in an Enterprise wide Integrated Risk Management System”
(Also referred to as Project in this RFP)
(Experience Next Generation Banking)
Integrated Risk Management Department
SIB House, 4th Floor, Mission Quarters,
Thrissur, Kerala-680001
Ph:-0487-2423858/2420020(Ext:-374)
Name of the Company : The South Indian Bank Limited
Date of issue of RFP document : 15-06-2013
RFP reference number : IRMD/ RFP /001/2013
Last Date and Time for receipt of RFP : 03-07-2013, 4.00 PM
Integrated Risk Management Department, The South Indian Bank Limited. Page 2
Disclaimer
The information contained in this Request for Proposal (RFP) document or information provided
subsequently to bidder(s) or applicants whether verbally or in documentary form by or on behalf
of The South Indian Bank Limited, is provided to the bidder(s) on the terms and conditions set out
in this RFP document and all other terms and conditions subject to which such information is
provided.
This RFP document is not an agreement and is not an offer or invitation to bid by The South
Indian Bank Limited to any parties other than the applicants who are qualified to submit the bids
(“bidders”). The purpose of this RFP is to provide the bidder(s) with information to assist them in
formulation of their proposals. This RFP does not claim to contain all the information each bidder
may require. Each bidder should conduct its own investigations and analysis and should check the
accuracy, reliability and completeness of the information in this RFP and where necessary obtain
independent advice. The South Indian Bank Limited makes no representation or warranty and
shall incur no liability under any law, statute rules or regulations as to the accuracy, reliability or
completeness of this RFP. The South Indian Bank Limited may in its absolute discretion, but
without being under any obligation to do so, update, amend or supplement the information in this
RFP.
Integrated Risk Management Department, The South Indian Bank Limited. Page 3
TABLE OF CONTENTS
1. ABOUT THE SOUTH INDIAN BANK LIMITED ..................................................................... 9
2. BACK GROUND ........................................................................................................................ 10
3. OBJECTIVE OF RFP .................................................................................................................. 11
4.A. BROAD SCOPE OF WORK ...................................................................................................... 11
4.A.1. CREDIT RISK............................................................................................................................. 12
I. Phase I: Preparatory tasks to be performed prior to implementation of IRB .............................. 12
II. Phase II: Implementation of Enterprise wide risk management architecture for complying with
IRB Approach .............................................................................................................................. 14
III. Phase-III Review the results of Parallel run ................................................................................ 17
IV. Phase-IV Assistance in preparing application for approval, solving queries and obtaining
Approval from RBI ...................................................................................................................... 17
4.A.2. MARKET RISK .......................................................................................................................... 17
I. Phase I. Preparatory tasks to be performed prior to implementation of IMA ............................. 17
II. Phase II. : Implementation of Enterprise wide risk management architecture for complying with
IMA Approach............................................................................................................................. 18
III. Phase-III Review the results of Parallel run ................................................................................ 20
IV. Phase IV. Assistance in preparing application for approval, solving queries and obtaining
Approval from RBI ...................................................................................................................... 20
4.A.3. OPERATIONAL RISK ............................................................................................................... 21
I. Phase I: Preparatory tasks to be performed prior to implementation of AMA ............................ 21
II. Phase-II Implementation of Enterprise wide risk management architecture for complying with
AMA Approach ........................................................................................................................... 25
III. Phase-III Review the results of Parallel run ................................................................................ 28
IV. Phase IV. Assistance in preparing application for approval, solving queries and obtaining
Approval from RBI ...................................................................................................................... 28
4.A.4. Pillar 2 - ICAAP Development & Implementation ..................................................................... 28
4.A.5. BASEL III ................................................................................................................................... 30
4.A.6. ALM & FTP ................................................................................................................................ 30
4.A.7. Preparation of RFP document for selection of vendor for supply of hardware and software
required for implementation ........................................................................................................ 31
4.A.8. The Pillar-3 aspects ..................................................................................................................... 34
4.A.9. Training ....................................................................................................................................... 34
4.A.10. Project Documentation and Manuals ........................................................................................... 34
5. REPORTING PROGRESS ......................................................................................................... 34
Integrated Risk Management Department, The South Indian Bank Limited. Page 4
6. AMENDMENT OF RFP: ............................................................................................................ 34
7. SUBMISSION OF BIDS ............................................................................................................. 35
8. ELIGIBILTY CRITERIA ........................................................................................................... 37
9. SELECTION STRATEGY ......................................................................................................... 39
10. AWARD OF CONTRACT ......................................................................................................... 43
11. TERMS OF PAYMENT ............................................................................................................. 49
12. PROPOSED TIME SCHEDULE FOR COMPLETION OF ASSIGNMENT ............................ 49
13. GENERAL TERMS AND CONDITIONS ................................................................................. 50
14. LITIGATION .............................................................................................................................. 51
15. INFORMATION SECURITY ..................................................................................................... 52
Integrated Risk Management Department, The South Indian Bank Limited. Page 5
LIST OF ANNEXURES
Annexure-1
Particulars to be furnished in the bid/ proposal ................................................................................ 53
Annexure 2
Format for furnishing the profile of the consulting Project Manager, team leader and members: ... 54
Annexure-3
Forwarding Letter Format ................................................................................................................. 55
Annexure 4
Undertaking Format .......................................................................................................................... 57
Annexure-5
Bidder‟s proposed methodology / approach for providing services to the Bank with respect to the
scope of consultancy work: .............................................................................................................. 58
Annexure-6
Commercial Bid ................................................................................................................................ 59
Annexure-7
Agreement Form ............................................................................................................................... 61
Annexure 8
Performance Bank Guarantee Format............................................................................................... 67
Annexure-9
Non-Disclosure Agreement Form ..................................................................................................... 71
Annexure-10
Notification of Acceptance ............................................................................................................... 77
Annexure 11
Authorization Letter Format ............................................................................................................. 78
Integrated Risk Management Department, The South Indian Bank Limited. Page 6
INVITATION FOR BIDS:
The South Indian Bank Ltd, hereinafter called “The Bank” intends to have Consultancy Services
for implementation of Advanced Approaches of Basel-II, achieving compliance with Basel III
norms and Refinement of FTP & ALM in line with RBI Guidelines & International Best Practices
in an Enterprise wide Integrated Risk Management System. The Bank invites separate sealed
bids, both technical bid and commercial bid, from eligible bidders for the above mentioned
purpose.
A complete set of Request for Proposal (RFP) can be purchased during office hours on all
working days either in person or by Post/E-mail on submission of a written application. The
bidders who purchase the RFP in their names only are eligible for submission of bid. The bid shall
be accompanied with a non-refundable fee of Rs.10, 000/- in the form of Demand Draft in favour
of “The south Indian Bank Ltd” payable at Thrissur.
Complete set of RFP for the above purpose can also be downloaded from Bank‟s official website
www.southindianbank.com - Quick Access-Tender/auction-RFP for consultancy services .The
bidder who has downloaded the RFP from the above website, is required to submit a non-
refundable fee of Rs.10, 000/- in the form of DD, in favour of “The South Indian Bank Ltd”
payable at Thrissur during office hours within the last date and time of submission of bid, failing
which the bid of the concerned bidder will not be entertained. The hard copy of this document
(RFP) procured from the bank or downloaded from the official website, will alone be treated as
authenticated copy for all purposes.
Bid Collection and submission details are given below.
Bid Reference number RFP IRMD/001/2013
Date of issue of RFP : 15.06.2013
Last date and time for seeking
Clarification
: 27.06.2013 , 4 PM
Last date and time for submission of
Bids
: 03.07.2013, 4.00 PM
Completion of Technical & Commercial
Bid evaluation by Bank and last date for
informing the qualified bidders for
presentation and negotiation
:
16-07-2013
Last date for final negotiation with the
qualified bidders
: 23-07-2013
Cost of RFP document (non refundable) : Rs. 10,000/- in the form of Demand Draft in
favour of “The South Indian Bank Ltd” payable at
Thrissur. The DD should be submitted along with
the Bid
Integrated Risk Management Department, The South Indian Bank Limited. Page 7
Address for submission of bids : The Chief General Manager (IRMD)
The South Indian Bank Ltd
Integrated Risk Management Department,
SIB House, Head Office,
2nd Floor, Mission Quarters
Thrissur , Kerala,
India – 680001
Contact Person : Ms Chithra H, AGM
Integrated Risk Management Department
Telephone and Fax : Tele: 0487-2423858/2420020(Ext:-374)
Mobile: 9447904585
Fax: 0487-2424551
E– mail : chithra@sib.co.in, ho2012@sib.co.in
Note:-
Before bidding, the bidders are requested to carefully examine the RFP Document and the
terms and conditions specified therein. If any bidder requires any clarification on this RFP,
may notify the Bank in writing or by email at the Bank‟s mailing address indicated in the
RFP on or before 27.06.2013, 4 PM.
Bidders should notify the Bank of any error, omission, or discrepancy found in this RFP
document not later than 25.06.2013 4:00 PM.
All costs and expenses (whether in terms of time or money) incurred by the bidders in any
way associated with the development, preparation and submission of responses, including
but not limited to attendance at meetings, discussions, demonstrations and for providing
any additional information required by Bank, will be borne entirely and exclusively by the
bidders.
All bids (Technical & Commercial) must be submitted at the same time giving full
particulars in separate sealed envelopes at the bank‟s address within the time period
specified above.
The Bank reserves the right to accept or reject in part or full any or all the offers without
assigning any reasons whatsoever.
No further discussion/interface will be entertained with bidders whose bids have been
technically disqualified.
Those qualified bidders may depute their representative/s (not more than 3) to attend the
negotiation meeting held on or before 23-07-2013. The representative/s has/have to submit
an authority letter duly signed by the bidder, authorizing him to represent and attend the
negotiation process on behalf of the bidder. The format of the authorization letter is given
in Annexure-11.
The scope of the services specified under this RFP is governed by the guidelines issued by
RBI on implementation of IRB, IMA and AMA approaches of Basel- II. Any change
made by RBI on these matters by way of amending the existing guidelines or issue of
fresh guidelines on these matters shall automatically enlarge the scope of work specified
under this RFP and the duties of consultant shall deemed to be discharged only when the
Integrated Risk Management Department, The South Indian Bank Limited. Page 8
bank complies with the revised guidelines issued on this matter.
The Bank expressly stipulates that the selection of Consultant under this RFP is on the
understanding that this RFP contains only the principal provisions for the entire
assignment and the services rendered in accordance with the scope of work defined under
this RFP are only a part of the assignment. The Consultant shall perform all such tasks,
render requisite services as may be required for successful completion of the project to the
satisfaction of the Bank at no additional cost to the Bank.
Chief General Manager
Integrated Risk Management Department
The South Indian Bank Ltd
Thrissur
Integrated Risk Management Department, The South Indian Bank Limited. Page 9
• Number of years in banking business84Years
• Number of branches750
• Number of ATM‟s800
• Business as on 31.03.2013Rs. 76077 Crore
• Business Growth (Y – to – Y)19.28%
• Last 5 years business CAGR26%
• Net Profit for the year ended March 2013Rs.502.27 Crore
• Net Interest Margin (March 13)3.21 %
• Capital Adequacy Ratio (Basel II –March 13)13.91%
• Net Non-Performing Assets (March 13)0.78%
1. ABOUT THE SOUTH INDIAN BANK LIMITED
The South Indian Bank Limited (website- www.southindianbank.com) is one of the leading
Scheduled commercial banks having more than 750 branches spread across 29 States/ Union
Territories in India. The Head (Registered) Office of the Bank is situated at Thrissur, Kerala State.
There are Nineteen Regional Offices (ROs), geographically spread across the country, coming
under the administrative control of the Head Office. The Bank plans to open 50 new branches and
200 ATMs in the current financial year so as to reach the corporate goal of 800 Branches and
1000 ATMs and a business target of Rs.100, 000 Crores by March 31, 2014.
The South Indian Bank Limited offers various customer services such as Anywhere-Any Time
Banking supported with online ATMs, Internet Banking, International ATM-Cum-Debit Cards,
Mobile Banking, online payment, on line trading etc. The Bank has already adopted significant
technological advancements and uses them to leverage business operations such as NDS-PDO,
RTGS, NEFT, Domestic ATM sharing, NPS, SWIFT, Treasury, Forex, etc.
The bank is using „Finacle‟ (from M/s. Infosys Technologies Ltd) as the Core Banking Solution
(CBS).The bank achieved 100% roll out of Finacle as on March, 31, 2007. The Bank presently
uses Finacle 7.0.25 version and it proposes to upgrade the Core Banking Software to Finacle
version 10 by February 2014. The bank has setup a robust scalable state-of-the art Wide Area
Network connecting its various branches and offices with its Data Centre. These branches are
connected to datacenter through dual redundant MPLS WAN connectivity.
The South Indian Bank Limited… At A Glance (As on 31.03.2013)
Integrated Risk Management Department, The South Indian Bank Limited. Page 10
2. BACK GROUND
In terms of RBI guidelines vide circular DBOD.No.BP.BC.90/20.06.001/2006-07 dated April 27,
2007 and subsequent guidelines on the New Capital Adequacy Framework our bank has adopted
following methods for calculation of Capital Adequacy under BASEL II norms.
Credit Risk Standardized Approach
Market Risk Standardized Duration Method
Operation Risk Basic Indicator Approach
The bank is presently using 19 internally developed rating models to measure the credit risk
associated with different exposures. The computation of risk weighted assets for credit risk under
standardized approach is done in Excel sheet after obtaining required information from Finacle
and external rating database. The capital charge for market risk is computed in Excel sheet using
M-Duration function after obtaining data from Treasury software and necessary market
information. The capital charge for operational risk is computed in Excel sheet, in accordance
with formula prescribed by regulator. In short, the computation of CRAR under standardized
approach is being done/managed using MS- Excel and without use of any software solution.
To improve the risk management practices of Indian banks, RBI has come out with guidelines &
time schedule for migrating to advanced approaches for all the above three risks. Hence we intend
to upgrade our existing risk management systems and processes and implement Enterprise-wide
Integrated Risk Management Solution compliant with the requirements prescribed under the
guidelines issued by RBI in respect of advanced Approaches (AMA-Operational Risk, IMA-
Market Risk and IRB - Credit Risk) of Basel-II and in respect of Basel-III. We also plan to
benchmark our ALM and FTP methodology in tune with leading international best
practices/extant RBI guidelines. Implementing such a system will help the Bank to integrate risk
management into day-to-day decision making.
To assist us in abovementioned tasks, we are planning to use the services of a competent
consultant. The selected consultant is required to hand hold the Bank till RBI gives approval for
risk management framework adopted by bank to comply with advanced approaches of Basel-II.
The period of contract with the selected consultant will expire only when our bank receives
approval from RBI for migration to advanced approaches. The scope of the consultant‟s
engagement shall also include the assistance in any change required to be made in risk
management framework on account of new guidelines/changes in existing guidelines issued by
RBI on these matters in future.
Integrated Risk Management Department, The South Indian Bank Limited. Page 11
3. OBJECTIVE OF RFP
The Bank has decided to float this RFP to achieve the following objective:
To invite techno-commercial bids from corporate body/ Public or Private Ltd
company/Public sector undertaking/ Partnership Firm/LLP, for the scope of work as
outlined in Point No:-4
To appoint a competent consultant, through an open tendering process, for assisting in
implementing Advanced Approaches of the Basel II framework for Credit, Market and
Operational Risks in line with the guidelines of RBI, for achieving compliance with
Basel-III norms and refinement of FTP & ALM in line with RBI Guidelines &
International Best Practices in an Enterprise wide Integrated Risk Management System.
4.A. BROAD SCOPE OF WORK
To Study the existing Risk Management systems, policies and processes implemented by
the Bank vis a vis regulatory requirements under Advance Approaches of Basel II and
suggest, guide and assist the Bank in enhancement/ up gradation of existing risk
management systems, policies and processes for implementing Enterprise-wide
Integrated Risk Management System, compliant with the regulatory requirements for
Advanced Approaches (TSA & AMA-Operational Risk, IMA-Market Risk, Standardized
& IRB Approaches - Credit Risk).
To assist the Bank in selection, acquisition and customization of suitable software
solution and hardware for implementing existing as well as Advanced Approaches under
Basel II guidelines for Enterprise-wide Integrated Risk Management System suitable for
the Bank.
To assist the Bank in implementing advanced approaches of Basel II under all the three
pillars
Assist Bank in preparing application to the RBI for getting approval in respect of
migration to the Advanced Approaches and assisting the Bank in replying to the
observations of RBI and extend assistance till the approvals are received.
To assist the Bank for achieving compliance with Basel-III norms and refinement of
FTP & ALM in line with RBI Guidelines & International Best Practices
To hold training program for the staff involved in identification, measurement and
monitoring of risks required for implementation of advanced approaches, compliance
with Basel- III norms and refinement of ALM and FTP.
The consultant will be responsible for monitoring the project till completion of all the
stages of the project and satisfactory full implementation.
To provide assistance in any change required to be made in risk management framework
on account of new guidelines/changes in existing guidelines issued by RBI on these
matters in future.
