1 Dena Bank Request for Proposal FOR APPOINTMENT OF CONSULTANT FOR SETTING UP ENTERPRISEWIDE INTEGRATED RISK MANAGEMENT SYSTEM RFP Reference No. DB/EIRMS/RFP/01/2013-14 Dt.18.05.2013 Important Dates: Description Due Date & Time Issue Tender Notification 18-05-2013 Last date of receiving queries 24-05-2013 - 5.00 PM Pre Bid Meetings 28-05-2013 - 10.30 AM Bid Submission Last Date & Time 15-06-2013 – 2.00 PM Opening of Eligibility Bid - Date & Time 15-06-2013 – 3.30 PM Technical Bid Opening Date & Time 27-06-2013 - 12.00 PM The venue of meetings and opening of bids shall be as under: Dena Corporate Centre, C-10, G Block, Bandra Kurla Complex Bandra (E), Mumbai - 400051
Transcript
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Dena Bank
Request for Proposal
FOR APPOINTMENT OF CONSULTANT FOR SETTING UP ENTERPRISEWIDE INTEGRATED RISK MANAGEMENT SYSTEM
Description Due Date & Time Issue Tender Notification 18-05-2013 Last date of receiving queries 24-05-2013 - 5.00 PM Pre Bid Meetings 28-05-2013 - 10.30 AM Bid Submission Last Date & Time 15-06-2013 – 2.00 PM Opening of Eligibility Bid - Date & Time 15-06-2013 – 3.30 PM Technical Bid Opening Date & Time 27-06-2013 - 12.00 PM
The venue of meetings and opening of bids shall be as under: Dena Corporate Centre, C-10, G Block, Bandra Kurla Complex Bandra (E), Mumbai - 400051
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Table of Contents SECTION – I .......................................................................................................................................... 5
1) INTRODUCTION AND DISCLAIMER ................................................................................................ 5
15) PROCESS & TIMEFRAME. ........................................................................................................... 13
SECTION – II ....................................................................................................................................... 15
1) DENA BANK .................................................................................................................................... 15
2) BACKGROUND OF RISK MANAGEMENT ...................................................................................... 15
3) REQUIREMENT OF RISK MANAGEMENT ..................................................................................... 16
SECTION – III ...................................................................................................................................... 18
Annexure 7 -- DEED OF INDEMNITY .................................................................................................. 85
Annexure 8 -- PERFORMANCE BANK GUARANTEE FORMAT ......................................................... 89
Annexure 9 -- CONTRACT FORM ....................................................................................................... 93
Annexure: 10 -- Certificate of Consultations from Banks/Financial Institutions ..................................... 95
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Annexure: 11 -- Reference Site Details-1 ............................................................................................. 97
Annexure 12 -- Checklist of documents to be submitted ....................................................................... 98
Annexure-13 -- Letter of Confirmation .................................................................................................. 98
Annexure-14 -- Authorization Letter Format ....................................................................................... 100
Annexure-15 -- Non-Disclosure Agreement Format ........................................................................... 101
Annexure-16 -- POWER OF ATTORNEY FORMAT ........................................................................... 108
Annexure-17 -- Notification of Acceptance ......................................................................................... 111
Annexure-18 -- Definitions of Major terms/abbreviations used in the Document ................................. 112
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SECTION – I
1) INTRODUCTION AND DISCLAIMER This Request for Proposal document (“RFP document” or “RFP”) has been prepared solely for the purpose of enabling Dena Bank (“Bank”) in defining the requirements for appointment of a suitable organization as Technical Consultant for the ongoing and new initiatives, for migration to advanced approaches of Basel II to be undertaken by the Bank over a period of next twenty four months, who can provide prudent advice on the domain of Enterprise Wide Integrated Risk Management System and procurement of the related software solution and policies, methods, staff training incidental to that. The RFP document is not a recommendation, offer or invitation to enter into a contract, agreement or any other arrangement in respect of the services. The provision of the services is subject to observance of selection process and appropriate documentation being agreed between the Bank and any successful bidder as identified by the Bank after completion of the selection process as detailed in Section – III.
2) INORMATION PROVIDED The RFP document contains statements derived from information that is believed to be true and reliable at the date obtained but does not purport to provide all of the information that may be necessary or desirable to enable an intending contracting party to determine whether or not to enter into a contract or arrangement with Bank in relation to the provision of services. Neither Bank nor any of its directors, officers, employees, agents, representative, contractors, or advisers gives any representation or warranty (whether oral or written), express or implied as to the accuracy, updating or completeness of any writings, information or statement given or made in this RFP document. Neither Bank nor any of its directors, officers, employees, agents, representative, contractors, or advisers has carried out or will carry out an independent audit or verification or investigation or due diligence exercise in relation to the contents of any part of the RFP document.
3) FOR RESPONDENT ONLY The RFP document is intended solely for the information of the party to whom it is issued (“the Recipient” or “the Respondent”) i.e. Government Organization / PSU / Limited Company, partnership firm or/and an Autonomous Institution approved by GOI/RBI
4) CONFIDENTIALITY The RFP document is confidential and is not to be disclosed, reproduced, transmitted, or made available by the Recipient to any other person. The RFP document is provided to the Recipient on the basis of undertaking of confidentiality given by the Recipient to Bank. Bank may update or revise the RFP document or any part of it entirely at its
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discretion and without assigning any reasons there for. The Recipient acknowledges that any such revised or amended document is received subject to the same confidentiality undertaking. The Recipient will not disclose or discuss the contents of the RFP document with any officer, employee, consultant, director, agent, or other person associated or affiliated in any way with Bank or any of its customers or suppliers without the prior written consent of Bank.
5) DISCLAIMER Subject to any law to the contrary, and to the maximum extent permitted by law, Bank and its directors, officers, employees, contractors, representatives, agents, and advisers disclaim all liability from any loss, claim, expense (including, without limitation, any legal fees, costs, charges, demands, actions, liabilities expenses or disbursements incurred therein or incidental thereto) or damage (whether foreseeable or not) (“Losses”) suffered by any person acting on or refraining from acting because of any presumptions or information (whether oral or written and whether express or implied), including forecasts, statements, estimates, or projections contained in this RFP document or conduct ancillary to it whether or not the Losses arises in connection with any ignorance, negligence, inattention, casualness, disregard, omission, default, lack of care, immature information, falsification or misrepresentation on the part of Bank or any of its directors, officers, employees, contractors, representatives, agents, or advisers.
6) COSTS BORNE BY RESPONDENTS All costs and expenses (whether in terms of time or money) incurred by the Recipient / Respondent in any way associated with the development, preparation and submission of responses, including but not limited to attendance at meetings, discussions, demonstrations, etc. and providing any additional information required by Bank, will be borne entirely and exclusively by the Recipient / Respondent. Stamp duty that may be incurred towards entering in to agreement with the successful bidder for awarding the contract will be borne entirely by the successful bidder.
7) NO LEGAL RELATIONSHIP No binding legal relationship will exist between any of the Recipients / Respondents and the Bank until execution of a contractual agreement to the full satisfaction of the Bank.
8) RECIPIENT OBLIGATION TO INFORM ITSELF The Recipient must apply its own care and conduct its own investigation and analysis regarding any information contained in the RFP document and the meaning and impact of that information.
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9) EVALUATION OF OFFERS Each Recipient acknowledges and accepts that the Bank may, in its sole and absolute discretion, apply whatever criteria it deems appropriate in the selection of organizations, not limited to those selection criteria set out in this RFP document. The issuance of RFP document is merely an invitation to offer and must not be construed as any agreement or contract or arrangement nor would it be construed as material for any investigation or review to be carried out by a Recipient. The Recipient unconditionally acknowledges by submitting its response to this RFP document that it has not relied on any idea, information, statement, representation, or warranty given in this RFP document.
10) ERRORS AND OMISSIONS Each Recipient should notify the Bank of any error, fault, omission, or discrepancy found in this RFP document but not later than five business days prior to the due date for lodgment of Response to RFP. In the absence of which notification, it shall be deemed that the RFP document is immaculate.
11) ACCEPTANCE OF TERMS The Recipient will, by responding to the Bank’s RFP document, be deemed to have accepted the terms as stated in this RFP document.
12) RFP RESPONSE TERMS
12.1) Lodgment of RFP Response. Lodgment of RFP Response terms should be guided by point number 12.1 to 12.5 of Section I and any changes thereof will not be considered.
12.1.1. Bidders have to bid for the entire assignment comprehensively, i.e. for upgradation of Bank’s existing risk management systems & processes; implementing advanced approaches compliant with the Basel II guidelines and implementing / compliance of Basel III guidelines for Enterprise Wide Integrated Risk Management. Partial bids i.e. for only Credit Risk or Operational Risk and/or Market Risk etc. will not be considered for evaluation and will be rejected outright.
12.1.2. The Bank reserves the right to cancel the bid of any bidder if it is found at any stage that the details furnished by the bidder are false and to initiate action against such bidder for any damages that may be caused to the Bank. In that case, the Earnest Money Deposit (EMD) of the bidder shall stand forfeited and the Bank shall be entitled to recover all the moneys paid and claim liquidated damages. The Bank shall have exclusive discretion in canceling the bid on aforesaid ground in which regard its finding shall be unimpeachable.
12.1.3. The Bank reserves the right to accept or reject any or all the bids without assigning any reasons thereof and without incurring any liability to the bidders.
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12.1.4. Bidders should notify the Bank of any error, omission, or discrepancy found in this RFP document not later than as stated in para 10 of this section.