To explore the possibility of obtaining the benefit in terms of reduced capital charge from
correlation between the credit and market risk
Integrated Risk Management Department, The South Indian Bank Limited. Page 12
To review the current method followed in computation of CRAR under standardized
approach and suggest for improvements in view of the emphasis laid down by RBI on
reduction in manual intervention
To verify the consistency between various reports generated under current MIS and assist
in developing an MIS which provide consistent and reliable information to facilitate
smooth transition to ADF.
The detailed scope of assistance has been given below
4.A.1. CREDIT RISK (Scope specific to credit risk management shall include but not
limited to following)
I. Phase I: Preparatory tasks to be performed prior to implementation of IRB
1. Basel II Diagnostic Study & Data Gap Analysis for Credit Risk
To review the current methodology applied in computation of credit risk weighted assets
under standardised approach.
Re-defining the roles and responsibilities and accountability of the risk management
committees and authorities, with regard to Credit risk Management, if required.
Study the existing policies related to credit and credit risk management and benchmark
the same with Basel II guidelines and identify the gaps.
The consultant would conduct a gap study to identify the missing data elements which are
currently not being captured and/or stored in our current CBS system. The gap
assessment should be done based on Basel II requirements and leading global practices in
risk management and suggest methods to bridge the gap.
Determine the data required to be captured by the Bank for calculating PD, LGD, EAD &
effective maturity, supervisory slotting and retail pooling under IRB approach.
Review the present Data collection system and MIS for evaluating gaps in procurement
and processing of data elements needed for computation of the RWA/ Regulatory Capital
under Standardized approach and IRB for Credit Risk.
To assist in developing data collection templates for data elements which are not being
captured by the Bank
To assist in development and implementation of a strategy to roll out the data collection
templates across the Bank for timely collection of data.
To assist in training the Bank personnel to collect the required data.
Assist the IT department of the Bank in closing any data gaps.
Review the methodology for computing haircuts, currency mismatch, maturity
mismatches etc for computing risk weights
To assess the preparedness of the bank in moving over to advanced approach and submit
a realistic time frame for implementing IRB approaches.
Integrated Risk Management Department, The South Indian Bank Limited. Page 13
Deliverables:
Data remediation report containing findings of data gap analysis and list of missing data
elements required to be captured in information system to compute capital charge under
the IRB approaches of Basel II
Data collection template for capturing missing data elements.
Roll out the data collection templates across the Bank for timely collection of data.
Trainings on data collection to the Bank‟s personnel.
Realistic time schedule for implementation of IRB approaches
A report showing the gaps in present Data collection system and MIS procurement
needed for computation of the RWA/ Regulatory Capital under Standardized approach
and IRB for Credit Risk
Report on review of the methodology for computing haircuts, currency mismatch etc for
computing risk weights
2. Validation of existing models and development of validation framework
Review of the existing rating framework, which includes 19 internally developed rating
models of the Bank and suggest improvements / modification for better measurement of
credit risk.
To review the models which are developed by the bank during the course of
implementation of advanced approach and suggest improvements
Review the need for existing/new models and to assist in establishing a logical rationale
for development/rejection of a model.
To assist in development of models compatible with two dimensional rating system
Develop policy for model validation
To establish a system to facilitate regular and timely model validation
Perform qualitative validation of the current/proposed rating models to assess the model
design, governance, documentation, and usage of models in business decision making
Perform quantitative validation to assess the discriminatory power (in case of borrower
ratings only), calibration and stability of the current/proposed models.
Provide recommendation on the usability of the current/proposed models in Basel II
implementation, need for re-calibration or re-building of models
Impart training to IRMD and Internal Audit Dept personnel on performing model
validation
If the consultant is assisting us in development of models they shall be responsible for
getting these models validated by an appropriate external agency acceptable to the bank
To recalibrate or rebuild rating model for NON SLR BONDS
Deliverables:
Validation Report of existing rating models of the Bank both qualitative and quantitative.
Model Validation Policy and benchmarking the model using internal/external data.
User Guide for Quantitative and Qualitative Validation.
Integrated Risk Management Department, The South Indian Bank Limited. Page 14
Recommendation on the usability of the current models in Basel II implementation, need
for re-calibration or re-building of models.
Comprehensive report to be submitted covering the above scope in whole.
Excel templates for performing model validation techniques
Models compatible with two dimensional rating system
Rating model for NON SLR BONDS
Further the consultant shall also ensure that the models are properly validated in accordance with
RBI guidelines/best international practices.
3. Credit Risk Control Unit (CRCU):
The consultant should assist the Bank in setting up Credit Risk Control Unit/units for
review of rating grades, rating process and rating criteria.
The consultant should advise on the organization structure, roles & responsibilities of
human resources of the CRCU.
Provide the skill set specification, required for each of the staff members.
To assist in identifying training requirements for the staff, design training programs and
develop the relevant training material for credit risk advanced approaches.
Develop an Internal Audit (IA) check list for review of rating system and provide training
to the Internal Audit (IA) Department.
Deliverables:
Documented roles and responsibilities of the Credit Risk Control Unit including
Staffing and skill set requirements.
IA checklist and training to IA Department.
Comprehensive report to be submitted covering the above scope in whole.
II. Phase II: Implementation of Enterprise wide risk management architecture for
complying with IRB Approach
1) Up-gradation of Policies related to credit and credit risk:
Enhance the current credit risk management policy (Document B) to make it compliant
with IRB approach requirements specified by RBI
Enhance/develop policies related to Credit including but not limited to Document A,
Counter party credit risk policy, retail lending policy to make the credit policy framework
compliant with IRB approach requirements specified by RBI
Policy on NPA management covering the following:
i) Methodology for identification and monitoring for NPAs.
ii) Standards to monitor stress assets, restructured assets.
iii) Standards for capturing recovery information.
iv) Methodology to compute best estimate of expected loss.
Integrated Risk Management Department, The South Indian Bank Limited. Page 15
Policy on Collateral Management should cover the following:
i) Methodology for categorization, valuation of collaterals.
ii) Methodology for collateral mapping to various facilities of a customer.
iii) Monitoring the performance credit risk mitigation techniques.
iv) Usage of collateral in estimation of Risk components under IRB approach.
Develop a policy for credit rating (covering governance, development, usage, validation,
risk parameter estimation aspects of rating models).
Deliverables:
Revised policies related to Credit Risk Management compliant with IRB approach
requirements specified by RBI
Policies on NPA management and collateral management in compliance with IRB
requirements specified by the RBI.
Revised policies on credit, counterparty credit risk and retail lending
2) Retail Pooling
The consultant should study the composition of the retail portfolio of the Bank and
develop methodologies to perform retail pooling. The retail pooling exercise should use
the retail scorecards which take into account application information and behavioural
information of the customers. The following aspects are to be covered
To facilitate pooling of retail exposure based on borrower risk characteristics and
transaction risk characteristics
To assist in developing the criteria for retail pooling methods based on statistical factors
for cluster identification
To assist in developing prototypes for retail pooling and tests to assess homogeneity
within a pool and heterogeneity across pools to distinguish default behavior.
To assist in Pool / group the retail exposures of the Bank to various asset classes as
prescribed in Basel II, IRB approach, based on statistical methods
To assist in developing reporting templates to monitor pool stability and migration.
To assist in design the rating score cards/models for rating all retail exposures
To assist in developing methods to capture required data to compute Probability of
Default (PD), Loss given default (LGD) and Exposure at default (EAD) for each retail
pool.
To assist in computing pool-wise PD, LGD and EAD in respect of retail exposures.
Back testing the model for predictive power of the model using various statistical
techniques for in the sample and out of the sample
Develop a behavioural scoring methodology for the bank.
Integrated Risk Management Department, The South Indian Bank Limited. Page 16
Deliverables:
A comprehensive report, including all related excel templates, containing the criteria for
retail pooling methods, methods to capture required data to compute PD, LGD and EAD
for each retail pool and other aspects covered in the scope of services listed out above
Rating score cards/models for rating all retail exposures
Training to staff for retail pooling
3) Estimation of PD, LGD, EAD and Effective maturity (M) for non-retail exposures
To design appropriate methodologies and processes to classify the assets in banking book
to five broad categories namely Corporate, Bank, Sovereign, Retail and Equity Exposure
as defined by RBI
To design a system to group relevant part of the corporate portfolio into four Specialized
Lending categories prescribed by RBI
To design and document the rating system in tune with RBI Guidelines on IRB Dec 2011.
The consultant shall also assist in modifying the rating system designed , if such
modification is necessitated by change in the abovementioned guidelines or issue of fresh
guidelines in this matter.
To design and refine rating models for non-retail exposures
To record actual default on IRB exposure classes using the definition prescribed in RBI
Guidelines
To establish a process for the capture, collection and storage of data fields relevant to
Probability of Default (PD), LGD and EAD estimation for the non-retail borrowers.
To establish PD computation framework for Sovereigns and Banks portfolio
To develop framework for calculation of normal and downturn Loss given Default (LGD)
considering relevant macroeconomic factors
To develop framework and methodology to calculate Exposure at default (EAD) for both
on and off balance sheet exposures.
To assist in building PD, LGD and EAD predictor models and conduct stress testing on
LGD and EAD
Develop implementation standards and operating guides for PD, LGD, and EAD model
development. The standards should cover the following aspects: a) Governance and
controls over the model development process, b) Process to approve and use a model, c)
Guidance on portfolio segmentation to determine the number of rating models to be
developed and allocation of exposures to various rating models, d) Guidelines on data
collection for model development, sample creation process and time weighting of
historical data e) Guidelines on the usage of statistical techniques and expert judgment in
model development and incorporation of conservatism in model development exercise
To develop a frame work for computation of capital charge under IRB
Integrated Risk Management Department, The South Indian Bank Limited. Page 17
Deliverables:
A comprehensive report containing all aspects covered in the scope of services listed out
above.
A frame work for computation of capital charge under IRB
Rating system in tune with RBI Guidelines on IRB issued in December 2011
Rating models for non-retail exposures
Predictor models for PD, LGD and EAD
Implementation standards and operating guides for PD, LGD, and EAD model
development.
III. Phase-III Review the results of Parallel run
To assist the bank in conducting parallel run for minimum two quarters
To review the results of parallel run. The review shall essentially include the comparison
of capital charge under standardized approach and IRB
To review the assumptions used for IRB
Deliverables:
A comprehensive report containing all aspects covered in the scope of services listed out
above.
IV. Phase-IV Assistance in preparing application for approval, solving queries and
obtaining Approval from RBI
To assist in preparation of application to RBI for migration to advance approaches for
IRB (Credit Risk)
To assist the Bank in finalization of the application for filing with the regulator.
To assist the bank in addressing the RBI queries and comments and making suitable
changes in the Basel II implementation (if necessary) The contract would only end after
RBI gives the permission to migrate to advanced approaches for Credit, market and
operational risks and the guidelines under the three pillars are fully implemented
4.A.2. MARKET RISK (Scope specific to Market Risk Management shall include but not
limited to the following)
I. Phase I. Preparatory tasks to be performed prior to implementation of IMA
Study the existing systems and procedures in Treasury Dept and suggest improvements in
the systems/procedures/new systems, if required for compliance /monitoring/reporting of
Regulatory Guidelines/ Internal Limits.
To assess the preparedness of the bank to move over to advanced approaches and submit
a realistic time schedule for implementation of IMA approaches within the overall
schedule for implementation.
Integrated Risk Management Department, The South Indian Bank Limited. Page 18
Enhancement of the market risk related policies, processes, and governance structure and
control framework in line with the qualitative requirements prescribed under IMA
Re-defining the roles and responsibilities and accountability of the risk management
committees and authorities, with regard to Market risk Management, if required
Study the Investment Valuation systems and procedures of investment portfolios in
Treasury books as per RBI guidelines and suggest improvements/customizations etc.
Validation of Mark to Market methodology, calculation methodology of various risk
factors and suggest the appropriate methodology in case the existing methodologies are
insufficient or inappropriate
Review of existing methods applied to compute VaR – assumptions, merits and
limitations, computational accuracy etc
Review the methodology applied in computation of Duration, Modified Duration of
SLR/Non SLR portfolio of Investments as well as Trading HFT, AFS & HTM separately
in Treasury Dept. Suggest improvements in systems/procedures in computation of
Duration /Modified Duration of SLR/Non SLR portfolios under different market
conditions.
Document report on systems and procedures for on line monitoring of regulatory limits,
operational limits, counterparty limits /Settlement limits & Country limits under all
portfolios of Treasury Operations as set out in various policies of the Bank.
Deliverables
A realistic time schedule for implementation of IMA approaches
Revised market risk management policy
Detailed gap analysis report on findings and recommendations for enhancement of
Market Risk Management (MRM) framework and bank‟s readiness for moving towards
IMA.
Report on systems and procedures for on line monitoring of regulatory limits, operational
limits, counterparty limits /Settlement limits & Country limits under all portfolios of
Treasury Operations as set out in various policies of the Bank.
Report on investment valuation systems, valuation methodologies and methods applied in
computation of VaR and duration.
II. Phase II. : Implementation of Enterprise wide risk management architecture for
complying with IMA Approach
To assist in developing and validating a framework for quantifying market risk under
IMA
To assist in preparing the market risk file and dossier as per RBI prudential guidelines
for IMA
To assist in developing back testing and stress testing framework in line with IMA
Integrated Risk Management Department, The South Indian Bank Limited. Page 19
To provide framework for fixing VaR based limits on an aggregate portfolio and
individual asset class levels in accordance with leading industrial practices
To establish an internal audit unit with the requisite qualifications and skills to audit
statistical models which shall review all calculations required for IMA
Suggest methodology for computation of capital charge including illiquid position for
incremental risk in the trading book.
To develop a market risk file which contains full technical specification of the model
To implement a system which facilitates computation of VAR of the trading book on a
daily basis
To prepare a purely non technical document with supporting excel templates for use of
inspecting officials and users to understand the assumptions used/ revised from time to
time and thereby enabling validation/ vetting from time to time
Develop VaR based Computation of capital requirement under IMA comprising, Normal
VaR measure (general market risk and specific risk), Stressed VaR measure (for general
market risk and specific risk) and Incremental Risk Charge (IRC) (for positions subject to
interest rate specific risk capital charge).
Comprehensive Validation of VaR models for various risks for different Asset Classes.
Define methodology for Value adjustment for illiquid positions as required under
Prudential Guidelines on Capital Adequacy and Market Discipline
To assist in developing methodology for Specific risk computation for equity, foreign
exchange contracts(including spot, forwards, options and swaps) , fixed income and
derivatives using internal data –The specific risk should have special emphasis on
computation of product specific credit estimation factors on account of market variables.
Develop framework for capturing Interest rate risk, Equity price risk (general and
specific) exchange risk and other risk as per guidelines.
Assist the Bank in segregating the trading book positions into the different categories like
Interest Rate risk, Equity position risk, Foreign Exchange risk, Commodities risk (as
applicable to Indian banking scenario) with interface with Bank‟s Integrated Treasury
Solution being procured by Treasury Branch Mumbai.
To suggest and implement methodology to avail benefit of correlation within and across
various portfolios in computation of VaR
To perform the statistical analysis to justify the level of correlation established between
portfolios/asset classes.
To establish a process for using data source/assumptions where historical prices are not
available.
To lay down reporting framework ( regulatory and internal MIS related in summary and
detailed form) for Capital charge, VaR statistics, Daily capital requirement, Back testing
zone report, PVBP analysis , stress testing summary and detailed report.
Integrated Risk Management Department, The South Indian Bank Limited. Page 20
Deliverables
A framework for quantifying market risk under IMA. The framework shall include excel
models which demonstrates computation of capital charge using dummy data.
The market risk file and dossier as per RBI prudential guidelines for IMA, which also
contains full technical specifications of the model
Back testing and stress testing framework in line with IMA
Framework for fixing VaR based limits on an aggregate portfolio and individual asset
class levels in accordance with leading industrial practices
Methodology for computation of capital charge including illiquid position for incremental
risk in the trading book
A purely non technical document with supporting excel templates for use of inspecting
officials and users to understand the assumptions used
VaR based Computation methodology to compute capital requirement under IMA
comprising, Normal VaR measure (general market risk and specific risk), Stressed VaR
measure (for general market risk and specific risk) and Incremental Risk Charge (IRC)
(for positions subject to interest rate specific risk capital charge)
Methodology for Specific risk computation for equity, fixed income and derivatives using
internal data
Reporting framework ( regulatory and internal MIS related in summary and detailed
form) for Capital charge, VaR statistics, Daily capital requirement, Back testing zone
report, PVBP analysis , stress testing summary and detailed report
III. Phase-III Review the results of Parallel run
To assist the bank in conducting parallel run for minimum two quarters
To review the results of parallel run. The review shall essentially include the comparison
of capital charge under standardized approach and IMA
To review the assumptions used for IMA
Deliverables:
A comprehensive report containing all aspects covered in the scope of services listed out
above.
IV. Phase IV. Assistance in preparing application for approval, solving queries and
obtaining Approval from RBI
To assist in preparation of approach for application to RBI for migration to advance
approaches for IMA (Market Risk)
To assist the Bank in finalization of the application for filing with the regulator
To assist the bank in addressing the RBI queries and comments and making suitable
changes in the Basel II implementation (if necessary) The contract would only end after
Integrated Risk Management Department, The South Indian Bank Limited. Page 21
RBI gives the permission to migrate to advanced approaches for Credit, market and
operational risks and the guidelines under the three pillars are fully implemented
4.A.3. OPERATIONAL RISK (Scope specific to Operational Risk Management shall
include but not limited to the following)
I. Phase I: Preparatory tasks to be performed prior to implementation of AMA
1) Gap Analysis & ORM Governance:
Conduct a gap analysis of the existing OR management vis-à-vis desired level of
Operational Risk (OR) management in accordance with the RBI guidelines issued on
Basel II advanced approach.
To assist in developing operational risk reporting system and strategies to identify,
measure and control / mitigate OR.
Advising on risk governance architecture suitable to the organizational structure of the
bank as a whole and for each business unit and detail roles and responsibilities at each
level.
To assist in developing an OR Management strategy and objectives for the Bank.
Re-defining the roles and responsibilities and accountability of the risk management
committees and authorities, with regard to OR Management.
To assist in formulating the roles and responsibilities of the independent bank wide OR
Management function.
To provide a description and statistical analysis of the internally derived analytical
framework that quantifies the operational risk exposure of the Bank.
Defining qualitative and quantitative factors and risk mitigants and incorporate them into
the OR Framework.
A discussion and documentation of the testing and verification processes and procedures.
To assist in regular reporting of critical risk issues facing the banks and its
control/mitigations to senior management and Board.
To assist in inserting appropriate provisions in OR management policy for review,
treatment, and resolution of non-compliance issues.
To create a system for validating/reviewing the OR Management processes and
assessment.
To assist in developing a methodology for risk reporting covering OR exposures, material
OR losses, material near-misses to the Board, Management and risk analysis.
Suggestion of suitable enhancements in arrangements required with relation to Business
Continuity (BCP) including Disaster Recovery (DR) AND Operational Risk for all areas
of Operations (Including Information Technology).
Review of existing ORM Policy for making the same compliant to the advanced
approaches of Basel II and regulatory requirements.
Integrated Risk Management Department, The South Indian Bank Limited. Page 22
To assess the preparedness of the bank to move over to advanced approaches and submit
a realistic time schedule for implementation of AMA approaches within the overall
timeframe fixed.
Deliverables:
Gap analysis report of the existing OR management vis-à-vis desired level of OR
management.
A realistic time schedule for implementation of AMA approaches
Risk reporting system and strategies to identify, measure and control / mitigate OR.
Report on risk governance architecture suitable to the organizational structure of the
bank as a whole and for each business unit.
Report on OR Management strategy and objectives for the Bank.
Document on description and statistical analysis of the internally derived analytical
framework that quantifies the operational risk exposure of the Bank, defining qualitative
and quantitative factors and risk mitigants, testing and verification processes and
procedures.
Reporting mechanism of critical risk issues facing the banks and its control/mitigations to
senior management and Board.
Documented methodology for risk reporting covering OR exposures, material OR losses,
material near-misses to the Board, Management and risk analysis throughout the Bank.
Report suggesting the required enhancements in MIS system for ensuring timely
operational risk reporting.
Documented reports on revision of framework and suggestion of suitable enhancements
in arrangements required with relation to Business Continuity (BCP) including Disaster
Recovery (DR) AND Operational Risk for all areas of Operations (Including Information
Technology).
Revision in ORM Policy to make it compliant to the Basel II and regulatory
requirements.
Report on gap analysis on MIS to capture all OR loss events including financial, non
financial, potential, near miss events etc.
2) The Standardized Approach (TSA)
Identification of business lines with reference to the Bank and methodology to meet
qualifying criteria as per TSA.
Mapping of Income / Expenditure heads in business lines as per Basel II and RBI
guidelines on TSA.
Develop a framework for capital computation as per The Standardized Approach (TSA)
and provide an approach to arrive at gross income across Basel business lines.
Oversee and manage the implementation of The Standardized Approach (TSA).
Assistance in developing the application to RBI to migrate to TSA approach of
operational risk, if required.
Integrated Risk Management Department, The South Indian Bank Limited. Page 23
Deliverables:
Framework for capital computation as per Standardized Approach of Basel II.
Comprehensive report to be submitted covering the above scope in whole.
One training on TSA methodology for personnel of Risk Management Dept at Head
Office.
Application to RBI to migrate to TSA approach of operational risk if required.
3) Risk & Control Self Assessments (RCSA):
Assistance in conduct of RCSA shall include but not limited to:
Develop at least 10 RCSAs for each business line and individual processes of the bank
Develop criteria to assess risk and control, identification of alternate approaches
available, selection of a suitable approach or combination of approaches, on the basis of
size, structure and business mix of the Bank and by analyzing cost benefit analysis of
various approaches.
The scope of the exercise and the areas/units to be covered and the priority of
identification. Advising on the process of risk identification.
Develop methodology and policy for conducting risk and control assessment and the roll
out plan across various units. The methodology should include setting up of rating scales
for risks and controls and evaluation of residual risks.
Suggesting templates to measure OR in terms of financial impact and likelihood of
occurrence, achievement of objectives etc. and its level and direction.
Conduct RCSA for all key business and processes (including Branches) across the Bank.
The key businesses should include but are not limited to: Treasury, Retail Banking
(liabilities, assets and cards), Trade Finance and Corporate Banking, Rural/priority sector
lending, Information Technology and International Banking.
Methodology to analyze the results and evaluation methods and criteria of controls.
Method of setting priority of risks/control and its application.
MIS templates for monitoring and analyzing the RCSA results.
Devise reports which includes Risk map, heat map, dashboards etc at each level starting
from process owners to the Bank as a whole.
Structure training and assessment workshops.
Conduct training sessions for RCSA (including methodology of risk and control
identification, assessment and rating)
Integrating risk assessment exercise with internal and risk based audit to avail maximum
benefit of it.
Deliverables:
RCSA Policy and Methodology.
RCSA Implementation across all the key businesses of the Bank.
Methodology for RCSA roll-out and aggregation of results.
Integrated Risk Management Department, The South Indian Bank Limited. Page 24
MIS templates for reporting RCSA results on an aggregated basis.
Comprehensive report to be submitted covering the above scope in whole.
Comprehensive training to Risk management department and 6 workshops for business
units.
4) Loss event management framework:
Development of loss data management framework and policy for capturing loss data
(including objective loss classification criteria).
Template for capturing the OR incidents, OR loss, potential loss and near-miss events in
day to day management.
Develop methodology for avoiding double counting of operational risk losses and
reconciliation of these losses with those in books of accounts / General Ledger.
Designing MIS for capturing the loss, potential loss and near- miss events.
Develop methodology to identify loss events to classify the events to a risk type e.g.
Credit / Market Risk.
Develop guidelines on boundary events.
Develop process to capture non financial loss.
Develop mechanism to follow up and update loss event until the event is closed.
Develop methodology for mapping/classification of Bank‟s loss events to different
business lines and loss event types.
Develop methodology for integration of external data with internal data and methods for
scaling external data with internal data.
Root cause analysis of all losses captured and other MIS templates for Operational Loss
reporting.
Fixing threshold limits for various operational risk loss event types/Business lines.
Develop framework to capture any potential increase in risk with account to increased
complexities arising out of business activities/volumes.
Conduct training sessions on the methodology of loss data identification, capturing,
analyzing and classification as mentioned in this scope.
Deliverables:
Loss event management Policy.
Template for Loss data collection.
Methodology for avoiding double counting of operational risk losses and reconciliation
of these losses with those in books of accounts / General Ledger.
Design MIS for capturing the loss, potential loss and near- miss events.
Methodology to identify loss events to classify the events to a risk type e.g. Credit /
Market Risk.
Methodology for integration of external data with internal data and methods for scaling
external data with internal data.
Comprehensive report to be submitted covering the above scope in whole.
Integrated Risk Management Department, The South Indian Bank Limited. Page 25
Comprehensive training to Risk management department and 6 workshops for business
units.
5) Key Risk Indicators (KRI) framework:
Development of KRI framework and KRI policy.
Developing a framework for identification and usage of KRI, setting thresholds for KRI,
frequency of reporting, frequency of KRI data collection etc.
Develop KRIs for key risks for all key business and processes across the Bank, including
capture of source system and calculation methodology. The key businesses should
include but not be limited to: Treasury, Retail Banking (liabilities, assets and cards),
Trade Finance and Corporate Banking, Rural/priority sector lending, Information
Technology and International Banking.
Develop KRI monitoring process (including KRI data collection).
Develop KRI monitoring and validation process and methodology to ensure effectiveness
of KRI in measuring risk level.
MIS templates for management reporting.
Develop a risk dashboard providing periodic snapshot of a top down assessment of key
risks, mitigation plans and effectiveness of controls.
Develop methods on scaling KRI with that of Industry trends.
Suggest on minimum and maximum number of KRI‟s at Bank level and reporting of such
KRI.
Conduct training sessions on KRI identification and monitoring methodology including
calibration of thresholds for key risk indicators as mentioned in the scope.
Deliverables:
KRI Policy
MIS template for KRI reporting and aggregation.
Statement showing the methodology document for identifying KRI‟s.
Identification of KRI‟s for all key risks identified during the RCSA exercise including
data elements and related calculations.
Comprehensive report to be submitted covering the above scope in whole.
Comprehensive training to Risk management department and 4-6 workshops for business
units
II. Phase-II Implementation of Enterprise wide risk management architecture for
complying with AMA Approach
1) Methodology and framework for quantifying operational risk under AMA:
Setting up qualitative and quantitative standards as per Basel II and RBI guidelines.
Develop methodology for recognizing insurance under the AMA, which will require
capturing elements through appropriate discounts or haircuts in the amounts of insurance
Integrated Risk Management Department, The South Indian Bank Limited. Page 26
recognition.
Develop statistical methodologies including the capture and use of internal and external
operational risk loss data including data potential events (including the use of Scenario
Analysis).
Build framework for quantifying operational risk under AMA and perform capital
computation (including stress testing) for key business areas.
Methodology for integration of external loss data with internal loss database.
The development and incorporation of business environment and internal control factor
assessments into the OR Framework.
To provide guidance on use of scenario analysis, internal loss data, BE&ICF and External
loss data for quantification of capital charge.
Provide support to define, assess levels of Correlation and Dependence of loss events,
other data elements and their application in AMA Models.
Provide data collection templates and road map for operational risk modelling under
AMA.
Setting distributional assumptions as well as modelling for operational risk loss severity
and the frequency of operational risk loss events.
Analyse the scope for back testing to validate operational risk models.
Documentation of any mathematical and statistical basis of the operational risk
measurement model.
Perform Sensitivity analysis of the operational risk measurement model and suggest
necessary modifications in bank‟s policies and methodology.
Coordinate the internal and external validation of Operational risk management system.
Perform Capital computation including stress testing for key business areas of the Bank.
Deliverables:
Framework for quantification of capital under Advanced Measurement Approach of
Basel II.
Setting up qualitative and quantitative standards (AMA soundness standards) as per Basel
II and RBI guidelines.
Methodology for recognizing insurance under the AMA.
Statistical methodologies including the capture and use of internal and external
operational risk loss data including data potential events (including the use of Scenario
Analysis).
Prototype for computation under AMA approach.
Capital computation models including stress testing for key business areas.
Document in relation to the mathematical and statistical working of the operational risk
measurement model.
Comprehensive report to be submitted covering the above scope in whole.
Comprehensive Training material to the Bank‟s Risk Management department on AMA
approach
Integrated Risk Management Department, The South Indian Bank Limited. Page 27
2) Internal Audit Convergence, new product/process approval and Use test approaches/
Validations
Methodology for assessing Operational Risk (OR) in new product / process Approval
Deliverables:
Framework document for assessing Operational Risk (OR) in new product / processes
3) Framework for leveraging existing risk based audit in ORM and integration of ORM
and audit
Deliverables:
Framework document for integration of ORM with Internal Audit.
Training programme and training material for Audit and Inspection professionals on
integration of ORM and audit.
4) Framework for embedding Risk Management in the day-to-day operations of the Bank
(mapping ORM to performance measurement system)
Deliverables:
Use test framework for ORM.
Suggesting techniques for creating incentives to improve the management of OR
throughout the Bank.
General Awareness Training Programme for Senior Management
5) Approach on use tests/validations.
Devise methodology to validate RCSA exercise to ensure its effectiveness in measuring
risk at various levels and address the gaps identified in the validation process.
Devise methodology to ensure effective monitoring and validation of KRI to ensure its
effectiveness in measuring risk level of each process and address the gaps identified in
the validation process.
Validate and assist the bank in internal reviews of BE&ICF‟s and address the gaps
identified in the validation process.
Provide validation services for internal and/or vendor models for Capital computation
under AMA and address the gaps identified in the validation process.
Testing and validation of all procedures and processes with regard to Enterprise wide
operational risk management and address the gaps identified in the validation process.
Assist bank in developing document for convergence of internal audit including Risk
Based Audits with Operational Risk Management.
Provide assistance to the bank in “Use test” approaches
Integrated Risk Management Department, The South Indian Bank Limited. Page 28
Deliverables:
Document methodology to validate RCSA exercise to ensure its effectiveness in
measuring risk at various levels.
Devise methodology to ensure effective monitoring and validation of KRI to ensure its
effectiveness in measuring risk level.
Documented reports for validation of Internal and/ or vendor model(s).
Documented reports on Internal review of BE&ICFs.
Documented report on “Use test” approaches.
Documented report on testing and verification of the processes and procedures with
respect to Enterprise wide Operational risk Management.
Documented report on internal audit convergence with Operational Risk Management.
Submit reports covering above Scope of Work in whole.
III. Phase-III Review the results of Parallel run
To assist the bank in conducting parallel run for minimum two quarters
To review the results of parallel run. The review shall essentially include the comparison
of capital charge under standardized approach and AMA
To review the assumptions used for AMA
Deliverables
A comprehensive report containing all aspects covered in the scope of services listed out
above.
IV. Phase IV. Assistance in preparing application for approval, solving queries and
obtaining Approval from RBI
To assist in preparation of approach for application to RBI for migration to advance
approaches for AMA (Operational Risk)
To assist the Bank in finalization of the application for filing with the regulator
To assist the bank in addressing the RBI queries and comments and making suitable
changes in the Basel II advanced approach implementation (if necessary) The contract
would only end after RBI gives the permission to migrate to advanced approaches for
Credit, market and operational risks and the guidelines under the three pillars are fully
implemented
4.A.4. Pillar 2 - ICAAP Development & Implementation
Review the existing ICAAP framework and risks identified under Pillar and conduct a
gap analysis in view of Basel II, Basel-III and RBI guidelines.
Identification of Bank specific risks and materiality testing framework
To assist in developing governance structure for the Bank‟s ICAAP and identify the roles
and responsibilities of Risk, Finance teams and senior management.
Integrated Risk Management Department, The South Indian Bank Limited. Page 29
Study the risk philosophy of the Bank, future growth strategies and stakeholder
expectations to formulate the risk appetite of the Bank for various risks faced.
To assist in defining qualitative and quantitative tolerance level for key risks of the Bank
to formulate and frame the risk appetite of the Bank.
To assist in developing standards and framework to integrate ICAAP in the day to day
management and business decisions.
To assist in refining the existing stress testing framework of bank. The framework should
facilitate assessing the impact of macroeconomic stress scenarios on the capital position
(for all quantifiable risks) and P& L of the Bank.
To assist in developing a stress testing system capable of testing for each of the credit,
market, interest rate, forex, liquidity, concentration risk on individual basis and aggregate
the results of stress testing. The system should at the same time assist in reporting, back
testing and assessment of capital for Pillar‐II risks. Additionally, the system should also
support aggregation of Pillar‐II capital into Bank‐wide capital (regulatory & Economic
capital) assessed.
To assist in developing and implementing measurement techniques for quantifiable risks
such as Concentration risk, Liquidity risk, IRRBB, Business risk, Residual Risk,
Counterparty Credit Risk etc. The latest RBI guidelines on Interest Rate Risk should be
taken into consideration for Liquidity Risk and IRRBB.
Provide risk assessment methodologies for non-quantifiable risks like Strategic risk,
Reputation risk etc.
Define capital cushion to cover other risks as per Pillar 2. All the Pillar 2 aspects should
be covered as per Basel II and RBI guidelines.
Report on the process for assessing overall capital adequacy in relation to risk profile.
Formulation of the procedures to be used for evaluating the correlation between various
risks
To assist the Bank in upgrading the existing ICAAP document.
To assist in ensuring compliance with the New Capital adequacy Framework (NCAF) of
RBI and all other related guidelines issued from time to time including those for
Supervisory Review Process (SREP), ICAAP as well as Market discipline.
Assess requirement of any system / software solution for the purpose of ICAAP.
To assist in developing methodology for assessing the Country Risk
Training of risk management department on ICAAP preparation and internal audit
department on ICAAP validation
Suggest ways for ICAAP validation, review and risk aggregation and address the gaps
identified in the validation process
Identify data elements to be captured for Risk adjusted return on capital employed (
RAROC), Risk Based pricing and suggest data remediation
To assist in developing a risk based pricing framework containing: a) Mechanism to
allocate costs to a new transaction and assess the marginal capital requirement for a new
transaction. b) Methodology to compute RAROC and price a new loan
Integrated Risk Management Department, The South Indian Bank Limited. Page 30
Deliverables:
Report on the risk philosophy of the Bank, future growth strategies and stakeholder
expectations to formulate the risk appetite of the Bank for various risks faced.