12.1.5. Details called for in bid documents must be completely filled up and usage of words such as OK, ACCEPTED, NOTED, TO BE DISCUSSED, AS ORALLY TOLD, ASSUMPTIONS, INTERPRETATIONS, AS GIVEN IN BROCHURE / MANUAL is not acceptable. Bids containing such usages are liable to be rejected.
12.1.6. Documents regarding the eligibility criteria shall be submitted as per Para 4 section III.
12.1.7. Bank reserves the right to cancel this RFP if only one bid is received or only single bidder satisfies the eligibility criteria.
12.2) Application Money & Earnest Money The bidder will be required to submit non refundable Application Money of Rs.15,000/-(Rupees Fifteen Thousand) by way of Bankers Cheque/Demand Draft/Pay Order favoring Dena Bank, payable in Mumbai, which is non refundable. The same must be submitted in a separate sealed envelope along with RFP response, super scribing on the envelope that it contains Non Refundable Application Money. The bidder will also be required to submit Earnest Money of Rs.10,00,000/-(Rupees Ten Lacs only) by way of a separate Bankers Cheque/Demand Draft/Pay Order favoring Dena Bank, Payable in MUmbai, which, must be submitted separately along with RFP response. Earnest Money will be refunded to all the bidders except the one who will be finally selected for award of the contract. The selected successful bidder will be required to enter in to an agreement with the bank with respect to award of contract. If the selected bidder fails to enter in to agreement of contract the Earnest Money will be subject to forfeiture at the discretion of the Bank. No interest will be payable by the Bank on the Earnest Money Deposit. The Application Money / Earnest Money documents should not be put inside the envelope containing RFP Response documents.
RFP document should be downloaded from the banks website www.denabank.com. 12.3) RFP Closing Date RFP Response should be submitted to the officials indicated below not later than 2:00 PM IST (Indian Standard Time) on 15-06-2013 12.4) Submission to Bank The RFP response documents should be submitted in paper copies - hard bound in two sets (Original Set and Duplicate Set) and each set should contain one copy of the following: (i) Sealed envelope containing documents towards Eligibility Criteria (Annexure 2) should be super scribed “ELIGIBLITY CRITERIA FOR APPOINTMENT OF
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CONSULTANT FOR SETTING UP ENTERPRISEWIDE INTEGRATED RISK MANAGEMENT SYSTEM” (ii) Another sealed envelope containing Technical Bid documents should be super scribed “TECHNICAL BID FOR APPOINTMENT OF CONSULTANT FOR SETTING UP ENTERPRISEWIDE INTEGRATED RISK MANAGEMENT SYSTEM” and (iii) Third envelope containing Commercial Bid documents should be super scribed “COMMERCIAL BID FOR APPOINTMENT OF CONSULTANT FOR SETTING UP ENTERPRISEWIDE INTEGRATED RISK MANAGEMENT SYSTEM”. The three envelopes should be put together in an envelope to constitute one set. Each set should be packed in an envelope super scribing “APPOINTMENT OF CONSULTANT FOR SETTING UP ENTERPRISEWIDE INTEGRATED RISK MANAGEMENT SYSTEM” The proposal should be prepared in English in MS Word/Excel format. In addition to submitting the hard copies, the Bid Formats dully filled and signed could be scanned and submitted in CD. Other supporting documents could be in PDF format. Paper copies of RFP response as mentioned above along with Demand Draft/Banker’s Cheque/Pay Order for Rs. 15,000/- towards Application Money (which shall be non-refundable) and Rs. 10,00,000/- towards Earnest Money Deposit & one electronic copy (Microsoft Word and Excel, on CD ROM) of Technical Bid must be submitted to Bank at the following address.
The sealed bid envelopes as mentioned above should be delivered to B.K Banerjee(Chief Manager) Risk Management Dept, Dena Bank at the address given above. The evaluation of the bid will be done as per Para 35, Section III of this offer document. The bidders who do not qualify as per eligibility criteria will not be considered for Technical evaluation. A bidder not found eligible under Technical Bid will not be considered for commercial Bid.
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12.5) Submission will be valid if; Copies of the RFP response documents are submitted as per clause 12.4, subject to clause 12.7, before the aforementioned closing date specified in clause 12.3. Submission by Fax transmission or email is not allowed and will be considered invalid. 12.6) Registration of RFP Registration of RFP response will be affected by the Bank by making an entry in a separate register kept for the purpose upon Bank receiving the RFP response in the above manner (Point 12.1 to 12.5) The RFP response must contain all documents, information, and details required by this RFP. If the submission to this RFP does not include all the documents and information required or is incomplete or submission is through Fax mode or e-mail, the RFP shall be summarily rejected. All submissions, including any accompanying documents, will become the property of Bank. The Recipient shall be deemed to have licensed, and granted all rights to the Bank to reproduce the whole or any portion of their submission for the purpose of evaluation, to disclose the contents of the submission to other Recipients who have registered a submission and to disclose and/or use the contents of the submission as the basis for any resulting RFP process, notwithstanding any copyright or other intellectual property right of the Recipient in the submission or accompanying documents. 12.7) Late RFP Policy RFP responses received after the deadline for lodgment of RFPs may be registered by Bank and may be considered and evaluated by the evaluation team at the absolute discretion of the Bank. Respondents are to provide detailed evidence to substantiate the reasons for a late RFP submission. It should be clearly noted that Bank has no obligation to accept or act on any reason for a late submitted response to RFP. Bank has no liability to any person who lodges a late RFP response for any reason whatsoever, including RFP responses taken to be late only because of another condition of responding. 12.8) MODIFICATION AND WITHDRAWAL OF BID
• The Bidder may modify or withdraw its bid after the bid’s submission, provided that written notice of the modification including substitution or withdrawal of the bids is received by the Bank prior to the deadline prescribed for submission of bids.
• The Bidder’s modification or withdrawal notice shall be prepared, sealed, marked and dispatched in accordance with the provisions as mentioned in this RFP. A withdrawal notice may also be sent by fax/e-mail but followed by a signed confirmation copy, postmarked no later than the deadline for submission of bids.
• No bid can be modified subsequent to the deadline for submission of Bids
• No bid can be withdrawn in the interval between the deadline for submission of bids and the expiry of the period of Bid validity specified by the Bidder on the Bid
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Form. Withdrawal of the bid during this interval shall result in forfeiture of Bid security.
• The modification of the bid mentioning the clause being modified will be considered as an integral part of the original bid and the relevant modifications shall be considered for bid evaluation process.
12.9) BID OPENING 1 The Bank will open only the Technical Bids as per the schedule mentioned in this
RFP. The Commercial Bid of only technically qualified bidders will be opened on a later date subsequent to the technical evaluation.
2 Attendance of all the authorized representatives of the bidders who are present at Bid
Opening will be taken in a register against name of the representative, name of the company/bidder and with full signature of the representative.
3 Each Bid will be numbered serially, signed and dated by the Officers of the Bank
except printed literature, brochure and reports. 4 The following details will be announced at the bid opening: a) Bidder’s name, b) Bid Modifications or withdrawals, if any. c) Technical Details (in case of Technical bid opening), d) Submission or non submission of Bid Security (in case of Technical bid opening) and such other details as the Bank, at its discretion, may consider appropriate. 5 Alterations in the bids, if any, made by the bidders should be signed legibly to make it
perfectly clear that such alterations were present on the bids at the time of opening of the Bids. It would be ensured that alterations are signed by the bidder/company’s executive who has signed the bid or by the bidder/company’s representative authorised by the executive who has signed the bid.
6 An “on the spot statement” giving details of the bids opened and other particulars as
read out during the opening of the bids will be prepared which will then be signed by all the bidders/representatives and bank officers present at the time of opening of bids.
7 Bids (and modifications sent pursuant to Clause – 12.8) that are not opened and read
out at Bid opening shall not be considered further for evaluation, irrespective of the circumstances. Such Bids will be returned unopened to the Bidders.
8 Commercial Bid of those bidders who fail to technically qualify will not be opened. 12.10) RFP Validity Period RFP responses will remain valid and open for evaluation according to their terms for a period of at least six (6) months from the RFP closing date.
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The Bank shall have the right at its sole and absolute discretion to continue the assignment/ contract on the consultant for future requirement on the rates finalized in this processing for various items/activities as described in the Commercial Bid after expiry of current assignment period. 12.11) Requests for Information Recipients are required to direct all communications for any clarification related to this RFP, to the Bank officials as mentioned under point 5 of Section III. All queries relating to the RFP, technical or otherwise, must be either in writing or by email only and will be entertained by the Bank only in respect of the queries received up to the date of Pre Bid Meeting. The Bank will try to reply, without any obligation in respect thereof, every reasonable query raised by the Recipients in the manner specified. However, the Bank will not answer any communication initiated by respondents later than the date of Pre Bid Meeting. Bank may in its absolute discretion seek, but being under no obligation to seek, additional information or material from any Respondent after the RFP closes and all such information and material provided will be taken to form part of that Respondent’s response. Banks response to the queries, if any, will be notified on Bank’s website (www.denabank.com). Any modification to the RFP, which Bank may consider necessary as a result of the Pre-bid Meeting, shall be made by the Bank exclusively through the issue of an Addendum on Bank’s website. No individual consultation with respect to this RFP other than the pre-bid meeting shall be entertained by the Bank. Non-attendance at the Pre-bid Meeting will not be a cause for disqualification of a bidder. 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. Bank may in its sole and absolute discretion engage in discussion with any Respondent (or simultaneously with more than one Respondent) after the RFP closes to clarify any response. 12.12) Authorized Representative: Bidders may depute their authorized representative (only one) with an authorization letter to attend for opening of bids at the time and place mentioned in the RFP. The draft of the authorization letter is provided in the Annexure no 15. The authorization letter for attending opening of bids should be submitted separately to the DGM, Risk
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Management Department, Dena Bank, Dena Corporate Centre, BKC, Bandra (E), Mumbai 400 051 at the time of submission of the bids.