Report on qualitative and quantitative tolerance level for key risks of the Bank to
formulate and frame the risk appetite of the Bank
Formulation of the refined risk appetite statement of the Bank and capital cushion to
cover the risks as per Pillar 2.
Models to support quantification of Pillar 2 risks, compute bank wide economic capital
and enhanced stress testing.
Framework to integrate ICAAP in the day to day management and business decisions.
Frameworks to support management of qualitative risks.
Report on the process for assessing overall capital adequacy in relation to risk profile.
Formulation of the procedures to be used for evaluating the correlation between various
risks.
Audit Manual and check list for internal audit department to conduct ICAAP validation.
Report to be submitted covering the above scope in whole.
4.A.5. BASEL III
To provide guidance in computation of Leverage ratio, Liquidity coverage ratio and net
stable funding ratio in accordance with RBI‟s guidelines
To assist in developing a framework for computation of CRAR under Basel-III
To provide guidance in computation of additional capital charge for Credit valuation
adjustment (CVA) under Basel-III
To comply with Pillar-II and Pillar- III requirements prescribed under Basel-III
Deliverables:
Statement and procedure showing computation of LCR, NSFR ratio and other liquidity
ratios prescribed by RBI.
Framework for computation of CRAR under Basel-III
Model disclosures prescribed in RBI Circular DBOD. No.BP. BC.98/21.06.201/12-13 or
amended /revised from time to time.
4.A.6. ALM & FTP
To enhance ALM policies as per latest RBI guidelines
To enhance framework and templates for Net Interest Income (NII) and Market Value of
Equity (MVE) for interest rate risk in banking book
To enhance framework and templates for Structural and Dynamic Liquidity analysis
To enhance framework and templates for conducting behavior analysis of assets and
liabilities for liquidity risk
Integrated Risk Management Department, The South Indian Bank Limited. Page 31
Suggest methodology to conduct behavioural study on distribution of assets & liabilities
for liquidity risk under embedded optionality etc including drawdown pattern of undrawn
balance under Cash Credit and Term Loan
To develop behavioral models for assets & liabilities like Term Deposits & Term Loans.
To enhance the existing stress testing policy framework for ALM
Validation of the existing slotting of RSA and RSL into respective buckets
Enhance Dynamic Liquidity Report & Earning at Risk Report and methodology and
framework for change in Market Value of Equity for domestic, overseas and Global
position
Review the present Contingency Funding Plan and provide recommendations
Validations/ back testing of ALM models, its assumptions on various behavioural
patterns
To develop a framework for Matched Maturity method for FTP
To develop a fund transfer pricing framework as per the leading industry practice
To assess whether the existing software systems are capable of computing the ratios
prescribed under Basel- III and RBI guidelines on liquidity
Deliverables:
Fund transfer pricing framework as per the leading industry practice
Revised ALM policy
Revised framework for conducting behavioural study
Enhanced templates for Structural and Dynamic Liquidity analysis
Report on suitability of the existing software systems in computing the ratios prescribed
under Basel- III and RBI guidelines on liquidity
A comprehensive report containing all aspects covered in the scope of services listed out
above.
4.A.7. Preparation of RFP document for selection of vendor for supply of hardware and
software required for implementation
In this phase the consultant is expected to assist the Bank in purchase of integrated
software solution for Implementation of Advanced Approaches of Basel-II, Achieving
compliance with Basel III norms and Refinement of FTP & ALM in line with RBI &
International Best Practices
Rendering necessary assistance to Bank in procurement of the required solution: - The
major steps involved (which are not exhaustive) include-
i. To provide a brief report on major players in the market who offer hardware and
software for this type of services. The report shall include a cost –benefit analysis.
ii. To define the scope, evaluation methodology, eligibility criteria, penalty clauses, bill
of materials, payment terms and other terms & conditions of the software solution.
Integrated Risk Management Department, The South Indian Bank Limited. Page 32
iii. Collate all the documents including the defined and agreed service levels and prepare
the RFP for Procurement of Solution for Enterprise wide Integrated Risk Management
Architecture in the Bank.
iv. To assist in defining Functional & technical requirement of hardware and software
v. To provide formats & schedules for the bidders to submit the technical information
vi. To provide format for submission of commercial bid.
vii. Delivery of the final RFP documents to the Bank for floating the same
Assist the Bank in conducting pre-bid meetings.
i. Assists the Bank in carrying out technical bid evaluation based on defined criteria and
format in RFP & provide a report to the Bank listing all technically qualified vendors
for RFP.
ii. Assist the Bank to carry out commercial bid evaluation based on defined criteria and
format in RFP.
iii. Assist in Total Cost of Ownership (TCO) analysis & provide a report to Bank detailing
the results of commercial evaluation.
iv. To assist in ensuring that the proposed solution has the capability to scale up for
meeting future requirements
To assist in solving Hardware and Network Related Issues
i. To specify the hardware requirement taking into consideration of efficiency level,
response time, data processing requirement, number of users, and all other parameters
to ensure that the efficiency of software system is not affected because of limitations
of hardware.
ii. Assess the Hardware benchmark, with the expected volume levels as specified by
Bank
iii. Assessment of the hardware configurations required to implement the proposed
solution/s including sizing of server (CPU, main memory required, storage
requirements etc.) taking into consideration the present and future volume estimates,
current technology and path for upgrade/growth.
iv. The Consultant will define the requirements of various other service providers, assist
in evaluating and selecting the prospective service providers. Consultant will also
monitor and assist the Bank in execution of services by said service providers.
v. To present a hardware topology diagram depicting the following :- a) Overall
hardware architecture Hardware requirements including sizing of the hardware and b)
Operating system and Relational Database Management System (RDBMS)
requirements
Integrated Risk Management Department, The South Indian Bank Limited. Page 33
Rendering assistance in customisation of the purchased solution, if required
i. To provide a list of prominent system integrators (i.e. parties who are capable of
customising the purchased software to requirements of the bank) in the market. The
report shall include a cost –benefit analysis.
ii. To assist in drafting RFP for selection of the integrator
iii. To assist in developing selection criteria for selection of integrator.
iv. To assist in defining the responsibilities of integrator at the time of signing the contract
with integrator
v. To ensure that the software customised by the integrator meet the requirements of the
bank.
(Note: - Please note that the steps mentioned herein shall apply only when the software
vendor does not customise the software without external assistance.)
Review of SRS & Assistance in UAT
i. Review of Software Requirement Specifications (SRS) and suggesting improvements.
ii. Assist in conducting the User acceptance testing (UAT) of the software solution &
Hardware during the Pilot implementation.
iii. Assist the Bank in implementation of the solution in tune with the deliverables
provided.
iv. Regular updates by way of presentations to the committee/s agreed in accordance with
the consultancy agreement
v. Assist the Bank in constructing test scenarios for functional testing of solution
procured
vi. Report on test results and level of compliance of the implemented solution
vii. Assist the Bank in addressing the gaps identified during Pilot implementation of the
Solution.
viii. Assist in integration of various existing/proposed networks relating to Enterprise-wide
Integrated Risk Management Architecture solution.
Validation of the software solutions
i. Assist in validation of the Enterprise-wide Integrated Risk Management solution by an
independent validating agency acceptable to the Bank.
ii. Full rollout of the solution across all the branches and assess the gaps.
iii. Assist in addressing the gaps identified during independent validation of the
Enterprise-wide Integrated Risk Management solution.
iv. Assist in Bank wide integration of the Enterprise-wide Integrated Risk Management
solution and fine tuned with the deliverables.
Integrated Risk Management Department, The South Indian Bank Limited. Page 34
v. To assist in drafting the contract and terms of the assignment with the software vendor
vi. To assist in ensuring that the proposed solution has the capability to scale up for
meeting future requirements
4.A.8. The Pillar-3 aspects
To assist in attaining compliance with disclosure standards as per Advanced approaches
of Basel II / RBI guidelines
Evaluation of Pillar 3 disclosures made by the Bank and suggesting suitable
enhancements
Suggest the voluntary disclosures both qualitative and quantitative
Deliverables
Report to be submitted covering the above scope in whole.
4.A.9. Training
The Consultant is expected to provide training at various stages in all areas of risk
management during the course of implementation.
The target group will include:
Board of Directors / Executives / Officials of Risk Management Dept
Trainers/faculty members from staff training college
Internal Inspectors, IS-auditors/ DICT personnel, Concurrent auditors etc
The number of sessions and number of trainees will depend upon the adequacy required
to implement the concepts in the organization. The contents of the training programme
will be finalized after discussions with the Bank. The consultant has to provide user
manuals, case studies and training materials to the participants.
4.A.10. Project Documentation and Manuals
All works related to the assignment handled are to be well documented and will form the
part of deliverables. They should be delivered both in hard copy and soft copy at the end
of the each stage.
5. REPORTING PROGRESS
The Consultant/ Bidder shall report progress of all the activities specified above and
submit free of cost fortnightly progress report about various aspect of the
works/Service(s) to The South Indian Bank Limited. The South Indian Bank Limited on
mutual agreement between both Parties may change the periodicity of such reports.
6. AMENDMENT OF RFP:
At any time prior to the deadline for submission of bids, The South Indian Bank Limited,
Integrated Risk Management Department, The South Indian Bank Limited. Page 35
for any reason, whether at its own initiative or in response to a clarification requested by a
prospective Bidder, may modify the RFP by amendment.
In order to afford prospective Bidders reasonable time in which to take the amendment
into account in preparing their bid, The Bank, at its discretion, may extend the deadline
for the submission of bid.
All bidders who have procured this RFP document from the bank shall be notified of the
amendment in writing by e-mail or fax or post, and all such amendment(s) shall be
binding on them
7. SUBMISSION OF BIDS
Technical bid & Commercial bids must be submitted at the same time in separate sealed
envelopes, giving full particulars at the Bank‟s address given below, on or before 3rd July
2013. All envelopes should be securely sealed and stamped. The Bidders shall seal the
Technical and Commercial bids separately. Thus there will be 2 envelopes one for
Technical Bid and one for Commercial Bid. The envelope containing the Technical Bid
should be super-scribed as “Technical bid for Consultancy Services” .The envelope
containing the Commercial Bid should be super-scribed as “Commercial Bid for
Consultancy Services”.
A. Bid Closing Date:
Bids should be submitted on or before 4:00 PM IST (Indian StandardTime) 03.07.2013.
B. Instruction to Bidders
RFP contains only the principal provisions for the entire assignment and that the services
in connection therewith are only a part of the assignment. The Consultant shall be
required to undertake to perform all such tasks, render requisite services as may be
required for the successful completion of the entire project at no additional cost to the
Bank.
The bidder is expected to examine and understand all terms and conditions in this RFP.
Bid shall be deemed to have been made after careful study and examination of the scope
of work given in this RFP with full understanding of its implications. The bid should be
precise, complete and it should include all particulars prescribed under Annexure-1 of this
RFP. Failure to furnish all information required under this RFP or submission of a bid not
as per RFP requirements will be at the bidder‟s risk and may result in rejection of the bid
and the decision of The South Indian Bank Limited in this regard will be final, conclusive
and binding.
The bidders have to clearly specify in the technical bid, the composition of the members
of the team/s proposed to be deployed to execute the assignment as per Scope of Work
mentioned in the RFP for respective risk areas. The composition of the team should be
furnished in the format given in Annexure-2
Integrated Risk Management Department, The South Indian Bank Limited. Page 36
The bidder should have the capability and experience of providing consultancy services
for smooth implementation of Advanced Approaches of the Basel II framework in Banks
This RFP is not transferable. Only the bidder, who has purchased this RFP in its name or
submitted the necessary RFP price (for downloaded RFP) will be eligible for participation
in the evaluation process.
Signing of Bid documents: Only authorized person of the organization shall sign all the
pages of the bid document and such bids shall only be binding. Digital signature is not
acceptable
A bidder can submit only one technical bid and one commercial bid.
Joint bidders will not be allowed.
C. Conditions related to Commercial Bid
The best and firm price (Professional fee) should only be quoted. It may be noted that
Bank will pay only the agreed price (professional fee) and no other expenses/fees claimed
shall be entertained.
The price should be quoted in Indian Rupees and should be exclusive of all applicable
taxes. However, the bidders should provide the break- up of the base price, taxes and cess
etc. The price shall be on a fixed price basis and should not be linked to the Foreign
Exchange. The proposed format for submitting commercial bid is attached in Annexure-
6
Escalation in price quoted is not permitted for any reason whatsoever. The price quoted
must be firm till complete execution of the Contract.
It may be noted that Bank will not pay any amount/expenses / charges / fees / traveling
expenses / boarding expenses / lodging expenses / conveyance expenses / out of pocket
expenses other than the “Agreed Professional Fee”.
D. Modification and Withdrawal of Bids
The bidder may modify or withdraw its bid after the bid‟s submission, provided that The
South Indian Bank Limited receives written notice addressed to CGM - Integrated Risk
Management Department, SIB House, 2nd Floor, Mission Quarters, Thrissur, and Kerala-
680001 of the modification or withdrawal, before the expiration of deadline prescribed
for submission of bids. In case of modifications, the bidder is expected to resubmit entire
bid. Only addendums/amendments will not be accepted.
E. Rejection / Acceptance of Bid
The South Indian Bank Limited reserves the right to accept or reject any or all the bids
without assigning any reason whatsoever. Any decision of The South Indian Bank
Limited in this regard shall be final, conclusive and binding on the bidder.
F. Cancellation of Bid
The South Indian Bank Limited reserves right to re-issue/re-commence the entire bid
Integrated Risk Management Department, The South Indian Bank Limited. Page 37
process and or any part in case of any anomaly, irregularity or discrepancy in regard
thereof without assigning any reason whatsoever, at the sole discretion of The South
Indian Bank Limited. Any decision in this regard shall be final, conclusive and binding
on the bidder.
G. Period of Validity of Bids
Validity Period: - Bids shall remain valid for 90 days after the date on which The South
Indian Bank limited has received the bid submitted by the party. The South Indian Bank
Limited holds the rights to reject a bid valid for a period shorter than 90 days.
Extension of Period of Validity :- In exceptional circumstances, The South Indian Bank
Limited may solicit the Bidder‟s consent to an extension of the validity period. The
request and the response thereto shall be made in writing. Extension of validity period by
the Bidder should be unconditional and irrevocable.
8. ELIGIBILTY CRITERIA
The bidders are required to meet the following eligibility criteria and provide adequate
documentary evidence for each of the criteria stipulated below. Only those bids satisfying all the
eligibility criteria would be further processed.
Sl No Eligibility criteria Details of Proof
1 Should be a Government Organization/ PSU /PSE
/ registered partnership firm/LLP/ a limited
company under Indian Laws / an autonomous
Institution promoted by RBI/GOI
Reference of Act/Notification,
Registration Certificate or any
document evidencing the
formation of entity
2 Should have existence in India for five years as
on 31.03.2013. (In case of mergers / acquisitions /
restructuring or name change, the date of
establishment of earlier / original Partnership
Firm / Limited Company / Institution can be
taken into account).
Letter of Commencement of
Business in case of Company,
Registration in case of others.
3 Should have a minimum average annual turnover
of Rs. 10.00 crores during last three financial
years for its India located office. (Not applicable
for nonprofit making organizations).
Should have made operating profits for the past 3
years in succession from its Indian Operations
(Not applicable for non-profit making
organizations).
Annual report, Balance Sheet /
P&L statement (Audited).
4 The firm should have never been blacklisted /
barred / disqualified by any regulator / statutory
body.
Self Declaration subject to
satisfaction of South Indian Bank
Integrated Risk Management Department, The South Indian Bank Limited. Page 38
Sl No Eligibility criteria Details of Proof
5 Should have been assigned /undertaken
consultancy for at least 1 Indian Scheduled
commercial bank for implementation of Basel- II
guidelines for advanced approaches for credit
risk, market risk and operational risk
Copies of the credential letters
from the clients
6 The consulting firm or its subsidiaries engaged in
providing software solution may bid for this RFP,
subject to the condition that any of their software
solutions under this project will not be considered
by the Bank for purchase during the period of
assignment, if the bidder is engaged by the Bank
for consultancy.
Self Declaration subject to
satisfaction of South Indian Bank
7 Should have complete understanding of Basel II
and Reserve Bank of India Guidelines on Risk
Management Systems and best practices to guide
the Bank to move to advanced approaches
Self Declaration subject to
satisfaction of South Indian Bank
8 Should have resources who have worked on
similar engagement of providing consultancy
services for Basel II, Credit, Operational and
Market risk management, developing RFP,
vendor evaluation and selection, defining the
functional requirements, project management of
implementation and UAT. All resources to be
deployed for the project should have had similar
experience in at least one scheduled commercial
bank in India. The Engagement Manager
proposed should have been with the firm for a
minimum of three years with the firm and the
engagement team should always have sufficiently
experienced hands during the pendency of the
engagement with SIB.
Confirmation from the Vendor
and profile of team members.
9 Should have a minimum income in consultancy
of at least INR Three crores per annum in the past
two years ended on 31-03-2012 from its Indian
operations and should not have incurred losses
during the last 3 years period ended on 31-03-
2012.
Audited financial statements and
I.T.
Return. Bidders have to submit
IT returns with bid (envelope A)
for eligibility criteria.
Integrated Risk Management Department, The South Indian Bank Limited. Page 39
10 The bidder should have experience in
extending consultancy services in risk
Management in Indian Banks.
Copies of the credential letters
from the clients
11 The bidder shall be able to show case at least one
site visit
Self Declaration subject to
satisfaction of South Indian Bank
9. SELECTION STRATEGY
The bank has formed an Executive level committee for selection of the consultant. The
committee shall recommend the consultant to be engaged for this assignment before Board and
the decision of our Board shall be final, conclusive and binding on the bidders.
The tentative evaluation criteria of the selection committee are given below.
A. Evaluation of Technical Bid:-
First, Technical bid documents will be examined from the Eligibility Criteria angle. The
bids of those bidders, who fulfill the eligibility criteria conditions related to bidder‟s
financial stability and experience fully, will be taken up for further evaluation/selection
process rejecting the remaining bids.
A maximum of 100 marks will be allocated for the technical bid. The details of technical
bid are given below.
Technical Evaluation Criteria
Sl.
No Major area
Marks
1 Experience of the consultant in India 5
having experience in risk management consultancy services-above 5 years 5
having experience in risk management consultancy services-above 4 years &
up to 5 years
4
having experience in risk management consultancy services - above 3 years
& upto 4 years
3
2 Specific Experience 75
Experience of executed/ executing Enterprise-wide Integrated Risk
Management Consultancy Services for Advanced Approaches in the Banks
operating in India (as demonstrated by the credential letters in Banks‟ letter
head submitted) as under:
Experience in
Five or more Scheduled Commercial Banks (with at least One Private Sector
NOTE: The Bank's decision in respect of eligibility criteria, evaluation methodology and
short listing of bidders will be final and no claims, whatsoever in this respect, shall be
entertained.
Integrated Risk Management Department, The South Indian Bank Limited. Page 40
Bank) - ( 100% Weightage)
Four Scheduled Commercial Banks (with at least One Private Sector Bank) -
( 90% Weightage)
Three Scheduled Commercial Banks (with at least One Private Sector Bank)
- ( 80% Weightage)
Two Scheduled Commercial Banks (with at least One Private Sector Bank) -
( 60% Weightage)
One Scheduled Commercial bank-50% weightage
Marks to be awarded for each sub-section of item no. 2.1 to 2.7 shall be as
per the above stated weightage
2.1 Credit Risk
1.Gap Analysis in respect of advanced approach (IRB)-1
2. Development of Policy Framework in tune with IRB guidelines issued by
RBI – 1
3. Development of Credit Rating Model for different asset classes as per IRB
approaches – 2
4. Rating Model Validation – 1
5. Developed Framework for capturing PD-1
6. Developed Framework for capturing LGD-1
7. Developed Framework for capturing EAD-1
8. Experience in Mapping/Categorization of assets as per requirements of
IRB approach – 2
9. Experience in retail pooling-1
10. RWA Computation methodology for Advanced Approaches – 3
11. Submitted application before RBI for FIRB/AIRB-1
15
2.2 Operational Risk
1. Gap Analysis in respect of advanced approach (AMA)-1
2. Development of Operational Risk Policy Framework in compliance with
IMA – 1
3. Implementation of RCSA framework – 3
4. Implementation of KRI framework – 3
5. Loss event management framework– 2
6. Identification of Scenarios for scenario assessments – 2
7. Capital calculation for AMA & Modelling – 3
15
2.3 Market Risk
1. Gap Analysis in respect of advanced approach (IMA)-2
2. Development of Market risk management Policy and Market risk Dossier
in compliance with IMA – 2
3.Assist in development and validation of Va R models-2
4. Devised a methodology for computing capital charge under IMA -2
5.Framework for improved technical analysis/monitoring/reporting
framework-2
10
Integrated Risk Management Department, The South Indian Bank Limited. Page 41
2.4 Pillar 2
1. Pillar II risk assessment and Capital required assessment – 4
2.Enhanced Stress Testing policy framework – 2
3. ICAAP Validation-2
4. Capital Planning – 2
10
2.5 System Implementation
1. RFP Preparation and vendor evaluation & selection – 5
2. Review / development of Software Requirement Specification & Function
Requirement Specification – 5
3. Performing/Assistance in UAT – 5
15
2.6 ALM, FTP and Basel-III
1. Assisted in computation of liquidity ratios prescribed under Basel-
III – 3
2. Experience in refinement of fund transfer pricing policy – 2
3. Experience in refinement of ALM – 2
4.Assist in computation of CRAR under Basel-III-1
8
2.7 Experience in working with regulatory bodies and industry bodies (like RBI
& IBA)
1. Yes -2
2. No - 0
2
3 Presentation by the Bidders 10
3.1
Demonstration of In-depth understanding of Bank‟s project requirements
through the technical proposal supplemented by power point presentation
covering detailed broken down activities to be performed, efforts estimation,
manpower to be deployed, planning, design and time frame
5
3.2 Answers to the Bank during presentation 5
4 Profile of the Team proposed to be deputed for implementing the
project referred in this RFP
10
4.1 Number of team members who have credit management consulting
experience in India
1. Number - 3 or more – 2
2. Number - Less than 3 – 1
2
4.2 Number of team members with Market Risk consulting experience in India
1. Number - 3 or more – 2
2. Number - Less than 3 – 1
2
4.3 Number of team members with ORM consulting experience in India
1. Number - 3 or more – 2
2. Number - Less than 3 – 1
2
4.4 Number of team members with ICAAP review or development experience in
India
1. Number - 3 or more – 2
2. Number - Less than 3 – 1
2
Integrated Risk Management Department, The South Indian Bank Limited. Page 42
4.5 Number of team member with experience in conduct of UAT, software
selection, software customisation for risk solutions in India
1. Number - 3 or more – 2
2. Number - Less than 3 – 1
2
The technical proposals only will be subjected for evaluation at this stage. The bidders
scoring less than 70 marks (cut-off score) out of 100 marks in the technical evaluation
shall not be considered for selection process. Once the evaluation of technical proposals is
completed, the bidders who score equal to, or more than the prescribed cut-off score will
only be short listed. The scoring will be done by the bank‟s own team or experts engaged.
In case none of the bidders score 70 or more, the Bank may, at its sole discretion,
consider 3 bidders who has scored highest technical score for next round of evaluation.
B. Evaluation of Commercial Bid:-
The commercial bids shall comprise of Professional Fees / Price quoted in Indian
Currency only and shall be all inclusive. The Commercial Bid shall be on a fixed price
basis. The price must include all costs, taxes and levies including Service Tax.
C. Combined Evaluation of Technical and Commercial Bids
A comprehensive “Score (S)” will be arrived at after considering the commercial quote
and the marks obtained in technical evaluation with relative weights of 30% for
commercials and 70% for technical.
Computation Methodology for arriving at “Best Price”
Bank will give 70% weightage to technical score while comparing the commercial
quote.
The procedure is as under:
A ‟Score (S)” will be calculated for all qualified bidders using the following formula:
Where C stands for commercial price quoted, C Low stands for the price quote of the
lowest commercial bid. T stands for technical evaluation score and T High stands for the
score of the technically highest bidder. X is equal to 0.30.
Integrated Risk Management Department, The South Indian Bank Limited. Page 43
Sl.
No Bidder
Technical
Evaluation
Marks(T)
Commercial
Bid Price in
lakhs ( C)
(C low/C)x0.30 (T/T-high)x
0.70
Score
(S)
1 ABC 95 71 0.85*0.30=0.25 1.00*0.70=0.70 0.95
2 DEF 85 66 0.92*0.30=0.27 0.89*0.70=0.63 0.90
3 GHI 80 60 1*0.30=0.30 0.84*0.70=0.59 0.89
In the above example, ABC has scored highest score and hence the price quoted by ABC
will be called “Best Price”. The bank may at its sole discretion call the bidders who score
highest combined score for negotiation. The bank has the right to restrict the number of
bidders and just because of scoring the cut off does not confer any right to be called for
negotiation.
10. AWARD OF CONTRACT
A. Notification of Acceptance of Bid
Before the expiry of the period of validity of the proposal, The South Indian Bank
Limited shall notify the successful bidder in writing by registered letter or by fax or by
hand-delivery or by email, that its bid has been selected. The bidder shall acknowledge in
writing receipt of the notification of selection and has to convey his absolute,
unconditional and unqualified acceptance and thereafter enter into agreement / Contract
within 15 days from the date on which selection is notified to bidder. The proposed
format is given in Annexure-10
B. Project management:
The Bank and the bidder consultant will nominate a Project Manager each immediately
on acceptance of the order, who will be the single point of contact for the project.
The selected bidder cannot change the Project Manager or any other members of the
team/s during the entire period of execution of the consultancy project unless consented
in writing by the Bank. In the eventuality of any such change the personnel brought in
should have equivalent or more exposure and qualifications compared to the personnel
replaced and it should be with the Bank‟s concurrence.
The selected bidder shall ensure that personnel deployed are competent, do not violate
any of the contractual obligations under this contract and while on the premises of the
Bank conduct them in a dignified manner & shall not behave in any objectionable
manner
C. Signing of contract
Acceptance of selection shall be followed by signing of the Contract. However selection
Integrated Risk Management Department, The South Indian Bank Limited. Page 44
committee may negotiate certain terms & conditions with successful bidder and obtain
necessary approvals from higher authorities, before signing of the Contract. The Bidders
should sign the Agreement Form. A specimen of contract proposed to be executed is
given in Annexure 7. Besides, the successful vendor should also sign a non-disclosure
agreement in the format specified in Annexure-9. The signing of Contract will amount
to award of contract and Bidder will initiate the execution of the work as specified in the
Contract. The signing of contract shall be completed within 30 days of receipt of
notification of the acceptance of bid. Annexure 7 and 9 may be modified if deems fit by
the bank.
D. PERFORMANCE BANK GUARANTEE
a. The successful bidder shall submit a Performance Guarantee issued by a Scheduled
Commercial Bank in favour of The South Indian bank Limited as per the format given
in Annexure -8 for 100 % value of the contract in Indian Rupees along with the letter of
acceptance of the assignment.
b. The guarantee period shall be valid for 3 year from the date of signing the contract. If
the scope of work specified in this RFP is not completed within 3 years the tenure of
guarantee shall be extended further.
c. The Bank guarantee will be returned to the selected bidder after the selected bidder‟s
performance obligations under the agreement are completed and accepted by the Bank.
d. The selected bidder shall be responsible for extending the validity date of the Bank
guarantees as and when it is due, on account of incompletion of the project.
e. The Bank shall invoke the Bank guarantee before the expiry of validity, if work is not
completed / the guarantee is not extended before the due date as the case may be, or if
the selected bidder fails to complete his obligations under the contract or the bidder
becomes insolvent or goes into liquidation voluntarily or otherwise. The Bank shall
notify the selected bidder in writing before invoking the Bank guarantee. The proceeds of
the guarantee shall be payable to the Bank for any loss arising from the selected Bidder‟s
failure to complete his obligations under the contract.
E. TIME PERIOD FOR COMPLETION OF ASSIGNMENT
The Successful Bidder/Consultant will be expected to assist the Bank in successful
implementation of project including UAT of the software solution and calculation of the
CRAR in accordance with advanced approaches of the Basel II with in a period of
30 months. This period does not take into account time involved in getting approval
from RBI. However it is expected that all other tasks including placing of application
before RBI would be completed within the abovementioned time frame
The contract will be for a period till approval for migration to Advanced IRB, IMA
and AMA is given by Reserve Bank of India
The Consultant should also assist the Bank in finalization of the application for filing
with the regulator and responding to RBI queries and comments on the application for
Integrated Risk Management Department, The South Indian Bank Limited. Page 45
migration to advanced approaches and making suitable changes to the Basel II
implementation (if necessary).
The Bank, at its option may extend the timeframe, depending on its requirements. Any
new guidelines given by RBI and Basel with regard to advanced approaches will
automatically form a part of the contract
The successful Bidder/Consultant shall complete the project / perform and render the
Services within the agreed time frame starting from the date of award of
Contract/Agreement.
F. DELAY IN ADHERING TO THE PROJECT TIMELINES
The Successful Bidder/Consultant must strictly adhere to the time schedule, as specified
in the Contract, executed between the bank and the Consultant, pursuant hereto, for
performance of the obligations arising out of the contract and any delay will enable the
Bank to resort to any or all of the following at sole discretion of the bank.
(a) Penalty;
(b) Termination of the agreement fully or partly
If there is any delay in the implementation of the project due to bidder /consultant‟s
fault in complying with time schedule furnished by the bidder/ consultant and accepted
by the Bank, it will recover 1% on the total consultancy fees paid to the bidder
consultant for each week of delay. This recovery will be subject to an upper limit of
10%. Thereafter the order/contract may be cancelled and amount paid if any, may be
recovered with 1.25% interest per month. Any deviations from the norms would be
treated as breach of the contract by the consultant and will be dealt with accordingly.
The Bank also reserves its right to claim damages for improper or incomplete execution
of the assignment.
G. Expected standards of performance
The Consultant/Bidder shall perform the service(s) and carry out its obligations under
the Contract with due diligence, efficiency and economy, in accordance with generally
accepted techniques and practices which are currently used in industry. It shall employ
appropriate advanced technology, procedures and methods. The Consultant/Bidder shall
always act, in respect of any matter relating to the Contract, as faithful advisors to The
South Indian Bank Limited and shall, at all times, support and safeguard The South
Indian Bank Limited's legitimate interests in any dealing with third parties.
Consultant must provide professional, objective and impartial advice at all times and
hold the Bank‟s interest paramount, without any consideration for future work, and
strictly avoid conflicts with other assignments or their own corporate interests.
Integrated Risk Management Department, The South Indian Bank Limited. Page 46
H. Use of Contract Documents & Information
The Bidder/Consultant shall treat all documents, information, data and communication
of and with The South Indian Bank Limited as privileged and confidential and shall be
bound by the terms and conditions of the Non-Disclosure Agreement. The
Bidder/Consultant shall execute the Non-Disclosure Agreement simultaneously at the
time of execution of the Contract.
The Bidder/Consultant shall not, without The South Indian Bank Limited‟s prior written
consent, disclose the Contract, or any provision thereof, or any specification, plan,
sample or information or data or drawings / designs furnished by or on behalf of The
South Indian Bank Limited in connection therewith, to any person other than a person
employed by the Bidder/ Consultant in the performance of the Contract.
Any document in any form it has been obtained, other than the Contract itself,
enumerated in this Bid Documents shall remain the property of The South Indian Bank
Limited and shall be returned (in all copies) to Bidder / Consultant on completion of the
Bidder's/Consultant's performance under and in accordance with the Contract, if so
required by The South Indian Bank Limited.
I. „NO CLAIM‟ Certificate
The consultant shall not be entitled to make any claim, whatsoever, against The South
Indian Bank Limited, under or by virtue of or arising out of, the Contract/Agreement,
nor shall The South Indian Bank Limited entertain or consider any such claim, if made
by the Consultant after he has signed a „No Claim‟ Certificate in favor of The South
Indian Bank Limited in such forms as shall be required by The South Indian Bank
Limited after the works are finally accepted.
J. Conditions precedent to contract
The Contract is subject to the fulfillment of the following conditions precedent by the
Consultant:-
a) Obtaining of all statutory, regulatory and other permissions, approvals, consents and
no-objections required under applicable laws or RBI for the performance of the
service(s) under and in accordance with the Contract.
b) Furnishing of such other documents as The South Indian Bank Limited may specify.
K. CANCELLATION/ TERMINATION OF CONTRACT
The Bank reserves its right to cancel the order in the event of, but not limited to, one or
more of the following situations:
a) Unnecessary or unwarranted delay in execution of the work allotted.
b) Delay in providing the requisite manpower at the Bank‟s site.
c) Delay in submission of reports beyond the stipulated periods.
d) Change in the composition of staff as furnished in the bid
Integrated Risk Management Department, The South Indian Bank Limited. Page 47
e) Breach of trust is noticed during any stage of the consultancy assignment.
f) The selected bidder commits a breach of any of the terms and conditions of the bid.
g) The selected bidder goes in to liquidation voluntarily or otherwise.
h) If it is found at any stage that the bidder has concealed any important information or
has submitted any false information or declaration particularly regarding any pending
legal action or blacklisting status.
i) The Bank reserves the right to recover any dues payable by the selected bidder from
any amount outstanding to the credit of the selected bidder, including the pending
bills and security deposit, if any, under this contract or any other contract/order.
j) The decision of the bank as to whether or not any one or more of the above situation
has(have) arisen shall be final and binding on the vendor
In addition to the cancellation of order, The Bank reserves the right to appropriate the
damages from foreclosure of the Bank guarantee given by the consultant.
L. PUBLICITY
Any publicity by the bidder consultant in which the name of the Bank is to be used
should be done only with the explicit written permission of the Bank.
M. SUBCONTRACTING
The Bidder will not subcontract or delegate or permit anyone other than the Bidder
personnel to perform any of the work, service or other performance required of the
Bidder under this agreement without the prior written consent of the Bank and the bank‟s
decision in this regard will be final and acceptable to the bidder.