13) NOTIFICATIONS Bank will notify the Respondents in writing as soon as practicable, about the outcome of the RFP evaluation process, including whether the Respondent’s RFP response has been accepted or rejected. Bank is not obliged to provide any reasons for any such acceptance or rejection.
14) DISQUALIFICATION Any form of canvassing/lobbying/influence/query regarding short listing, status etc will be a disqualification.
15) PROCESS & TIMEFRAME. Selection of a successful Technical Consultant will involve a five (5) stage approach. The approach follows the Indian Government’s Central Vigilance Commission (CVC) guidelines.
1. Issue of RFP 2. Pre-bid meeting 3. Receipt of RFP Bids 4. Evaluation of Bids 5. Award of contract
The following is an indicative timeframe for the overall selection process. Bank reserves the right to vary this timeframe at its absolute and sole discretion should the need arise. Changes to the timeframe will be relayed to the affected Respondents during the process. Description Due Date & Time Issue Tender Notification 18-05-2013 Last date of receiving queries 24-05-2013 - 5.00 PM Pre Bid Meetings 28-05-2013 - 10.30 AM Bid Submission Last Date & Time 15-06-2013 – 2.00 PM Opening of Eligibility Bid - Date & Time 15-06-2013 – 3.30 PM Technical Bid Opening Date & Time 27-06-2013 - 12.00 PM The dates mentioned above are tentative dates and the bidder acknowledges that it cannot hold the Bank responsible for breach of any of the dates. The venue of meetings and opening of bids shall be as under: “Bank’s Head Office” Situated at – Dena Corporate Centre, C-10, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400 051”
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Note: Bidders can depute their representative (only one) carrying appropriate document of authority to attend the bid opening process. No separate intimation will be given in this regard to the bidders for deputing their representatives to attend the bid opening process.
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SECTION – II
1) DENA BANK Dena Bank hereinafter being referred to as the Bank is one of the Public Sector Banks in India with a network of over 1400 branches and 21 Regional Offices. At the end of March 2013, the bank had a total business mix of Rs. 163664 Crores. The total deposits amounted to Rs.97207 Crores, while Advances was at Rs.66457 Crores. Risk management is an essential function which gives an overall view of the risks perceived from different banking operations. Dena Bank has a Risk Management Department which has different cells looking after Market Risk, Credit Risk and Operational Risk etc.
2) BACKGROUND OF RISK MANAGEMENT Presently, the Bank is compliant with the requirements of the RBI guidelines on Basel II basic approaches, i.e., Standardized approach for Credit & Market Risk and Basic Indicator approach for Operational Risk. In addition, the Bank has put in place certain building blocks from the point of view of migrating to the Basel II advanced approaches. Existing systems and procedures are as under:- a) Credit Risk: Bank has an internal credit risk rating models for Corporate Loans and Retail Loans and now Bank has procured a credit risk rating software and migration to the new model is under progress. Collection of historical data for rating grade-wise transition matrices and default rates has to be carried out. b) Market Risk: Presently, the Bank is using Standardized Duration Method in SAS Market Risk software on quarterly basis to arrive at the capital charge for Market Risk. c) Operational Risk: Collection of loss event data manually on quarterly basis. d) ICAAP: The Bank has a Board approved Internal Capital Adequacy Assessment Policy document named as ICAAP. The outcome of the policy document is submitted to the Board and then RBI after Board approval on regular basis. Bank has implemented CBS and Risk Management solutions under a common system integrator. Bank has already procured software for Credit Risk, Market Risk and Operation Risk and they are at different stage of implementation. Bank has also procured software for ALM purpose. As part of the exercise to upgrade its risk management system and processes, Bank seeks to benchmark itself against Basel II advanced approaches, i.e., Internal Rating Based Approach (IRB) for Credit Risk, Internal Model Approach (IMA) for Market risk and Advanced Measurement Approach (AMA) for Operational Risk. As the Bank would migrate towards the advanced approaches, it would have to undertake a variety of projects such as to build a range of practices for Advanced Approaches, calculate economic capital and build policies and procedures to validate and improve the models
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continually and implant these models into the business decisions of the bank and ensure appropriate controls and their usage as well as establish MIS of key indicators to senior management. In addition the Bank seeks to review the process, data and computation of Liquidity & Leverage Ratios & Composition of Capital etc as per Basel – III Guidelines.
3) REQUIREMENT OF RISK MANAGEMENT The consultant should be in a position to suggest ways to formulate policies and suggest ways to implement Basel II, Basel III and RBI guidelines pertaining to risk management, on an ongoing basis for migrating to advanced approaches of Basel II, on Enterprise wide basis. The Bank wants to put in place system and procedures so as to comply with the regulatory requirements as per the timelines stipulated thereof. a) The Consultant is required to assess the bank’s preparedness and adequacy or otherwise of existing systems in terms of:
• Policies, Procedures and systems,
• Governance structure,
• Data quality and availability,
• Risk measurement methodologies,
• Risk mitigation strategies,
• Capital calculation methodologies,
• Reporting framework and disclosures.
• Compliance as per regulations, & other related areas. b) Review the existing compliance function in the bank, perform a gap analysis vis-à-vis regulatory guidelines and industry best practices and suggest modifications, improvements or any other suitable measures c) Evaluate various risk management solutions currently in use within the Bank, assess the need for integration of the same for risk aggregation and suggest improvements for its business in India across all units / offices. d) Evaluate existing software and suggest up-gradation to provide guidance for selection of solution provider including preparation and evaluation of RFP for any new software solutions that need to be procured in the risk management area. e) Enhance existing ALM framework beyond regulatory reporting and assist in product pricing, balance sheet planning and management decision making. f) Risk Management being an evolving subject further guidance / directions are expected from the Regulators for which the consultant is expected to evaluate and advise the Bank suitably.
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g) Prepare approach application to RBI for migration to advanced approaches for IRB (credit risk), TSA & AMA (operational risk) and IMA (market risk) and help the Bank to get the application for Advanced Approaches approved by RBI. h) Advising on scalability of the entire framework to capture Basel III requirements.
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SECTION – III
1) PROJECT OBJECTIVES The Bank wishes to appoint a competent Technical Consultant to provide Assistance for Setting up Enterprise Wide Integrated Risk Management System and assist Bank in selection and acquisition of suitable software if necessary apart from the software already acquired, for Risk Management essential as per the Basel II and approximation of suitable time frame for applying to RBI for advanced approaches and completion of the necessary application procedure. Bank may, at its sole and absolute discretion, choose to avail all services or part thereof. Such decision may be advised during the course of the project. The area of consultancy shall include, but not limited to as under: 1) Credit Risk 2) Operational Risk 3) Market Risk 4) Country Risk Management 5) Asset Liability Management 6) Pillar II and ICAAP, including stress testing framework and Capital Planning. 7) Risk Management Policies and Procedures 8) Pillar III disclosures 9) Consolidation of Risk Management (all related aspects) practices especially under Pillar I, II and Pillar III. 10) Basel III aspects 11) Risk Based Supervision
2) PROJECT SCOPE IN DETAIL
2.1. PROJECT SCOPE
A description of the envisaged scope is enumerated in sub paras 2.2 & 2.3 (“A” to “G”) of this paragraph. However, Bank reserves its right to change the scope of the RFP considering the size and variety of the requirements and the changing business conditions. Based on the contents of this RFP, the selected Technical Consultant (“Consultant”) shall be required to undertake a diagnostic study to find out gaps in the existing system. Notwithstanding what is mentioned in paras 2.2 & 2.3 (“A” to “G”) hereinafter, consultant is required to design and implement Enterprise Wide Integrated Risk Management System compliant as per BASEL II, Basel III and RBI guidelines in phases within a specified time frame. 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 assignment at no additional cost to the Bank.
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The consultant will be responsible for monitoring the project till pilot phase (as required) implementation as stated below. 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 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 assignment at no additional cost to the Bank. The project scope is indicative and not exhaustive. It may be suitably amended/ revised with a view to meeting and providing for future contingencies as also to align with the changing policies/guidelines/advisories of the Government/ Reserve Bank of India/ Regulator(s).
2.2 RESPONSIBILITIES
� Conduct a gap analysis against the desired state of risk management at the Bank
benchmark the same with Basel II guidelines and identify the gaps.
• Enhance the current credit risk management policies to make it compliant with Basel
II / Basel III, RBI requirements and IRB approach requirements and frame new
policies & processes, wherever required
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Deliverables:
• Revised policies related to Credit Risk Management compliant with Basel II, Basel
III, RBI requirements and IRB approach requirements.
• Suggest method to develop new reporting frame work for all policies and software
solutions for implementing the same.
• Framework of risk profiling of branches / ROs / FGMs and bank as a whole covering
all risk areas.
Consultant may have to visit a particular number of branches/ROs/FGMs for the
purposes of fulfillment of this clause, if required.
2) Model Development Framework:
• Build LGD and EAD predictor models and conduct stress testing on LGD and EAD.