N. Payment Terms:
Payment will be released by the Bank after deduction of applicable taxes at source of the
agreed professional fees to the Consultant (for which contract will be executed) in stages
on completion of the activities to the satisfaction of the Bank as per the phases defined in
the scope of services under the RFP. No advance payment will be made. The schedule of
payments is given in Para 11 of this RFP
The release of payments and retention money will be further subject to the following
conditions.
a) The consultant should delegate all the scope into deliverables.
b) All the deliverables as mentioned under „Scope of services under the RFP‟ should be
covered phase-wise.
c) Any tasks/ services, which is outside the „Scope of services under the RFP‟ and required
for successful completion of the project, are performed to the satisfaction of the Bank
d) The documents, reports and drafts submitted by the consultant should comply with Basel
II and RBI guidelines and are subject to acceptance by the Bank.
Integrated Risk Management Department, The South Indian Bank Limited. Page 48
e) The bidder cannot change the Project Manager during the entire period of execution of
project unless consented by the Bank in writing by the Bank.
O. TAXES AND DUTIES:
a) The Successful Bidder/Consultant will be entirely responsible to pay all taxes whatsoever
in connection with delivery of the services at the sites including incidental services and
commissioning.
b) Wherever the laws and regulations require deduction of such taxes at the source of
payment, Bank shall effect such deductions from the payment due to the Consultant. The
remittance of amount so deducted and issue of certificate for such deductions shall be
made by Bank as per the laws and regulations in force.
c) Nothing in the contract shall relieve the Consultant from his responsibility to pay any tax
that may be levied in India/abroad on income and profits made by the Consultant in
respect of this contract.
P. AUTHORIZED SIGNATORY
The selected bidder shall indicate the authorized signatories who can discuss and
correspond with BANK, with regard to the obligations under the contract. The selected
bidder shall submit at the time of signing the contract a certified copy of the resolution of
their board authenticated by the company secretary or a letter duly signed by the
managing partner of the firm, authorizing an official or officials of the bidder to discuss,
sign agreements/contracts with BANK, raise invoice and accept payments and also to
correspond. The bidder shall provide proof of signature identification for the above
purposes as required by BANK. The format for nominating the authorized signatory is
furnished in Annexure-11
Q. RESOLUTION OF DISPUTES:
The Bank and the bidder shall make every effort to resolve amicably, by direct informal
negotiation, any disagreement or dispute arising between them under or in connection
with the contract. If after thirty days from the commencement of such informal
negotiations, The South Indian Bank Limited and the bidder are unable to resolve
amicably a contract dispute; either party may require that the dispute be referred for
resolution by formal arbitration.
All questions, disputes or differences arising under and out of, or in connection with the
contract, shall be referred to two Arbitrators: one Arbitrator to be nominated by the Bank
and the other to be nominated by the Bidder. In the case of the said Arbitrators not
agreeing, then the matter will be referred to an umpire to be appointed by the Arbitrators
in writing before proceeding with the reference. The award of the Arbitrators, and in the
event of their not agreeing, the award of the Umpire appointed by them shall be final and
binding on the parties. The Arbitration and Conciliation Act 1996 shall apply to the
arbitration proceedings and the venue & jurisdiction of the arbitration shall be Thrissur.
Integrated Risk Management Department, The South Indian Bank Limited. Page 49
The cost of arbitration (except the cost & fees of Advocates) shall be borne by each party
in equal proportion. The cost of the advocates shall be borne by respective party
appointing the Advocates.
11. TERMS OF PAYMENT
The payment shall be released in accordance with table given below
Type of risk
Total Particulars of tasks to be
performed Credit Operational Market
Preparatory tasks to be performed
prior to implementation 3% 3% 2% 8%
Implementation(including RFP for
software selection & system
integrator)
6% 6% 3% 15%
Training 2% 2% 2% 6%
Parallel run 5% 5% 5% 15%
RBI application 6% 5% 5% 16%
RBI approval 10% 10% 10% 30%
ALM, FTP and Basel III 5%
Retention money(to be released
after one year from the date of
receipt of approval from RBI) 5%
Total 32 31 27 100
12. PROPOSED TIME SCHEDULE FOR COMPLETION OF ASSIGNMENT
* Month 1 refers to the month in which contract is signed
Work stream/Phase Timelines
Start End
Preparatory tasks to be performed prior to
implementation of IRB
Basel II Diagnostic Study & Data Gap Analysis
for Credit Risk
Validation of existing models and development
of validation framework
Setting up of Credit Risk Control Unit
Month 1* Month 6
Implementation of IRB
Pillar 2 - ICAAP Development &
Implementation
Retail Pooling
Estimation of PD, LGD and EAD for non-retail
exposures
Month 7 Month 12
Integrated Risk Management Department, The South Indian Bank Limited. Page 50
Review of Parallel run (capital charge under IRB in
comparison with standardized approach) Month 13 Month 18
Assistance in preparing application for approval from
RBI Month 19 Month 21
Preparatory tasks to be performed prior to
implementation of IMA Month 4 Month 6
Implementation of Enterprise wide risk management
architecture for complying with IMA Approach Month 7 Month 15
Review of Parallel run (capital charge under IMA in
comparison with standardized approach) Month 16 Month 21
Gap Analysis & ORM Governance Month 4 Month 6
Classification of business lines under TSA Month 7 Month 8
Preparatory tasks to be performed prior to
implementation of AMA
Risk & Control Self Assessments
Development of Loss event management
framework
Development of KRI framework
Month 9 Month 15
Methodology and framework for quantifying
operational risk under AMA Month 16 Month 18
Internal Audit Convergence, new product/process
approval and Use test approaches/ Validations for
complying with AMA Month 19 Month 20
Review the results of Parallel run under AMA Month 19 Month 24
Assistance in preparing application for approval for
AMA and obtaining Approval from RBI Month 22 Month 24
Basel III, ALM and FTP Month 13 Month 18
Preparation of RFP document for selection of vendor for
supply of hardware and software required for
implementation
Month 7 Month 12
The above time frame does not take into account time taken for obtaining approval. As
indicated in this RFP, the consultant is bound to provide his assistance in getting
approval, in spite of the duration of delay in getting approval. The bank may prior to the
date of signing contract, alter the time frame specified above after obtaining the consent
of the selected bidder.
13. GENERAL TERMS AND CONDITIONS
Consultant should compulsorily respond to any clarification (technical, functional,
commercial) letter/E-mail sent by the bank.
Integrated Risk Management Department, The South Indian Bank Limited. Page 51
The assignment shall be completed within the specified time frame agreed upon in the
contract/ proposal/ bid or two years, whichever is shorter.
The South Indian Bank Limited reserves the right to open the quotations soon after their
receipt from all the Consultants without waiting till the last date specified.
Continuity of project team members of Consultancy should be ensured during the period
of project.
Bid should necessarily include the particulars prescribed in Annexure-1. Bids not
containing these particulars will be rejected.
Presence of any incomplete or ambiguous terms/ conditions/ quotes will disqualify the
offer.
The Bank reserves the right to cancel the contract entered with the selected Consultant if
the Consultant commits a breach of any of the terms and conditions of the bid.
The South Indian Bank Limited is not responsible for non-receipt of quotations within the
specified date and time due to any reason including postal holidays, or other types of
delays.
The South Indian Bank Limited is not bound to place the order from the lowest price
bidder or the most competent consultant.
Consultant shall share its technology strategies and research & development efforts,
conducted in the course of this assignment with The South Indian Bank Limited.
All inquiries, communications and requests for clarification shall be submitted in Hard
copies/e-mail to The South Indian Bank Limited and response for the same shall be
obtained in writing. Only such documents shall be considered as authoritative.
Successful consultant shall be responsible for compliance with all requirements under the
laws and shall protect and indemnify completely The South Indian Bank Limited from
any claims /penalties arising out of any infringements.
All intellectual property related to the project shall be the property of The South Indian
Bank Limited and The South Indian Bank Limited reserves the right from its sole
discretion to implement the same at other centers in future with/without involving
successful consultant.
Consultant should ensure that all points in the RFP document are taken into account
before submitting the Bid Documents.
Consultant should have implemented similar assignment and necessary verifiable
references in this effect should be submitted with the proposal.
Consultants are bound to make full disclosure of information required to judge them on
the basis of selection criteria specified in Point No.8 and Point No.9
14. LITIGATION
If it comes to the notice of the Bank that the consultant has suppressed any information
either intentionally or otherwise, or furnished misleading or inaccurate information, the
Bank reserves the right to disqualify the consultant. If such information comes to the
knowledge of the Bank after the award of work, The South Indian Bank Limited reserves
the right to terminate the Contract unilaterally at the total cost and risk of the consultant.
Integrated Risk Management Department, The South Indian Bank Limited. Page 52
The Bank also reserves the right to recover any dues payable by the selected consultant
from any amount outstanding to his credit, including the pending bills etc., if any. The
Bank will also reserve the right to recover any Advance paid.
Governing Law: - The Contract/Agreement shall be governed in accordance with the
laws of Republic of India. These provisions shall survive the Contract/Agreement.
Jurisdiction of Courts:-The courts of India at Thrissur have exclusive jurisdiction to
determine any proceeding in relation to the Contract/Agreement. These provisions shall
survive the Contract/Agreement.
Work under the Contract shall be continued by the selected consultant during the
arbitration proceedings unless otherwise directed in writing by the Bank unless the matter
is such that the works cannot possibly be continued until the decision of the arbitrator or
of the umpire, as the case may be, is obtained. Except as those which are otherwise
explicitly provided in the Contract/this document, no payment due or payable by the
Bank, to the Consultant shall be withheld on account of the ongoing arbitration
proceedings, if any, unless it is the subject matter or one of the subject matter thereof.
The venue of the arbitration shall be at Thrissur, Kerala State, India.
15. INFORMATION SECURITY
a. The consultant/Bidder and its personnel shall not carry any written material, layout,
diagrams, floppy diskettes, hard disk, storage tapes or any other media out of The South
Indian Bank Limited‟ s premises without written permission from The South Indian Bank
Limited.
b. The consultant / Bidder shall acknowledges that The South Indian Bank Limited‟s
business data and other proprietary information or materials, whether developed by The
South Indian Bank Limited or being used by The South Indian Bank Limited pursuant to
a license agreement with a third party (the foregoing collectively referred to herein as
“proprietary information”) are confidential and proprietary to The South Indian Bank
Limited; and the consultant / Bidder shall agrees to use reasonable care to safeguard the
proprietary information and to prevent the unauthorized use or disclosure thereof.The
caution exercised by the consultant shall not be less than that used by consultant / Bidder
to protect its own proprietary information. The Consultant / Bidder recognizes that the
goodwill of The South Indian Bank Limited depends, among other things, upon
consultant / Bidder keeping such proprietary information confidential and that
unauthorized disclosure of the same by consultant / Bidder could damage The South
Indian Bank Limited. Consultant / Bidder shall use such information only for the purpose
of rendering the Service(s) to The South Indian Bank Limited.
c. The consultant / Bidder‟s personnel shall follow The South Indian Bank Limited‟s
Information System security policy and instructions in this behalf.
d. The consultant / Bidder shall, upon termination of the Contract/Agreement for any
reason, or upon demand by The South Indian Bank Limited, whichever is earliest, return
any and all information provided to consultant / Bidder by The South Indian Bank
Limited, including any copies or reproductions, both hardcopy and electronic.
Integrated Risk Management Department, The South Indian Bank Limited. Page 53
Annexure-1
Particulars to be furnished in the bid/ proposal
Name of the organization
Office Address
Email Address
Contact Person with telephone number
Constitution of the organization
Income Tax / PAN Details/Service Tax Reg.No, if any
Registered / Corporate Office Location
Business Lines and Brief Description
Curriculum Vitae of Key project team members
Total cost of assignment in INR. The total cost should be clearly bifurcated into out of
pocket expenses and fee
All other details required to judge the bidder based on the criteria specified in Point 8 and
Point 9.
Scope of the assignment
Period of validity of the bid/proposal
Detailed work schedule which specify the work to be completed in each month.
Methodology/approach for providing services to the bank with respect to the scope of
consultancy work as specified in the format given in Annexure-5
Any other important point, whether consultant would like to mention
The undertaking in the format specified in Annexure-4
Name and designation of the person authorized to make commitments to The South
Indian Bank Limited
Requirements from the Bank for implementing the assignment. This should include the
details of the manpower required from the Bank to implement the framework in terms of
the RFP.
A realistic time schedule for implementation of the assignment whose scope is described
in this RFP. Kindly note that this time schedule will form part of contract proposed to be
entered with bank.
DECLARATION in the format given below.
„We hereby declare that the information submitted above is complete in all respects and
true to the best of our knowledge. We understand that in case any discrepancy or
inconsistency or incompleteness is found in the information submitted by us, our
application is liable to be rejected
Authorised Signatory‟
Integrated Risk Management Department, The South Indian Bank Limited. Page 54
Annexure 2
Format for furnishing the profile of the consulting
Project Manager, team leader and members:
(On organizations‟ letter head)
1. Name:
2. Designation:
3. Professional Qualifications:
4. Period and nature of experience with the consulting (bidding) organization:
5. Period and nature of experience with other organizations:
6. IT Expertise in terms of years and areas of expertise:
7. Details of projects handled / consultancy services rendered with details of client, representing
which organization, as member of the team or team leader or project leader etc:
Note: The detailed CV to be submitted along with the Technical Bid including at the minimum
above mentioned details.
The abovementioned details of the team members who is expected to work under the following
areas should be given separately.-
1. Credit risk
2. Operational risk
3. Market risk
4. Pillar-II- ICAAP Development and implementation
5. Basel-III
6. ALM
7. FTP
8. Selection of systems(software and hardware), customization and UAT
Authorised Signatory
Integrated Risk Management Department, The South Indian Bank Limited. Page 55
Annexure-3
Forwarding Letter Format
(On organization‟s letter head)
Bid Reference No. : Date:
The Chief General Manager
The South Indian Bank Ltd
Integrated Risk Management Department,
SIB House, Head Office,
2nd Floor, Mission Quarters
Thrissur , Kerala,
India – 680001
Dear Sir,
Subject: Consultancy for Implementation of Advanced Approaches of Basel-II,
Achieving compliance with Basel III norms and Refinement of FTP & ALM in line with RBI &
International Best Practices in an Enterprise wide Integrated Risk Management System
In respect of the providing consultancy support on Implementation of Advanced Approaches of
Basel-II, Achieving compliance with Basel III norms and Refinement of FTP & ALM in line with
RBI & International Best Practices in an Enterprise wide Integrated Risk Management System
meant for The South Indian Bank, please find enclosed our response to your RFP dated
15.06.2013
We agree and undertake that if our bid is accepted, we shall provide the Services comprised in
the Contract within timeframe specified, starting from the date of receipt of notification of award
from The South Indian Bank Limited.
We confirm that we have noted the contents of the RFP, we have not made any modification in
the original copy of RFP, have ensured that there is no deviation in filing our response to the
RFP and are aware that the Bank will have the right to disqualify us in case of any such
modifications or deviations.
We agree and undertake to abide by the RFP terms and conditions, provisions, stipulations and
covenants including the price quoted therein for the period of 90 days from the bid closing date
and it shall remain binding upon us and may be accepted at any time before the expiration of that
period.
All the details mentioned by us are true and correct and if Bank observes any misrepresentation
of facts on any matter at any stage, Bank has the absolute right to reject the bid / proposal and
disqualify us from the selection process.
We agree and undertake to execute a Consultancy Agreement and Non Disclosure Agreement in
the form to be communicated by The South Indian Bank, incorporating all agreements with such
alterations or additions thereto as may be necessary to adapt such agreement to the circumstances
Integrated Risk Management Department, The South Indian Bank Limited. Page 56
of the standard and notice of the award within time prescribed after notification of your intention
to accept this proposal.
Unless and until a formal Consultancy Agreement is prepared, finalized and executed this bid
together with the entire set of documents, technical presentations and the written acceptance
thereof by The South Indian Bank, shall constitute a binding Agreement between The South
Indian Bank and us.
We understand that you are not bound to accept the lowest or any bid that you may receive; not
to give any reason for rejection of any bid and that you will not defray any expenses incurred by
us in biding.
We are also aware that The South Indian Bank has also right to re-issue / recommence the bid, to
which we do not have right to object and have no reservation in this regard; the decision of The
South Indian Bank in this regard shall be final, conclusive and binding upon us.
We enclose a Demand Draft /Bankers' Cheque bearing No……………. dated ……/ …../20
drawn by ……….. Bank, branch, in favour of The South Indian Bank, payable at Thrissur for a
sum of Rs10,000/.(Rupees Ten Thousand. only) towards non-refundable Bid document price
The entire set of RFP documents together with The South Indian Bank‟s acceptance of
expression of interest, etc. are enclosed hereto and form the part of this Bid.
Dated this _____ day of ____________________ 2013 at
Signature
(Seal)
In the capacity of ……………………………..
Duly authorized to sign bids for and on behalf of:
Integrated Risk Management Department, The South Indian Bank Limited. Page 57
Annexure 4
Undertaking Format
(On organization‟s letter head)
1. This is to certify that the information furnished here in and as per the document submitted is
true and accurate and nothing has been concealed or tampered with. We have gone through
all the conditions of RFP document and is liable to any punitive action for furnishing false
information / documents.
2. We (and our employees) shall not, unless Bank gives permission in writing, disclose any
part or whole of this RFP document or any addition or amendments thereof, of the proposal,
and / or contract, or any specification, plan, drawing, pattern, sample or information
furnished by the Bank (including the users), in connection therewith to any person other than
a person employed by the bidder in the performance of the proposal and/or contract.
Disclosure to any such employed person shall be made in confidence and shall extend only
as far as may be necessary for purposes of such performance. The employees or the third
party engaged by us will maintain strict confidentiality.
3. We (and our employees and agents) shall not without prior written consent from the Bank
make any use of any document or information given by the user, except for purposes of
performing the contract award. In case of breach, the Bank shall take such legal action as
deemed fit.
4. We hereby declare that no inquiries or investigations have been threatened, commenced or
pending against by any statutory or regulatory or investigative agencies or lending
institutions.
5. We undertake that in competing for and if the award is made to us, in executing the subject
Contract, we will strictly observe the laws against fraud and corruption in force in India
namely “Prevention of Corruption Act 1988”.
Dated this _____ day of ____________________ 20
Signature
(Company Seal)
In the capacity of
Duly authorized to sign bids for and on behalf of
Integrated Risk Management Department, The South Indian Bank Limited. Page 58
Annexure-5
Bidder‟s proposed methodology / approach for providing services to the Bank with respect
to the scope of consultancy work:
(A) Proposed methodology / approach on the following areas:
(B) Credit risk
(C) Operational risk
(D) Market risk
(E) Pillar-II- ICAAP Development and implementation
(F) Basel-III
(G) ALM
(H) FTP
(I) Selection of systems(software and hardware), customization and UAT
(J) Details of deliverables, other than the deliverables specified by the bank, proposed by the
bidder with specific reference to the scope of work:
Place :
Date: SEAL (Authorized Signatory)
Integrated Risk Management Department, The South Indian Bank Limited. Page 59
Annexure-6
Commercial Bid
(To be included in Commercial Proposal Envelope)
Date: ..............................
Sir,
In terms of the above-mentioned RFP document we submit herewith the commercial bid (fees)
for the assignment proposed by the Bank as Consultant. (Commercial bid should be divided for
each area of work and phase-wise separately)
Area of
Work Phase Description
Estimated
Effort
(In man days)
Cost(Rs)
Credit
Risk
Phase I Preparatory tasks to be performed
prior to implementation of IRB
Phase II
Implementation of Enterprise wide
risk management architecture for
complying with IRB Approach
Phase III Review the results
of Parallel run
Phase IV
Assistance in preparing application
for approval and obtaining
Approval from RBI
Market
Risk
Phase I Preparatory tasks to be performed
prior to implementation of IMA
Phase II
Implementation of Enterprise wide
risk management architecture for
complying with IMA Approach
Phase III Review the results
of Parallel run
Phase IV
Assistance in preparing application
for approval and obtaining
Approval from RBI
Operational
Risk
Phase I Preparatory tasks to be performed
prior to implementation of AMA
Phase II
Implementation of Enterprise wide
risk management architecture for
complying with AMA Approach
Phase-III Review the results
of Parallel run
Phase IV
Assistance in preparing application
for approval and obtaining
Approval from RBI
Integrated Risk Management Department, The South Indian Bank Limited. Page 60
Basel III Phase I Achieving compliance with the
Basel III guidelines of RBI
ALM
&
FTP
Phase I
Refinement of FTP & ALM in line
with RBI & International Best
Practices in an Enterprise wide
Integrated Risk Management
System
Sub Total
Out of Pocket expenses
Service Tax @ Applicable rates
TOTAL COST
TERMS AND CONDITIONS
The above quoted fee is for all the work streams (areas of work) and phases.
The fee quoted includes the cost of all the deliverables in the scope of work in the RFP.
The Bank will deduct applicable TDS, while releasing payment, applicable as per the law.
Some of the activities mentioned above can be taken up by the selected bidders
simultaneously for completion of the assignment in time.
Bid Cost should be on absolute basis and not on the basis of man-days
The total cost should include all nature of expenses including out of the pocket expenses.
We confirm that we will abide by all the terms and conditions mentioned in the RFP.
Dated this...................... day of ............................ 2013.
________________ _____________________________
(Signature) (in the capacity of)
Duly authorized to sign Proposal for and on behalf of _______________________
Integrated Risk Management Department, The South Indian Bank Limited. Page 61
Annexure-7
Agreement Form
THIS AGREEMENT (the Agreement) made at…………………the………day of
……………………. 2013.
BETWEEN
The South Indian Bank Limited a company registered under the Companies Act, 1956 (1
of1956) and a banking company within the meaning of SECTION 5(c) of the Banking Regulation
Act, 1949 (10 of 1949) and having its registered office at The South Indian Bank Limited,
SIB House, Mission Quarters, Thrissur – 680 001 (hereinafter called “The South Indian Bank
Limited / Purchaser ” which expression shall unless it be repugnant to the subject, context or
meaning thereof shall be deemed to mean and include its successors and assigns) of the ONE
PART
AND
……………. (Name of successful Bidder / Consultant) of …………………… (Please specify the
registered office of the (Consultant) (hereinafter called “the Consultant which expression shall
unless it be repugnant to the subject, context or meaning thereof shall be deemed to mean and
include its successors) of the OTHER PART.
The Purchaser and Consultant are hereinafter collectively referred to as "Parties".
WHEREAS the Purchaser invited bids for certain Services namely „Consultancy Service for
Implementation of Advanced Approaches of Basel-II,
Achieving compliance with Basel III norms and Refinement of FTP & ALM in line with
RBI & International Best Practices in an Enterprise wide Integrated Risk Management
System‟ and has accepted a bid by the Consultant for rendering of the Services for the sum of
………………………( Contract Price in Words and Figures) (hereinafter called “the Contract
Price”).
NOW THIS AGREEEMENT WITNESSETH AND IT IS HEREBY AGREED BY AND
BETWEEN THE PARTIES HERETO AS FOLLOWS
In consideration of the payments to be made by the South Indian Bank Limited to the Consultant
as hereinabove mentioned, the Consultant hereby agrees with the Purchaser to provide / render the
Services, to furnish necessary undertakings, etc. as mentioned in the RFP document / the said
documents, strictly in conformity in all respects with the provisions of the said documents
(1) In this Agreement words and expressions shall have the same meanings as are respectively
assigned to them in the terms and conditions of RFP / Contract / Agreement referred to.
Integrated Risk Management Department, The South Indian Bank Limited. Page 62
(2) The RFP Document titled_________________________ shall be deemed to form and be
read and construed as part of this Agreement, which, inter alia, includes
a. Scope of Work
b. Objective of RFP document
c. Eligibility Criteria
d. General terms and conditions
e. Invitation of bids
f. Payment terms
(All the above are collectively referred to as "the said documents")
(3) The Purchaser hereby agrees and covenants to pay the Consultant in consideration of the
rendering of the Services and the remedying of defects, if any therein, etc., the Contract price
or such other sum as may become payable under the provisions of the said documents at the
times and in the manner prescribed by the said documents
(4) The Consultant shall provide the services and other incidental documents / records as per the
scope of the service / work as contained in the RFP documents / the said documents
(5) All applicable taxes shall be deducted by the South Indian Bank Limited at source according
to the tax rate prevalent at the time of making payment.
(6) The Contract price quoted by the consultant in RFP document shall be finalized and
inclusive of all duties, service tax ,levies, other taxes, traveling expenses , lodging /boarding,
local conveyance or any other expenses of whatsoever nature for the said service.
(7) In order to induce The South Indian Bank Limited to enter into the Contract/Agreement, the
Consultant hereby make following representations
a. It is duly organized and validly existing organization under Indian Laws.
b. It has power and authority to execute and deliver this Agreement/Contract and has taken
all necessary steps to authorize execution, delivery and performance of this
Agreement/Contract
c. It has power and authority to do all things necessary and appropriate and to perform
Services contemplated under this Agreement/Contract
d. neither the execution and delivery by the Consultant of the Contract/Agreement nor the
Consultant's compliance with or performance of the terms and provisions of the
Contract/Agreement (i) will contravene any provision of any applicable law or any order,
writ, injunction or decree of any court or governmental authority binding on the
Consultant (ii) will conflict or be inconsistent with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under any
agreement, contract or instrument to which the Consultant is a party or by which it or any
Integrated Risk Management Department, The South Indian Bank Limited. Page 63
of its property or assets is bound or to which it may be subject or (iii) will violate any
provision of the Memorandum and Articles of Association/ partnership deed of the
Consultant
e. has made or shall make all necessary arrangement for performance of the services. In
case of failure on the part of Consultant to provide any part of services as mentioned The
South Indian Bank Limited has a right not to pay for such particular part of services
f. That the Consultant is a company/ partnership firm which has the requisite qualifications,
skills, experience and expertise to give service to third parties
g. That Consultant possesses the technical know-how, the financial wherewithal, the power
and the authority to enter into the Contract /Agreement.
h. That the Consultant is not involved in any litigation, potential, threatened and existing,
that may have an impact of affecting or compromising the performance of Service under
the Contract/Agreement. No inquiries or investigations have been threatened,
commenced or pending against the Consultant or its team members by any statutory or
regulatory or investigative agencies.
i. That the representations made by the Consultant in its bid are and shall continue to
remain true and fulfill all the requirements as are necessary for executing the duties,
obligations and responsibilities as laid down in the Contract/Agreement and the Bid
Documents and unless The South Indian Bank Limited specifies to the contrary, the
Consultant shall be bound by all the terms of the bid
j. That the Consultant has the professional skills, personnel and resources/authorizations
that are necessary for giving the Service or to perform its obligations under the bid and
this Contract/Agreement
k. That the execution of the Service herein is and shall be in accordance and in compliance
with all applicable laws
l. That all conditions precedent under the Contract/Agreement / bid document have been
complied.
m. That the Consultant certifies that all registrations, recordings, filings and notarizations of
the Contract/Agreement and all payments of any tax or duty, registration charges or
similar amounts which are required to be effected or made by the Consultant which is
necessary to ensure the legality, validity, enforceability or admissibility in evidence of the
Contract/Agreement have been made.
n. That the Consultant confirms that there has not and shall not occur any execution,
amendment or modification of any agreement/contract without the prior written consent
Integrated Risk Management Department, The South Indian Bank Limited. Page 64
of The South Indian Bank Limited , which may directly or indirectly have a bearing on
the Contract/Agreement
(8) Termination of Agreement /Contract
The South Indian Bank Limited may terminate this Agreement/Contract for any breach of the
terms and conditions of this Agreement/Contract / bid by giving 15 days notice to the
Consultant requiring it to make good the default(s) within notice period.
Termination of this Agreement/Contract shall not affect or prejudice any provisions of this
Agreement/Contract, which are expressly or by implication provided to continue in effect
after such termination
The South Indian Bank Limited may impose penalty, in case of delay of any deliverables at
the rate of 1% of the total Contract Price per week, or part thereof, of delay, subject to a
maximum of 10% of total Contract Price, for the delays attributable to Consultant. If the
delay exceeds six weeks, The South Indian Bank limited reserves the right to terminate the
services Agreement unconditionally and claim damages
(9) Notices
All notices in connection with this Agreement/Contract, shall be given in writing hand
delivered or sent by courier or by facsimile transmission, confirmed by courier to the address
or fax number specified below, or to such other address or number which the parties may
have last specified. All such notices shall be effective upon receipt to
The South Indian Bank Limited
SIB House
Mission Quarters,
Thrissur – 680 001 Fax No:-0487-2424551
Consultant,
Address
Either of the parties hereto may by notice change the address to which such notices and
communication are to be delivered or transmitted
(10) Compliance with RBI and other Regulatory Requirements
The Consultant shall individually obtain the necessary regulatory approvals from the RBI or
other regulatory bodies, if any required, for the Contract .Any demand for information
regarding any of the matters to the extent mutually agreeable under this Agreement called for
by the RBI or any other regulatory body shall be promptly responded to by the concerned
Party. The Consultant undertakes to comply all the statutory and regulatory requirements
under the applicable laws in connection with Service including Labour and Industrial Laws.
Integrated Risk Management Department, The South Indian Bank Limited. Page 65
(11) Governing Law
The provisions of this Agreement shall be governed by the laws of India and the competent
court at Thrissur shall have exclusive jurisdiction in relation thereto even though other Courts
in India may also have similar jurisdictions.
(12) Headings
The heading of various Articles and Sections herein are for convenience of reference and are
not deemed to affect the construction of the relative provisions
(13) Effective date and validity
This Agreement/Contract shall become binding on the parties on and from ____________. It
shall be in force until its termination or _____________________, whichever is earlier
(14) Force Majeure
If the performance as specified in this Contract/Agreement is prevented, restricted, delayed
or interfered by reason of: Fire, explosion, cyclone, floods, war, revolution, acts of public
enemies, blockage or embargo, any law, order, proclamation, ordinance demand or
requirements of any Government or authority or representative of any such Government or
regulations , strikes, shutdowns or labor disputes which are not instigated for the purpose of
avoiding obligations herein, then, notwithstanding anything here before contained, the party
affected shall be excused from its performance to the extent such performance relates to
prevention, restriction, delay or interference and provided the party so affected uses its best
efforts to remove such cause of non- performance and when removed the party shall continue
performance with utmost dispatch
If a Force Majeure situation arises, the Consultant shall promptly notify The South Indian
Bank Limited in writing of such conditions and the cause thereof. Unless otherwise directed
by The South Indian Bank Limited in writing, the Consultant shall continue to perform its
obligations under the Contract/Agreement as far as is reasonably practical and shall seek all
reasonable alternative means for performance not prevented by the Force Majeure event.
The South Indian Bank Limited may terminate the Contract/Agreement, by giving a written
notice of minimum 15 days to the Consultant, if as a result of Force Majeure the Consultant
is unable to perform a material portion of the work assigned to him for a period of more than
30 days.
Integrated Risk Management Department, The South Indian Bank Limited. Page 66
IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be executed on
the day, month and year first above written.
Signed and Delivered by
The within named
The South Indian Bank Limited/ Purchaser
Signature:
Name
Date: - ….......................
IN THE PRESENCE OF
1. Signature : 2. Signature :
Name : Name :
Address : Address :
Signed and Delivered by ......... .........................
the within named
Consultant
M/s. ..................................
.................................
Date :- .......................
IN THE PRESENCE OF :
1. Signature : 2. Signature :
Name : Name :
Address : Address :
Integrated Risk Management Department, The South Indian Bank Limited. Page 67
Annexure 8
Performance Bank Guarantee Format
Bank Guarantee No. :
Bank Guarantee Amount :
Expiry Date :
Claim Period :
Account :
GUARANTEE FOR PERFORMANCE OF CONTRACT/AGREEMENT
THIS GUARANTEE AGREEMENT executed at ________ day of_____________ Two
Thousand Thirteen
BY :
______________________ Bank, a body corporate constituted under _______________, having
its Registered Office/ Head Office at ______________, and a Branch Office
at_____________________________________________________ (hereinafter referred to as
“the Guarantor”, which expression shall, unless it be repugnant to the subject, meaning or
context thereof, be deemed to mean and include its successors and assigns)
IN FAVOUR OF:
The South Indian Bank Limited, a body corporate, established under the Companies Act 1956
and having its Registered Office at SIB House, Mission Quarters, Thrissur, Kerala – 680001
(hereinafter referred to as “Bank” which expression shall unless it be repugnant to the subject,
meaning or context thereof, be deemed to mean and include its successors and assigns),
WHEREAS Bank had called for the bids for engagement of Consultant who can provide
professional, objective and impartial advice on the domain of Integrated Risk Management and
procurement of the related software solution and for the purposes M/s………………………
have been appointed as the Consultant (hereinafter referred to as " Consultant") and accordingly
has entered into Contract / Agreement on ……….. (Agreement) with Bank subject to the terms
and conditions contained in the said documents and the Consultant has duly confirmed the same.
AND WHEREAS pursuant to the Bid Documents, the Agreement, and the other related
documents (hereinafter collectively referred to as “the said documents”, the Bank has agreed to
avail from M/s……………………. and M/s……………………………. has agreed to provide to
the Bank, the Services more particularly described in the the said documents (hereinafter
collectively referred to as “the Services”), subject to payment of the contract price as stated in
the said documents and also subject to the terms, conditions, covenants, provisions and
stipulations contained the said documents.
Integrated Risk Management Department, The South Indian Bank Limited. Page 68
AND WHEREAS the Consultant has duly signed the said documents.
AND WHEREAS in terms of the said documents, inter alia, the Consultant is required to procure
an unconditional and irrevocable performance Bank guarantee, in favour of the Bank, from a
Bank acceptable to the Bank for a sum of Rs…………………………………
(Rupess…………………………………………………….. Only) being 100% of the total
contract value for the faithful observance and performance by the Consultant of the terms,
conditions, covenants, stipulations, provisions of the Agreement /the said documents.
AND WHEREAS at the request of the Consultant, the Guarantor has agreed to issue the
guarantee in favour of the Bank for a sum of Rs. ………………………………
(Rupees………………………………………………..Only) being the 100% of the total Contract
value
AND WHEREAS at the request of the Consultant, the Guarantor has agreed to guarantee the
Bank that the Consultant shall faithfully observe and perform the terms of the said documents
NOW THEREFORE THIS AGREEMENT WITNESSETH AS FOLLOWS:
In consideration of the above premises, the Guarantor hereby unconditionally, absolutely and
irrevocably guarantees to the Bank as follows:
(1) The guarantor hereby agree and guarantee that the Consultant shall faithfully observe and
perform all the terms and conditions stipulated in the Contract/Agreement and the said
documents.