• Develop standards and operating guides for PD, LGD, and EAD model
development. The following aspects should be covered in the standards :
� Governance and controls over the model development process.
� Process to approve and use a model.
� Guidance on portfolio segmentation to determine the number of rating models to
be developed and allocation of exposures to various rating models.
� Guidelines on data collection for model development, sample creation process
and time weighting of historical data.
� Guidelines on choosing input parameters for the models and determining the
number of rating grades.
� Guidelines on the usage of statistical techniques and expert judgment in model
development including process of approval, usage of model, governance and
process controls.
� Guidelines to calibrate PD and LGD to retail pools or the borrower and facility
rating grades as applicable
� Standards of model documentation.
• Provide user guides and prototypes for model development, detailing the various
statistical/ expert judgment techniques of PD, LGD, EAD model development.
• Develop LGD and EAD predictor models and stress testing on LGD and EAD.
• Provide training
Deliverables:
• Document on LGD and EAD predictor models and stress testing on LGD and EAD.
• Develop standards (covering the above aspects) and operating guides for PD, LGD,
EAD model development.
• Provide user guides and prototypes for model development, detailing the various
statistical techniques of PD, LGD, EAD model development.
• Provide training to enable the risk management personnel to perform model
development.
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• Comprehensive report to be submitted / work to be done, covering the above scope
in whole.
3) Implementation of IRB approaches and other advancements:
• Ensuring compliance to minimum requirements for both FIRB & AIRB approaches.
• Map Asset Classes/Subclasses to Approach Type (Standardized /IRB, etc) by a
defined rule as per Basel II/ RBI guidelines.
• Furnish guiding principle on credit risk capital computation process.
• Develop the supervisory slotting criteria for specialized lending to map the credit
rating of specialized lending exposures to supervisory slots.
• Framework for compliance to securitization requirements as indicated in Basel II and
RBI guidelines as and when Bank undertakes securitization deals.
• Review the use of rating for credit sanction and pricing and loan administration.
• Suggestions for having Through the Cycle (TTC) rating as per Basel II and IRB
requirements.
• Identification of -
� Information requirements for the advanced approaches of all risk areas.
� Credit risk in Derivatives and other treasury products.
� Credit losses at portfolio level: Product wise, Rating wise, Branch wise, Region
wise, Industry wise.
� Portfolio loss estimation, correlation analysis, assessing portfolio granularity for
meeting Basel II IRB requirements.
• Review the credit risk mitigation framework in the bank.
• Provide methodology on –
� Collateral management detailing the methodology to capture, store, update and
manage collateral information.
� Treatment of counterparty credit risk covering the eligible instruments,
methodology to assess various measures of exposure amount, methodology to
identify cross product netting. The consultant has to provide guidance on the
suitable method to compute exposure.
• Study on various aspects of credit risk management at portfolio level (sectoral
deployment, group borrower, industry wise exposure caps, etc).
• Assistance in implementing the above aspects in the software selected through
including them in the business requirements, coordination with vendors to implement
the methodology in the procured software.
• Identify the information requirements for the advanced approaches of all risk areas.
Deliverables:
• Suggestions for having Through the Cycle (TTC) rating as per Basel II and IRB
requirements.
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• Identification of Credit risk in Derivatives and other treasury products.
• Identification of Credit losses at portfolio level: Product wise, Rating wise, Branch
wise, Region wise, Industry wise.
• Provide guiding principle on credit risk capital computation process. Develop the
supervisory slotting criteria for specialized lending to map the credit rating of
specialized lending exposures to supervisory slots.
• Provide methodology on collateral management detailing the methodology to
capture, store, update and manage collateral information.
• Provide methodology and implement for treatment of counterparty credit risk
covering the eligible instruments, methodology to assess various measures of
exposure amount, methodology to identify cross product netting. The consultant has
to provide guidance on the suitable method to compute exposure.
• Identify the information requirements for the advanced approaches of all risk areas.
• Comprehensive report to be submitted / work to be done, covering the above scope
in whole.
• Assistance in implementing the above aspects in the software selected through
including them in the business requirements, coordination with vendors to implement
the methodology in the procured software.
Phase 3: Achievement of minimum standards for AIRB, implementation of Basel II
software, application to RBI
1) Enhancement of rating systems for Advanced IRB approach:
• Develop LGD models for the corporate, sovereign and bank exposures. The models
should cover both defaulted and non-defaulted exposures.
• Develop EAD models for corporate, sovereign and bank exposures.
• Develop methodology for computing Effective Maturity.
Deliverables:
• Prototype LGD, EAD and Effective Maturity (M) models for Corporate and Retail
portfolios.
• Assistance in implementing of the above models in the credit risk software.
2) Advanced ICAAP Development & Implementation:
• Develop a risk based pricing framework containing:
� Methodology to estimate hurdle rate for individual business units.
� Mechanism to allocate costs to a new transaction and assess the marginal
capital requirement for a new transaction.
� Methodology to compute RAROC and SVA on an ex-ante basis and price a new
Loan.
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• A methodology to assess risk adjusted performance of business lines, regions,
product types based on the credit ratings to be developed and implemented.
• A methodology to compute the risk adjusted return earned from individual
relationship (each account wise) to be developed and implemented.
Deliverables:
• Identify data elements to be captured for RAROC, Risk Based pricing and suggest
data remediation.
• Framework documents for implementation of (for Corporate & Retail Portfolio at a
pool):
i. Risk based pricing
ii. RAROC and SVA on an ex-ante basis and price a new loan
• Identify data elements to be captured for RAROC, Risk Based pricing and suggest
data remediation.
• Comprehensive report to be submitted/ work to be done, covering the above scope
in whole.
• Assistance in the implementing the risk adjusted performance measurement and risk
based pricing in the software.
B. Scope 2: Operational Risk Management (ORM) - scope of work of
Consultant shall include but not limited to:
Phase 1: ORM Governance and The Standardized Approach (TSA)
1) Gap Analysis & ORM Governance: Which shall include but not limited to:-
• Conduct a gap analysis of the existing Operational Risk management vis-à-vis
desired level of Operational Risk (OR) management.
• Review of existing ORM Policy for making the same compliant to the Basel II and
regulatory requirements. This shall include suggestion on suitable enhanced
arrangements required with relation to Business Continuity Plan (BCP) including
Disaster Recovery (DR) and Operational Risk for all areas of Operations
• Develop Operational Risk Management strategy and objectives for the Bank.
• Develop risk reporting system and strategies to identify, measure and
control/mitigate Operational Risk.
• Advise on risk governance architecture suitable to the organizational structure of
the bank as a whole and for each business unit; and detailed roles and
responsibilities at each level.
• Re-define the roles and responsibilities and accountability of the risk
management committees and authorities with regard to Operational Risk
Management.
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• The roles and responsibilities of the independent bank wide Operational Risk
Management function and line of business management.
• A description of the internally derived analytical framework that quantifies the
operational risk exposure of the Bank.
• Define qualitative and quantitative factors and risk mitigants and incorporate
them into the Operational Risk Management Framework.
• Methodology for risk reporting covering Operational Risk exposures, material
Operational Risk losses, material near-misses to the Board, Management and
risk analysis.
• Provisions for review, treatment, and resolution of non-compliance issues.
• Suggesting techniques for creating incentives to improve the management of
Operational Risk throughout the Bank.
• Regular reporting of critical risk issues faced by the banks and its control /
mitigations to senior management and Board.
• A discussion and documentation of the testing and verification processes and
procedures, on Bank-wide basis.
• System for validating / reviewing the Operational Risk Management processes
and assessment.
• Review the existing Outsourcing Policy and suggest improvements
Deliverables:
• Gap analysis report of the existing Operational Risk management vis-à-vis
desired level of Operational Risk management.
• Revision in ORM Policy to make it compliant to the Basel II and regulatory
requirements - covering operational risk for all areas of Operations, BCP, DR etc.
as stated above.
• Submit Operational Risk Management strategy and objectives for the Bank.
• Risk reporting system and strategies to identify, measure and control / mitigate
Operational Risk.
• Risk governance architecture suitable to the organizational structure of the bank
as a whole and for each business unit defining detailed roles and responsibilities
at each level.
• Roles and responsibilities and accountability of the risk management committees
and authorities with regard to Operational Risk Management re-defined.
• Roles and responsibilities of the independent bank wide Operational Risk
Management function and line of business management re-defined.
• Description 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.
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• Methodology spelt out for risk reporting covering OR exposures, material OR
losses, material near-misses to the Board, Management and risk analysis
throughout the Bank.
• Description on review, treatment, and resolution of non-compliance issues.
• Techniques suggested for creating incentives to improve the management of
Operational Risk throughout the Bank.
• Reporting mechanism of critical risk issues facing the banks and its
control/mitigations to senior management and Board.
• Description on testing and verification processes and procedures, on Bank-wide
basis.
• System for validating / reviewing the Operational Risk Management processes
and assessment.
• Comprehensive report to be submitted / work to be done, covering the above
scope in whole.
• Revision in Outsourcing Policy
2) Installation of TSA and road map for moving ahead to advanced approaches.
• Setting up Qualitative & Quantitative standards as per Basel II and RBI guidelines
(TSA soundness standards)
• Develop methodology to meet Qualifying criteria as per TSA.
• Identification of eight Business Lines with reference to our Bank.
• Mapping of Income / Expenditure Heads into these Business Lines as per Basel II
and RBI Guidelines on TSA.
• Develop framework for capital computation as per The Standardized Approach
(TSA) for operational risk of Basel II and provide an approach to arrive at gross
income across Basel business lines / RBI Guidelines.