(2) The Guarantor hereby guarantees and undertakes to pay, on demand and without demur,
reservation, contest, recourse or protest or without any reference to the Consultant, to the Bank at
its office at Bangalore forthwith, and all monies payable by the Consultant to the extent of
Rs.………………………………………. against any loss, costs, damages, etc. suffered by the
Bank on account of default of the Consultant in the faithful observance and performance of the
terms, conditions, covenants, stipulations, provisions of the Agreement / said documents, without
any demur, reservation, contest, recourse or protest or without any reference to the Consultant.
Any such demand or claim made by the Bank, on the Guarantor shall be final, conclusive and
binding notwithstanding any difference or any dispute between the Bank and the Consultant or
any dispute between the Bank and the Consultant pending before any Court, Tribunal, Arbitrator,
or any other authority.
(3) The Guarantor agrees and undertakes not to revoke this Guarantee during the currency of
these presents, without the previous written consent of the Bank and further agrees that the
Guarantee herein contained shall continue to be enforceable until and unless it is discharged
earlier by the Bank, in writing.
(4) The Bank shall be the sole judge to decide whether the Consultant has failed to perform the
terms of the Agreement / said documents for providing the Services by the Consultant to the
Integrated Risk Management Department, The South Indian Bank Limited. Page 69
Bank, and on account of the said failure what amount has become payable by the Consultant to
the Bank under this Guarantee. The decision of the Bank in this behalf shall be final, conclusive
and binding on the Guarantor and the Guarantor shall not be entitled to demand the Bank to
establish its claim under this Guarantee but shall pay the sums demanded without any objection,
whatsoever.
(5) To give effect to this guarantee, the Guarantor will be deemed to be the Principal Debtor to
the Bank.
(6) The liability of the Guarantor, under this Guarantee shall not be affected by
(a) any change in the constitution or winding up of the Consultant or any absorption,
merger or
(b) amalgamation of the Consultant with any other company, corporation or concern; or
(c) any change in the management of the Consultant or takeover of the management of the
Consultant by the Government or by any other authority; or
(d) acquisition or rationalization of the Consultant and/or of any of its undertaking(s) pursuant to
any law; or
(e) any change in the constitution of Bank / Consultant; or
(f) any change in the set up of the Guarantor which may be by way of change in the constitution,
(g) winding up, voluntary or otherwise, absorption, merger or amalgamation or otherwise; or the
absence or deficiency of powers on the part of the Guarantor to give Guarantees and/or
Indemnities or any irregularity in the exercise of such powers.
(7) This Bank guarantee shall be valid for 3 year from the date of signing the contract.
(8) Notwithstanding anything contained in this Guarantee, the Guarantor hereby agrees and
undertakes to extend the validity period of this guarantee for a further period as may be requested
by the Bank, from time to time.
(9) This guarantee shall be binding upon us and successors -in - interest and shall be irrevocable.
(10) For all purposes connected with this Guarantee and in respect of all disputes and differences
under or in respect of these presents or arising there from the courts of Thrissur where the Bank
has its Registered Office shall alone have jurisdiction to the exclusion of all other courts.
(11) Notwithstanding anything contained herein above
I. Our liability under this Bank Guarantee shall not exceed Rs……………………………….
(Rupees ……………………….. only)
III. This Bank Guarantee shall be valid up to………………………….
Integrated Risk Management Department, The South Indian Bank Limited. Page 70
IV. We are liable to pay the guaranteed amount or any part thereof under this Bank Guarantee
only and only if you serve on us a written claim or demand on or
before ……………………………..…
IN WITNESS WHEREOF the Guarantor has caused these presents to be executed on the day,
month and year first herein above written as hereinafter appearing.
SIGNED AND DELIVERED BY
the within named Guarantor,
________________________________,
by the hand of Shri.____________________, its authorised official.
Integrated Risk Management Department, The South Indian Bank Limited. Page 71
Annexure-9
Non-Disclosure Agreement Form
This Non-Disclosure Agreement made and entered into at …………………. this…….day of
……………….. 2013
BY AND BETWEEN
………………………………… Company Limited, a company incorporated under the
Companies Act, 1956 having its registered office at ….………. (hereinafter referred to as the
Consultant, which expression unless repugnant to the context or meaning thereof be deemed to
include its permitted successors) of the ONE PART;
AND
The South Indian Bank Limited, a company registered under the Companies Act, 1956 and a
banking company within the meaning of the Banking Regulation Act, 1949 having its registered
office at SIB House, Mission Quarters, Thrissur, Kerala -680001 (hereinafter referred to as “The
South Indian Bank Limited” which expression shall unless repugnant to the context or meaning
thereof be deemed to include its successors and assigns) of the OTHER PART.
The Consultant and the South Indian Bank Limited are hereinafter collectively referred to as “the
Parties”and individually as “the Party”
WHEREAS:
1. The South Indian Bank Limited is engaged in banking business and intends to appoint a
consultant for implementing advanced approaches under Basel-II, for assisting in
compliance with Basel- III norms and refinement of ALM and FTP Gap Analysis, the scope
of which is specified in Point.4 of RFP Dt.15.06.2013. In the course of such assignment, it is
anticipated that The South Indian Bank Limited or any of its officers, employees, officials,
representatives or agents may disclose, or deliver, to the Consultant some Confidential
Information (as hereinafter defined), to enable the Consultant to carry out the aforesaid
exercise (hereinafter referred to as " the Purpose").
2. The Consultant is aware and confirms that the information, data and other documents made
available in the Agreement /Contract and thereafter regarding the services as furnished by
the Consultant in its RFP or otherwise.
3. The Consultant is aware that all the confidential information under the Bid documents / the
Agreement / Contract is privileged and strictly confidential and/ or proprietary to The South
Indian Bank Limited.
NOW, THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the above
premises and the The South Indian Bank Limited granting the Consultant and or his agents,
Integrated Risk Management Department, The South Indian Bank Limited. Page 72
representatives to have specific access to The South Indian Bank Limited property / information
and other data it is hereby agreed by and between the parties hereto as follows:
1. Confidential Information:
(i)“Confidential Information” means all information disclosed/furnished by The South Indian
Bank Limited to the Consultant whether orally, in writing or in electronic, magnetic or other
form for the limited purpose of enabling the Consultant to carry out the assignment, and shall
mean and include data, documents and information or any copy, abstract, extract, sample, note or
module thereof, explicitly designated as "Confidential"; Provided the oral information is set forth
in writing and marked"Confidential" within seven (7) days of such oral disclosure.
(ii) Information such as (i) intellectual property information; (ii) technical or business
information or material not covered in (i); (iii) proprietary or internal information relating to the
current, future and proposed products or services of the Parties including, financial information,
process/flow charts, business models, designs, drawings, data information related to products and
services, procurement requirements, purchasing, customers, investors, employees, business and
contractual relationships, business forecasts, business plans and strategies, information the
Parties provide regarding third parties; (iv) information disclosed pursuant to this Contract
including but not limited to Information Security policy and procedures , internal policies and
plans and Organization charts etc; and (v) all such other information which by its nature or the
circumstances of its disclosure is confidential
(iii) “Intellectual Property Rights” means any patent, copyright, trademark, trade name, design,
trade secret, permit, service marks, brands, propriety information, knowledge, technology,
licenses, databases, computer programs, software, know-how or other form of intellectual
property right, title, benefits or interest whether arising before or after the execution of this
Contract and the right to ownership and registration of these rights.
iv) The Consultant may use the Confidential Information solely for and in connection with the
Purpose and shall not use the Confidential Information or any part thereof for any reason other
than the Purpose stated above.
Confidential Information in oral form must be identified as confidential at the time of disclosure
and confirmed as such in writing within 15 days of such disclosure.
Confidential Information does not include information which:
(a) Is or subsequently becomes legally and publicly available without breach of this Agreement.
(b) was rightfully in the possession of the Consultant without any obligation of confidentiality
prior to receiving it from The South Indian Bank Limited, or prior to entering into contract, the
recipient shall have the burden of proving the source of information herein above mentioned and
are applicable to the information in the possession of the recipient.
Integrated Risk Management Department, The South Indian Bank Limited. Page 73
(c) was rightfully obtained by the Consultant from a source other than The South Indian Bank
Limited without any obligation of confidentiality,
(d) was developed by for the Consultant independently and without reference to any
Confidential Information and such independent development can be shown by documentary
evidence, or is/was disclosed pursuant to an order of a court or governmental agency as so
required by such order, provided that the Consultant shall, unless prohibited by law or regulation,
promptly notify The South Indian Bank Limited of such order and afford The South Indian Bank
Limited the opportunity to seek appropriate protective order relating to such disclosure.
(e) the recipient knew or had in its possession, prior to disclosure, without limitation on its
confidentiality;
(f) is released from confidentiality with the prior written consent of the other party.
The recipient shall have the burden of proving hereinabove are applicable to the information in
the possession of the recipient.
Confidential Information shall at all times remain the sole and exclusive property of the
disclosing party. Upon termination of this Agreement, Confidential information shall be returned
to the disclosing party or destroyed, if incapable of return. The destruction shall be witnessed and
so recorded, in writing, by an authorised representative of each of the parties. Nothing contained
herein shall in any manner impair or affect rights of The South Indian Bank Limited in respect of
the Confidential Information.
In the event that any of the Parties hereto becomes legally compelled to disclose any
Confidential Information, such Party shall give sufficient notice to the other party to enable the
other Party to prevent or minimize to the extent possible, such disclosure. Neither party shall
disclose to a third party any Confidential Information or the contents of this Agreement without
the prior written consent of the other party. The obligations of this Clause shall be satisfied by
handling Confidential Information with the same degree of care, which the receiving party
applies to its own similar confidential information but in no event less than reasonable care. The
obligations of this clause shall survive the expiration, cancellation or termination of this
Agreement
2. Non-disclosure:
The Consultant shall not commercially use or disclose any Confidential Information or any
materials derived there from to any other person or entity other than persons in the direct
employment of the Consultant who have a need to have access to and knowledge of the
Confidential Information solely for the Purpose authorized above. The Consultant shall take
appropriate measures by instruction and written agreement prior to disclosure to such employees
to assure against unauthorized use or disclosure. The Consultant agrees to notify The South
Indian Bank Limited immediately if it learns of any use or disclosure of the Confidential
Integrated Risk Management Department, The South Indian Bank Limited. Page 74
Information in violation of terms of this Agreement.
Notwithstanding the marking and identification requirements above, the following categories of
information shall be treated as Confidential Information under this Agreement irrespective of
whether it is marked or identified as confidential:
a) Information regarding The South Indian Bank Limited and any of its Affiliates, customers
and their accounts (“Customer Information”). For purposes of this Agreement, Affiliate means a
business entity now or hereafter controlled by, controlling or under common control. Control
exists when an entity owns or controls more than 50% of the outstanding shares or securities
representing the right
to vote for the election of directors or other managing authority of another entity; or
b) any aspect of The South Indian Bank Limited's business that is protected by patent,
copyright, trademark, trade secret or other similar intellectual property right; or
c) Business processes and procedures; or
d) Current and future business plans; or
e) Personnel information; or
f) Financial information.
g) Capital adequacy computation workings
3. Publications:
The Consultant shall not make news releases, public announcements, give interviews, issue or
publish advertisements or publicize in any other manner whatsoever in connection with this
Agreement, the contents / provisions thereof, other information relating to this Agreement,
including references whether through media, social network or otherwise, the Purpose, the
Confidential Information or other matter of this Agreement, without the prior written approval
Of The South Indian Bank Limited.
4. Term:
This Agreement shall be effective from the date hereof and shall continue till expiration of the
Purpose or termination of this Agreement by The South Indian Bank Limited, whichever is
earlier. The Consultant hereby agrees and undertakes to The South Indian Bank Limited that
immediately on termination of this Agreement it would forthwith cease using the Confidential
Information and further promptly return or destroy, under information to The South Indian Bank
Limited, all information received by it from The South Indian Bank Limited for the Purpose,
whether marked Confidential or otherwise, and whether in written, graphic or other tangible
form and all copies, abstracts, extracts, samples, notes or modules thereof. The Consultant
Integrated Risk Management Department, The South Indian Bank Limited. Page 75
further agrees and undertake to The South Indian Bank Limited to certify in writing upon request
of The South Indian Bank Limited that the obligations set forth in this Agreement have been
complied with.
Any provisions of this Agreement which by their nature extend beyond its termination shall
continue to be binding and applicable without limit in point in time except and until such
information enters the public domain. The Consultant agrees and undertake to treat Confidential
Information as confidential for a period of [five (5)] years from the date of receipt and in the
event of earlier termination of the Contract/Agreement, the Parties hereby agree to maintain the
confidentiality of the Confidential Information for a further period of [two (2)] years from the
date of such early termination.
5. Title and Proprietary Rights:
Notwithstanding the disclosure of any Confidential Information by The South Indian Bank
Limited to the Consultant, the title and all intellectual property and proprietary rights in the
Confidential Information shall remain with The South Indian Bank Limited.
6. Remedies:
The Consultant acknowledges the confidential nature of Confidential Information and that
damage could result to The South Indian Bank Limited if the Consultant breaches any provision
of this Agreement and agrees that, if it or any of its directors, officers or employees should
engage or cause or permit any other person to engage in any act in violation of any provision
hereof, The South Indian Bank Limited may suffer immediate irreparable loss for which
monetary compensation may not be adequate. The South Indian Bank Limited shall be entitled,
in addition to other remedies for damages & relief as may be available to it, to an injunction or
similar relief prohibiting the Consultant, its directors, officers etc. from engaging in any such act
which constitutes or results in breach of any of the covenants of this Agreement. Any claim for
relief to The South Indian Bank Limited shall include The South Indian Bank Limited‟s costs
and expenses of enforcement (including the attorney's fees).
7. Governing Law:
The provisions of this Agreement shall be governed by the laws of India and the competent court
at Thrissur shall have exclusive jurisdiction in relation thereto even though other Courts in India
may also have similar jurisdictions.
8. Indemnity:
The Consultant shall defend, indemnify and hold harmless The South Indian Bank Limited, its
affiliates, subsidiaries, successors, assignees, and their respective officers, directors and
employees, at all times, from and against any and all claims, demands, damages, assertions of
liability whether civil, criminal, tortuous or of any nature whatsoever, arising out of or pertaining
to or resulting from any breach of representations and warranties made by the Consultant. and/or
Integrated Risk Management Department, The South Indian Bank Limited. Page 76
breach of any provisions of this Agreement, including but not limited to any claim from third
party pursuant to any act or omission of the Consultant, in the course of discharge of its
obligations under this Agreement.
9. General:
The South Indian Bank Limited discloses the Confidential Information without any
representation or warranty, whether express, implied or otherwise, on truthfulness, accuracy,
completeness, lawfulness, and merchantability, fitness for a particular purpose, title, non-
infringement, or anything else.
In witness whereof, the Parties hereto have executed these presents the day, month and year first
herein above written.
For and on behalf of -------------------------- Ltd.
(Designation)
For and on behalf of The South Indian Bank Limited
(Designation)
Integrated Risk Management Department, The South Indian Bank Limited. Page 77
Annexure-10
Notification of Acceptance
(On organization‟s letter head)
Place:
Date:
To
The Chief General Manager (IRMD)
The South Indian Bank Ltd
Integrated Risk Management Department,
SIB House, Head Office,
2nd Floor, Mission Quarters
Thrissur, Kerala,
India – 680001
Dear Sir,
SUB: RFP No IRMD/ RFP /001/2013 Dt 15.06.2013
REF: Your Letter No: - _________________ Dt ________________.
This has reference to your letter on the subject, notifying us about the selection of our bid.
We hereby convey our absolute, unconditional and unqualified acceptance for the work and
activities as per the Scope of Work mentioned in the subject RFP.
Signature of Authorised Person
(Seal)
Integrated Risk Management Department, The South Indian Bank Limited. Page 78
Annexure 11
Authorization Letter Format
(On organization‟s letter head)
Place:
Date:
To
The Chief General Manager (IRMD)
The South Indian Bank Ltd
Integrated Risk Management Department,
SIB House, Head Office,
2nd Floor, Mission Quarters
Thrissur, Kerala,
Dear Sir,
SUB: Authorization Letter for attending the Pre-bid negotiations and signing of contract.
REF: YOUR RFP NO: - IRMD/ RFP /001/2013 Dt 15.06.2013
This has reference to our above RFP for providing consultancy services for Integrated Risk
Management Framework. Mr. / Ms. ________________________________________ is hereby
authorized to attend the Pre-bid negotiations & to discuss, sign agreements/contracts with you on
the subject RFP _____________ on _____________ on behalf of our organization.
The specimen signature is attested below:
______________________________
Specimen Signature of Mr. /Ms.
___________________________ __________________________
Signature of Authorizing Authority Name and designation of Authorizing Authority
____________________________
Name and designation of Attesting Authority
Attested
Photograph
of the Authorized
Representative
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