• Identify Operational Risk which forms a part of Pillar II.
• Integration of ORMS with that of internal audits.
• Training on TSA methodology for personnel of Risk Management Deptt at Head
Office.
• Assistance in preparing the application to RBI for migration to TSA of Operational
Risk and attending to all the queries raised by RBI till final approval.
• Oversee the project and manage the implementation of The Standardised
Approach (TSA).
Deliverables
• Set up of Qualitative & Quantitative standards as per Basel II and RBI Guidelines
(TSA soundness standards)
• Methodology to meet qualifying criteria as per TSA.
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• Identification of eight Business Lines with reference to our Bank and mapping of
income / expenditure heads to these Business Lines as per Basel II / RBI
Guidelines.
• Framework for capital computation as per The Standardized Approach of Basel II
/ RBI Guidelines and Assistance to the Bank in performing the capital computation
under Standardized Approach
• Identification of Operational Risk forming part of Pillar II.
• Description on Integration of ORMS with that of internal audits.
• Training on TSA methodology for personnel of Risk Management Deptt at Head
Office.
• Application to RBI for migration to TSA of Operational Risk and attending to all the
queries raised by RBI till approval.
• Manage implementation of The Standardised Approach (TSA).
• Comprehensive report to be submitted / work to be done, covering the above
scope in whole.
Phase 2: Risk & Control Assessments
1) Risk & Control Self Assessments (RCSA): RCSA shall include but not limited to:
• 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.
• Advising on the process of risk identification. The scope of the exercise and the
areas/units to be covered and the priority of identification. Risk Identification
should include monitoring of the external environment and industry trends.
• Develop credible methodology to determine top risks, top concerned areas
(weakness areas) and prioritize areas of improvement.
• Develop reports for the most detailed level (e.g. Report for process owners) to
the Bank (e.g. Risk map, heat map, etc).
• Develop methodology for conducting Risk and Control Self 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 Operational Risk 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 not be limited to: Treasury,
Retail Banking (liabilities, assets and cards), Trade Finance and Corporate
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Banking, Rural/priority sector lending, Information Technology, International
Banking etc.
• 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.
• Structure training and assessment workshops.
• Conduct training sessions for RCSA (including methodology of risk and control
identification, assessment and rating) at locations as mentioned in this scope.
• Integrating risk assessment exercise with internal and risk based audit to avail
maximum benefit of it.
• The Consultant will also develop an implementation strategy for rolling out the
RCSA across the Bank.
Deliverables:
• RCSA Policy and Methodology.
• RCSA Implementation across all the key businesses of the Bank.
• Methodology for RCSA roll-out and aggregation of results.
• MIS templates for reporting RCSA results on an aggregated basis.
• Methodologies to integrate KRI, RCSA and Loss Data for capital charge
estimation.
• Training for personnel of Risk Management Dept at Head Office and
Workshops for business units.
• Comprehensive report to be submitted/work to be done, covering all the
above scope in whole.
Phase 3: Loss event management Framework & KRI Framework
1) Loss event management framework: Shall include but not limited to:
• Development of loss data management framework and policy for capturing loss
data (including objective loss classification criteria).
• Template for capturing all kinds of Operational Risk incidents, Operational Risk
losses, potential losses 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.
• Design 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 process to capture non financial loss.
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• Develop methodology and process to quantify Operational Risk including scenario
analysis, the use of external loss data, considering the business environment and
internal control factors of the Bank.
• Develop mechanism on boundary events.
• 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.
• Conduct training sessions on the methodology of loss data identification,
capturing, analyzing and classification as mentioned in this scope.
Deliverables:
• Loss event management Framework.
• 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 of 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.
• Process to capture non financial loss.
• Methodology and process to quantify Operational Risk including scenario
analysis, the use of external loss data, considering the business environment and
internal control factors of the Bank.
• Mechanism on boundary events.
• Mechanism to follow up and update loss event until the event is closed.
• Methodology for mapping/classification of Bank’s loss events to different
business lines and loss event types.
• Methodology for integration of external data with internal data and methods for
scaling external data with internal data.
• Root causes analysis of all losses captured and other MIS templates for
Operational Loss reporting.
• Training to Risk management department and Workshops for business units.
• Comprehensive report to be submitted / work to be done, covering all the above
scope in whole.
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2) KRI framework: Shall include but not limited to:
• Identification of KRI and developing a framework for purpose and usage of KRI,
setting thresholds for KRI, frequency of reporting, frequency of KRI data
collection etc. It should also support evidential data (Loss Events) of the
organization, which can be furnished to the model in a useable manner.
• Develop KRIs for key risks for all key business and processes across the Bank,
including capture of source system and calculation methodology.
• Develop KRI monitoring process (including KRI data collection). Develop KRI
monitoring and validation process and methodology to ensure effectiveness of
KRIs in measuring risk level. Validation of applicability of KRIs by comparing the
KRI thresholds with available relevant internal loss data.
• MIS templates for management reporting. Suggesting on minimum and
maximum number of KRIs at Bank level and reporting of such KRIs at the Board
level, Business Line level, and Region level.
• 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.
• Conduct training sessions on KRI identification and monitoring methodology
including calibration of thresholds for key risk indicators as mentioned in the
scope.
Deliverables:
• KRI Framework covering all of the above.
• MIS template for KRI reporting and aggregation.
• 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.
• Training for personnel of Risk management department and Workshops for
business units
• Comprehensive report to be submitted / work to be done, covering all the above
scope in whole.
Phase 4: Framework for quantifying operational risk under AMA and best
practices shall include but not limited to:
• Setting up Qualitative & Quantitative standards as per Basel II and RBI guidelines
(AMA soundness standards)
• Develop methodology for recognizing insurance under the AMA which will need to
capture elements through appropriate discounts or haircuts in the amounts of
insurance recognition.
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• 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 & back testing) for key business areas of the
Bank.
• Methodology for integration of external loss data with internal loss database.
• The development and incorporation of business environment and internal control
factor assessments framework.
• Use of scenario analysis, internal loss data, BE&ICF and External loss data for
quantification
• Data collection templates and road map for operational risk modeling under AMA.
• Project Plan Requirements & Gap analysis, sound ORM library is preferred e.g.
Library of Risks, Library of KRI’s, control etc.
• Assistance in preparing the application to RBI for migration to AMA approach of
operational risk and attending to all the queries raised by RBI till final approval.
Deliverables
• Set up of Qualitative & Quantitative standards as per Basel II and RBI Guidelines
(AMA soundness standards)
• Methodology for recognizing insurance under the AMA which will need to capture
elements through appropriate discounts or haircuts in the amounts of insurance
recognition.
• 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).
• Framework for quantification of capital under Advanced Measurement Approach
of Basel 2
• Documented report on 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, BEICF etc.).
• Data collection templates and road map for operational risk modeling under AMA.
• Prototype for computation under AMA approach
• Capital computation including stress testing & back testing for key business areas.
• Assist bank in developing document for integration of operational risk
management with Internal Audit:
• Project Plan Requirements & Gap analysis, sound ORM library is preferred e.g.
Library of Risks, Library of KRI’s, control etc.
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• Application to RBI for migration to AMA approach of operational risk and attending
to all the queries raised by RBI till final approval.
• Comprehensive report to be submitted / work to be done, covering all the above
scope in whole.
Phase 5: Internal Audit Convergence, new product/process approval and Use test
approaches, application to RBI
1. Methodology for assessing Operational Risk (OR) in new product / process
Approval
• Develop framework for assessing Operational Risk in new products/processes.
Deliverables:
• Framework document for assessing Operational Risk (OR) in new
product/processes
2. Framework for leveraging existing risk based audit in ORM and integration of
ORM and audit
• Preparing document for integration of Operational Risk management with Internal
Audit.
Deliverables:
• Framework document for integration of Operational Risk Management with
Internal Audit.
• Training programme for Audit and Inspection personnel on integration of
Operational Risk Management and audit.
3. Framework for embedding Risk Management in the day-to-day operations of
the Bank (map Operational Risk Management to performance measurement
system) and approach on use tests/validation etc.
• Build framework to embed risk management in the day to day operations of the
Bank.
• Validate and assist the Bank in internal reviews and addressing the gaps
identified in the validation process.
Deliverables:
• Use test & Validation framework for Operational Risk Management.
• Documented reports for validation of internal and/or vendor models and internal
reviews.
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• Suggesting techniques for creating incentives to improve the management of
Operational Risk throughout the Bank.
• General Awareness Training Programme for Senior Management
C. Scope 3: Market Risk Management - scope of work of Consultant shall include but not limited to
Phase 1.: Qualitative requirements as per the IMA guidelines issued by RBI
• Develop Market Risk management governance structure to enhance governance.
• Develop the organization structure, roles & responsibilities of various units and personnel at different levels involved in the management of market risk;
• Skill set required for each desk (trading, front office, back office, Mid office, Internal Audit etc.) has to be assessed and documented
• Develop risk governance architecture for Treasury, Front office, Back office and Mid- office.
Enhancement of the Policies related to Market Risk Management Assist the Bank in enhancing the policies related to market risk management in order to make them compliant with the RBI’s IMA guidelines. These policies may include:
• Market Risk and ALM Policy; Valuation, Investment and Reserving policies; Risk Appetite document and Limit Structures / Frameworks; IT Security Policy and procedures for treasury operations.
• Develop mechanisms for assessing the effectiveness of the policies and practices and compliance of practices with the policies.
• Defining the scope and coverage of internal models (VaR models) to be used for calculation of market risk regulatory capital.
• Review the Bank’s market position in the relevant products, identify areas of risk concentration and review the mitigation plans.
• Prepare a roadmap of product wise migration to the advanced approach along with time lines.
• Develop the Control Framework around Market Risk Processes and Procedures.
• Develop control framework to ensure the compliance with the Board approved policies.
• Assist the Bank in streamlining the Bank’s change management processes related to introduction of new VaR models.
• Assist the Bank in enhancing the controls pertaining to the usage of models, authorization and escalation matrices (in times of breaches) and access rights from a risk and regulatory viewpoint.
• Stress testing framework for the trading portfolio of the bank should be defined properly.
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• Assist the Bank in developing Stress scenarios based on underlying stress parameters, e.g. horizon, % movement observed in stress parameters.
• The process of selecting the stress scenarios should be defined properly.
• The analysis for selecting the stress scenarios should be documented as per RBI requirements and ensure its approval from RBI.
• Review of stress testing methods of general market risk, interest rate and FX derivatives, and all the other asset classes should be supported by the current software and benchmarking with the market best practices.
• Setting up and monitoring the market Risk trading limits such as PVO1, stop loss limits and other related limits.
• The IT system related documentations and the controls around data integrity as per the requirements mentioned in RBI guidelines should be developed and implemented with the coordination of Bank.
• Assist / Work with the Bank in enhancing / preparing a system architecture diagram explaining the systems involved in the process of measurement and control of market risk and information flows between the systems.
• Help the Bank in institutionalizing and documenting a change management process to ensure the compliance with the regulatory guidelines.
• The vendor provided methodology / technical documents should be reviewed and validated to ensure the compliance with the regulatory guidelines.
• The pre test should be conducted and validated to ensure integrity of the information on positions included in the model. It should check for completeness, accuracy and integrity of market as well as position data.
• The results of such tests should be documented properly. The consultant should ensure the implementation of controls around information in coordination with Bank.
• Assist in implementing scientific FTP for capturing risk parameters Assist/Work with the Bank in streamlining its risk reporting in line with the regulatory requirements. It will include:
• Preparing / Enhancing the formats of the required reports;
• Assessing the system’s capability of generating the required reports;
• Commenting on the frequency of reports and reporting hierarchy. Deliverables:
• Updated Risk organization structure;
• Skill level documentation as per new RBI guidelines.
• Policies related to market risk management and IT securities.
• Roadmap for product wise migration;
• Enhancement in Risk governance architecture covering all the aspects of new guidelines.
• Development and Documentation of Stress scenarios and rationale for selecting those scenarios;
• System architecture diagram consisting of the systems involved in the risk measurement (VaR model, market data, position data, valuations etc);
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• Results of the tests conducted to verify data integrity and related documentation as per Guidelines.
• Enhancements in vendor provided documents related to internal models;
• Formats of risk reports as per RBI Guidelines.
• Framework for implementation of FTP
Phase 2: Quantitative Requirements as per the IMA guidelines issued by RBI
• Systems and procedures for monitoring stop loss/take profit limits across various
portfolios on real time basis under Treasury Operations.
• Documented report on systems and procedures for on line monitoring of
Country limits under all portfolios of Treasury Operations as set out in various
policies of the Bank. Study the existing systems and procedures in Treasury
branch and suggest improvements in the systems/procedures/new systems, if
required for compliance /monitoring/reporting of Regulatory Guidelines/ Internal
Limits.
• Computation of capital charge including illiquid position on market risk as per RBI
master circular-Prudential Guidelines on Capital Adequacy Framework (NCAF).
• Suggest methods in computing capital for incremental risk in the trading book.
• Validation of Mark to Market methodology for the Bank’s trading book including
all the asset classes (Equity, Fixed Income and Forex) and Derivatives.
• Review & validation of stress testing methods of general market risk, interest rate
derivatives, and all the other asset classes should be supported by the current
software and benchmarking with the market best practices
• Framework & Validation [Simulation-based & Scenario Analysis] Methodology for
Value-at-Risk Model.
• Suggest the appropriate methodology in case the existing methodologies are
insufficient or inappropriate.
• Articulate the methodologies for compliance with the “Prudent Valuation
Guidance” for positions held in the Trading Book.
• Assist the bank in shifting to VaR methods for general market –software
procurement, assumptions, merits and limitations, computational accuracy using
internal data.
• Develop methodology for Specific risk measurement capacity of the current
software – equity, fixed income and derivatives: comments and suggestions.
• Develop methodology for Specific and liquidity risk computation for fixed income
and derivatives using internal data – model selection and choice between VaR
methods and Stress Testing Specific and liquidity risk. The specific risk should
have special emphasis on computation of product specific credit estimation
factors on account of market variables.
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• Review the VaR and mark to market valuations methodologies, and suggest
improvements if required across all asset classes.
• Monitoring of the realized and the unrealized gains/losses in various asset
classes.
• Risk vs. return of various asset classes.
• Rating migration of issuers with respect to Non-SLR asset class.
• Portfolio management from a risk perspective and suggesting hedging strategies
of various asset classes.
• Computation of General Market Risk, Specific Risk, (Default Risk, Credit
Migration Risk, Credit Spread Risk) & Incremental Risk Charge as per RBI
guideline/Basel guidelines.
• 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.
• Define methodology for Value adjustment for illiquid positions as required under
Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital
Adequacy Framework (NCAF) issued by Reserve Bank of India.
• Study the Investment Valuation systems and procedures of investment portfolios
in Treasury books as per RBI guidelines and suggest
improvements/customizations etc.
• Study the Duration and Modified Duration of SLR/Non SLR portfolio of
Investments in Treasury Branch and methodology of computation. Suggest
improvements in systems/procedures and Ideal Duration/Modified Duration of
SLR/Non SLR portfolios under different market conditions.
• Study of the Stress testing policy of the Bank and suggest improvements
/formulate requirements as per extant RBI guidelines on stress testing of various
portfolios.
• Feasibility Study/Systems and procedures for VaR based STOP LOSS limits
across various portfolios.
• Documented manual/systems & procedures for Market Risk Model (MRM)
Dossier as per the RBI prudential guidelines on capital adequacy-implementation
of IMA for market risk.
• Study of existing risk measurement systems related to Interest Rate Sensitive
Portfolios, and equity exposures and suggestions/methods for improvement /
compliance of said criteria in RBI prudential guidelines on capital adequacy-
implementation of IMA for market risk.
• Assistance with software installation for specific risk, VaR. Program management
for software UAT.
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• Review the IT systems involved in the market risk management process.
• Review the various data feeds required in market risk.
• Management process including external market data as well as internal data
transfer like updation of position data.
• Review of the controls built by the Bank to maintain sanctity of the market data
fed into the Risk Analytic Engine.
• Consultant should assist the Bank in designing the database
• Requirements for collecting historical data required for VaR computation.
• Review the IT control environment and assess the suitability of the same in line
with the regulatory requirements.
• Assist/ Work with the Bank in capital calculation process General market risk
(IMA) + Specific Risk + Stress VaR as per new guidelines, incremental VaR
Deliverables
• Documented report on systems and procedures for on line monitoring of
regulatory limits and other set of aspects as mentioned above.
• Computation of capital charge including illiquid position for incremental risk in the
trading book.
• Validation of Mark to Market methodology, calculation methodology of various
risk factors
• Articulate the methodologies for compliance with the “Prudent Valuation
Guidance” for positions held in the Trading Book.
• Assisting the Bank in shifting to VaR methods for general market risk and specific
risk .
• A report consisting of validation and benchmarking results Back Testing policy and back testing results for the past few quarters with requisite analysis.
• Assessment of Stress VaR calculation
• Training workshop for both usage and validation.
• The consultant will give separate training for Inspection and Audit Division to conduct validation of Market risk implementation process.
• Prepare methodology for internal validation by IVU.
• Recommendations to fill the gaps
• Documented manual/systems & procedures for Market Risk Model (MRM)
Dossier as per the RBI prudential guidelines on capital adequacy-implementation
of IMA for market risk.
• Review the IT control environment and assess the suitability of the same in line
with the regulatory requirements.
• Review existing software and IT systems and model Validation and suggest on
any required software solution
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• Consultant should assist the Bank in designing the database requirements for
collecting historical data required for VaR computation.
• Review the model validation documentation / UAT documents prepared by the
Bank at the time of system implementation and suggest enhancements.
• Define criteria for Regular review of the performance of vendor based models.
• Assist bank in setting up of tolerance limits.
Comprehensive report to be submitted/ work to be done, covering the above scope in
whole.
D. Scope 4. Other scope of work of Consultant shall include but not limited to: Phase 1: Enterprise Risk Management – scope of work for consultant shall
include but not limited to
• Alignment of Risk with Strategy at the whole Bank level: � Integration of risk with performance assessment process, � Develop scenarios and consider likelihood, consequences and potential costs
(tangible and intangible) of each potential risk event � Develop plan to address risks either by avoiding, accepting, reducing or sharing
them � Establish policies and procedures that help an organization efficiently and
effectively carry out risk responses � Develop governance, processes for aligning risk with Bank’s strategy and
continuously monitor the same.
• Definition of Bank’s risk appetite with risk limits
� Study the risk philosophy of the Bank, future growth strategies and stakeholder expectations and define qualitative and quantitative tolerance levels to assist the Bank in formulating the risk appetite of the Bank for various risks faced.
� Define the Risk Capacity and Risk Appetite of the Bank after review of the existing framework and within the purview of business objectives through interactions with Senior Management.
� Devise a mechanism to facilitate Top/Senior Management to dynamically revise Risk Limits within the overall Risk Appetite in order to leverage on emerging business opportunities and to manage changes in business environment more efficiently.
• Material Risk assessment � Define the Enterprise Risk Assessment (ERA) Standards to establish a
comprehensive program, methods and tools to help Bank identify and address weaknesses in internal controls that mitigate significant material risks. A primary objective of these Standards would be to lower material risk losses.
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� Ongoing design and assessment of the operating effectiveness of the Enterprise wide Controls that mitigate fraud and related wrongdoing, and other existing, emerging and potential risks
� Assessment and approval of exceptions to the Enterprise wide Controls and coordinating the exception renewal process
� Business risk assessment framework for linking and assessing the identified business risks on earnings and capital
� Analysis of the risk and control environment using results from the Oversight Function and Internal Audit’s assessments as well to determine if new controls are required or existing controls need to be modified or removed
• Creation of a comprehensive library of events and framework for Bank- wide stress testing and scenario analysis
� Study the existing Stress testing frameworks and suggest enhancements. � Develop an exhaustive library of scenarios and events � Design plausible scenarios / identification of a set of appropriate risk factors in
the specific context, in line with risk management objective and portfolio exposure
� Develop portfolio realistic and relevant shocks by introducing macroeconomic events
� Develop impact analysis on RWA, capital, provision and P&L � Determine impact on capital adequacy and other measures
• Framework for risk aggregation and diversification
� Review and enhancement of current modeling method used by the Bank to aggregate risk
� Develop framework to achieve the risk aggregation technique that can perform under wide range of conditions
� Develop framework to determine diversification existing within Bank at various different levels
� Develop framework for computing diversified capital requirement
• Integrated IT and Data Infrastructure to support ERM framework
� Develop data requirement for supporting ERM framework within the Bank � Develop system requirement for supporting ERM framework within the Bank
Deliverables:
• Revised ICAAP framework and policy
• Material risk assessment framework and assessment of material risks
• Alignment of risk with Bank’s strategy
• Setting up risk appetite and risk limits for the Bank
• Revised stress testing framework
• Development of comprehensive risk scenario library
• Framework for risk aggregation and diversification
• Framework for capital planning and risk adjusted return on capital
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• Framework for analysis of results of Stress Testing and Scenarios in terms of
Profitability, Liquidity, Capital Adequacy and Business
• Framework for Internal audit convergence with risk management
• Data and system requirement to support ERM framework within Bank
Phase 2: Scope of work for Asset Liability Management (ALM) shall include but
not limited to:
(1) ALM Policy: 1.1. Examination of existing ALM Policy(s), Procedures, reporting and MIS stated
therein and prepare a Gap Analysis Report, which should cover the existing ALM architecture IT requirements as per RBI guidelines.
1.2. Identify areas of improvement / enhancements and prepare a Gap Report-covering the existing governance structure, policies (w.r.t. liquidity; contingency funding (including CFP under various stress test scenarios), setting up tolerance limits, Fund transfer pricing etc.), procedures and systems, and
1.3. The changes / improvements / enhancements are to be benchmarked with regulatory standards & leading industry practices and compliance with regulatory requirements.
1.4. Assist the Bank in reviewing the ALM Policy, Liquidity Policy incorporating the Contingency Funding Plan & sources thereof, risk appetite document etc., so as to align them with the regulatory requirements, and identify the gaps in relation to RBI guidelines and existing MIS structure.
1.5. To identify the gaps in the implementation of the RBI guidelines pertaining to:
1.5.1. Preparation of ALM Statements 1.5.2. Reporting System 1.5.3. Projections of Dynamic Liquidity 1.5.4. Stress Testing under Liquidity and Interest Rate Risk 1.5.5. Requisite Data for comprehensive ALM Statements 1.5.6. Behavioural Studies of various Assets and Liabilities whether it conforms
and depicts the actual situation. 1.5.7. Earnings at Risk and Economic Value of Equity 1.6. Examination of existing Derivative Policy (from ALM prospective),
Procedures, reporting and MIS stated therein and prepare a Gap Analysis Report, which should cover the existing ALM architecture & IT requirements as per RBI guidelines.
1.7. Examination of existing Stress test Policy (from ALM prospective), Procedures, reporting and MIS stated therein and prepare a Gap Analysis Report, which should cover the existing ALM architecture & IT requirements as per RBI guidelines. Suggest the parameters for limit setting process and Computation of stressed VaR.
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1.8. Cover the second risk factors like skew adjustment in case of option portfolio and correlated factors.
(2) ALM framework at the Bank and suggest improvements for effective and efficient liquidity and Interest rate risk management:
2.1. Re-defining / re-aligning the Composition of ALCO, roles / functions, responsibilities and accountability of the ALCO and ALCO support group viz.-a-viz. changing market conditions / scenario, available financial products in the market and industry vide practices.
2.2. Assist the bank in reviewing its existing ‘stock approach’ (based on ratios) to monitor the liquidity (Including Basel III liquidity ratios, LCR & NSFR) identify the gaps and suggest changes / improvements / enhancements, data collection, computation and that existing software / IT system is adequate to cater this Need or improvement, if any required therein.
2.3. Identify gaps / areas of improvement in interest rate risk management policies and procedures, interest rate risk exposure of the bank (on a consolidated / individual basis) and suggest / design appropriate policies, procedures (including monitoring & reporting to management/Board on a prescribed schedule) and methodology to evaluate, control and limit the risk (by establishing and enforcing operating limits and other practices that maintain exposures within levels consistent with their internal policies), identify, design procedures (including parameters, data requirement) for quantifying risks inherent in new products and activities and to ensure that these are subject to adequate procedures and controls before being introduced or undertaken, draw procedures; methodology to measure the vulnerability to loss under stressful market conditions - including the breakdown of key assumptions, design adequate internal controls & independent review mechanism to evaluate the adequacy and integrity of interest risk management processes.
2.4. Suggest & design computational requirements & methodology for Interest Rate, Equity Risk as well as Exchange Rate Risk.
2.5. Suggest qualitative factors and risk mitigants and how they can be incorporated into the ALM policy Framework.
2.6. Cover the second risk factors like skew adjustment in case of option portfolio and correlated factors.
(3) Defining and developing model validation standards and change management framework for MTM-FTP and VaR (on Balance sheet):
3.1. Define Model validation standards for periodic as well as on-going validation. It should include at the minimum:
i. Procedures for validation of MTM-FTP as well as VaR models ii. Frequency of periodic validation and trigger point for on-going validation. iii.Suggest techniques, analysis and monitoring/reporting structure to align MTM-FTP as well as VaR models. iv. Responsibility matrix and scope of the validation exercise v. Documentation requirement for model validation
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3.2. Define criteria for Regular review of the performance of vendor based models. 3.3. Define criteria for introduction of new products.
3.4. Suggest management structure for systems, processes and methodologies which shall include but not limited to:
i. Methodologies of MTM-FTP and calculation of VaR ii. Source or input data type iii. Procedures / processes pertaining to MTM-FTP and calculation of VaR. iv. Software systems v. Process related to internal approval. vi. Impact analysis of the changes
3.5. Assisting the Bank in ensuring availability of adequate documentation of Vendor model as per RBI requirement.
3.6. Comment upon the adequacy of the following: i) Regular reporting of critical risk issues facing the bank and its control /
mitigations to Senior management and Board. ii) Provisions for review, treatment, and resolution of non-compliance issues. iii) System for validating / reviewing the ALM processes and assessment.
3.7. Develop framework for capturing interest rate risk (specific and general), equity price risk (specific and general), exchange risk and other risks as per RBI guidelines. Factors like Re-pricing Risk, Yield Curve Risk, Basis Risk, and Embedded Options Risk should be covered in this process (Both on balance sheet items and off balance sheet items should be covered).
3.8. Systems and procedure for monitoring RBI guidelines and various risks under derivative / of balance sheet items.
3.9. Conduct behavioral studies on distribution on assets and liabilities for bucketing purpose for preparation of statement of structural liquidity and Interest rate sensitivity.
3.10. Conduct back testing; develop an evaluation procedure of Back Testing results and stress testing for liquidity risk and interest rate risk.
3.11 Develop methodology for future estimation of inflows and outflows for preparation of Statement of Short Term Dynamic Liquidity and back testing of the statement prepared.
3.12 Computation of Modified duration (in reference to RBI guidelines dated 04.11.2010) of assets and liabilities, assessment of Modified duration of equity, setting limits for Modified duration of assets and liabilities.
3.13 Define the methodology to be adopted for calculation of Stress VaR. Review the netting and correlation benefits availed during VaR calculation. Prepare detailed roadmap for the smooth transition from standardized approach towards Internal Model Approach.
3.14 Liquidity Risk Management by banks as per RBI circular dt.07.11.2012
(4) Review of the existing software systems related to ALM and suggests the improvements required in order for them to be of the standards defined by Basel II / RBI.
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(5) MIS: 5.1 Development of MIS framework for ALM reporting and disclosure requirements
to the regulators. 5.2 Design reporting templates as required for the regulator (RBI), if any, as well
as the Bank’s Senior Management and the Board. 5.3 Methodologies for risk reporting covering exposures, limit breaches,
Management of breaches and risk analysis.
(6) Assessment of the internal control environment relating to ALM function and suggesting improvements.
6.1. Assess the adequacy of the controls pertaining to the usage of models like MTM-FTP, VaR, back testing, Stress testing etc.
6.2. Compliance framework for all types of derivative products as regards regulations and market best practices.
Phase 3: Pillar II - Capital Planning & Capital Allocation
• Evaluate the capital planning process in the Bank and arrive at a holistic design for
capital planning and budgeting based on the envisaged risk environment.
• Method/framework to compute Credit VaR, Operational Risk VaR and Market VaR.
Framework for allocation of capital and risk aggregation.
• Enable the Bank to move over to RAROC and EVA. Assist in risk return analysis and
risk adjusted performance measurement at account level/ portfolio level/ each
business unit level etc.
• Bank plans to implement Matched Fund Transfer Pricing Solution for Profitability
Management. Consultant to help the Bank integrate risk and performance
management which would help promote growth and profitability
• Consultant to help bank measure and meet risk-adjusted performance objectives,
price products to reflect their true risk, and monitor possible threats to liquidity and
capital adequacy.
• Evaluate the risk in MIS currently available and suggest enhancements.
• Develop Framework / models for country risk exposure.
• Review the reporting mechanism and help in designing intuitive dashboards
covering various risk areas.
• Suggest suitable framework for corporate governance standards as per Basel II
guidelines/ industry best practices.
• Review the existing compliance framework/ set up vis-à-vis regulatory / statutory
requirements and suggest modifications / improvements, on par with industry
standards.
• Review the reporting mechanism and suggest modifications / improvements
• Assess the need for system and manpower support for compliance function.
• Methods to improve the existing MIS through gap analysis and cover all risk areas.
• Design dashboards for capturing various risk areas.
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• Develop framework for risk adjusted return on capital
Basel III aspects:
• The selected bidder shall have to assist the Bank in evaluation of existing capital planning process in the Bank and suggest a holistic design for capital planning and budgeting based on envisaged risk environment and Basel III requirements.
• The selected bidder shall assist the Bank in addressing the issues of Tier 1 capital, leverage ratio, Framework for countercyclical capital buffers, Measures to limit counterparty credit risk, Short & medium-term quantitative liquidity ratios and other requirements as per Basel III guidelines.
• The selected bidder shall assist the bank in evolving the road-map to meet all existing
regulatory guidelines (Basel II & Basel III) and any other guidelines issued during the
course of project implementation.
• Review the process, data and computation of Liquidity and Leverage Ratios and
composition of capital as per the Basel III guidelines.
• Review the risk assessment processes with respect to usage of external ratings,
counterparty credit risk etc as per the Basel III guidelines.
Deliverables
• Fine tune the disclosure policy and enable an environment for automating the
process of generation of Pillar III disclosures.
• Capital Planning & Capital Allocation
• Build framework for economic capital allocation and risk aggregation.
• Enable the Bank to move over to RAROC and EVA. Assist in risk return analysis and
risk adjusted performance measurement at account level/ portfolio level/ each
business unit level etc.
• Documented recommendations and setting up system for risk-adjusted performance
objectives, price products to reflect their true risk, and monitor possible threats to
liquidity and capital adequacy.
• Develop Framework /models for country risk exposure.
• Suggest suitable framework for corporate governance standards as per Basel II
guidelines/ industry best practices.
• Methods to improve the existing MIS through gap analysis and cover all risk areas.
• Design dashboards for capturing various risk areas.
• Comprehensive report to be submitted/work to be done, covering all the above
scope in whole. Counterparty credit risk measurement methodology as per Basel II
and Basel III norms
• Design methodology for computation of Liquidity Coverage Ratio and NSFR from the
Basel III perspective
• Design methodology for computation of Leverage Ratio from the Basel III
perspective
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• Cover the capital computation under the Basel-III regime while designing RFP for
risk management system selection
Phase 4: Pillar III – Disclosure Aspects & Reporting Framework:
• Assist the Bank in developing a policy for Pillar 3 disclosures and rating based MIS.
• The policy should provide guidelines on the reporting templates, governance of
reporting process and controls over the reporting process.
• Implement the Pillar 3 disclosures and rating based MIS by identifying the various
source systems, developing reporting formats as per the regulatory and business
needs.
• Develop methodology for industry risk analysis, industry exposure limit setting,
concentration monitoring and Portfolio analytics covering asset classes, products
and rating grades.
• Reports to monitor credit migrations and trends in credit quality.
• Study the report on “Risk Management System, Risk Based Supervision, Risk
Based Internal Audit (RMS –RBS/RBIA)”, being submitted by the Bank to RBI on
quarterly basis, progress made by the Bank till date, identify gaps therein and
suggest measures/ action plan to be taken by the Bank to adhere to the time frame.
• Assist the Bank in developing MIS for submitting to regulator information in Data
Compilation Templates prescribed by RBI from time to time.
• Review the existing Disclosure Policy and suggest improvements
Deliverables:
• Disclosure Policy as per Pillar 3 requirements of Basel II that includes reporting
formats.
• Portfolio monitoring reports and dashboards covering all the reporting requirements
mentioned in the above scope.
• Documented report on RMS –RBS /RBIA.
• Comprehensive report to be submitted / work to be done, covering all the above
scope in whole.
• Revised Disclosure Policy
E. Scope 5. Required RFP document preparation and procurement of
software. A. Vendor(s) Selection Exercise: Access existing software and identifying additional
software, if required, for moving to advanced approaches of Credit Risk (including credit
The bidder will submit an undertaking specifying that the bidder has obtained all
necessary statutory and obligatory permission to carry out project works, if any.
5.1 DOCUMENTS TO BE SUBMITTED ALONG WITH THE BIDS
5.1.1 Eligibility Criteria:
Documentary evidence should be provided for each of the eligibility criteria. The
following documents are to be submitted with the bid for Eligibility Criteria:
a) Index of all documents submitted.
b) Documentary proof(s) mentioned in Annexure 2.
c) Notarized Power of Attorney of the Authorized signatory (Annexure-17) along with a
copy of the resolution in case of companies.
d) Letter of Confirmation as mentioned in Annexure- 13
e) The bidder should provide an undertaking on letter head, as regards to the
commitment that, the key personnel to be deployed for assignment have required
qualifications and adequate previous work experience in implementation of
Enterprise-wide Integrated risk management architecture including system
implementation projects for BASEL II compliance and that once they are assigned to
the project, they will not be moved out of it, except with the written permission of the
Bank for reasons beyond the control of the bidder.
f) A certificate to the effect that the contents of the CD placed in the envelope are
same as that provided in hardcopies placed in the envelope.
g) Bidders are also required to include a disclosure statement of any potential conflict
of interest the bidding organization or its associates or subsidiaries or holding
companies or group companies may have due to other clients, current or former
employees, contracts or interests associated with this project.
h) The bidder will submit a declaration specifying that the bidder has obtained all
necessary statutory and obligatory permissions to carry out the consultancy work, if
any.
i) Details of pending disputes, court cases if any by / against the bidder.
j) Any other relevant legal document
All the other Supporting Documents as mentioned in Eligibility Criteria, brochures,
leaflets, manuals etc should be in English. In addition to submitting the hard copies, the
Bid Formats dully filled and signed could be scanned and submitted in CD. Other
supporting documents could be in PDF format.
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5.1.2 FORMATS OF BIDS: The bidders should use the formats prescribed by the Bank
in the RFP for submitting both Technical and Indicative (Estimated) Prices. Any
deviation in this regard entails the bidder for disqualification. The Technical Proposal will
be evaluated first for eligibility and then technical suitability for eligible bidders only.
Indicative (Estimated) Prices shall be opened only for the bidders who have qualified in
the Technical Proposal evaluation.
5.1.3 Technical Bid:
The Technical bid as per Annexure 3 should be complete in all respects and contain all
required information sought for, except the price. Any reference to bid price in the
Technical Bid shall amount to disqualification.
The following documents are to be submitted with the bid for Technical Bid:
a) Index of all documents submitted.
b) The bid should contain the details and work plan (without quoting the bid amount) for
each of the Seven scopes as in Section III sub para 2.2 & 2.3 along with the plan of
resources proposed to be deployed for respective risk areas viz. credit risk, market risk,
operational risk etc. of the project which includes, inter-alia, the number of personnel,
skill profile of the team leader and each team member (as per Annexure 5), duration
etc.
c) A certificate to the effect that the contents of the CD are same as that provided in
hardcopies.
d) Certificate of consultations from Banks / Financial institutions – Annexure 10.
5.1.4 Commercial Bid:
a. Commercial Bid has to be submitted in the prescribed proforma (Annexure 4) duly
filled along with Bid Form (Annexure 1). The bidders should give the details of the
work they offer to undertake (at the minimum the work proposed to be undertaken
should cover all the activities mentioned in the scope of work as per Section III, para
2 to carry out in each stage separately).
b. The Professional Fees / Price shall be 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 excluding Service Tax. The Service tax shall
also include applicable surcharge/cess on service tax, if any. No price variation other
than Service Tax will be permitted.
c. The Commercial Bid should give all relevant price information and should not
contradict the Technical Bid in any manner.
d. If any envelope (other than master envelope) is found to contain both Technical and
Commercial, then, that bid will be rejected outright.
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e. The commercial bid of the short-listed bidders will be opened after Technical
evaluation stage. Those bidders satisfying the technical requirements as determined
by the Bank, in its absolute discretion, shall be short-listed for opening their
commercial bid.
5.1.5 NOTIFICATION OF ACCEPTANCE OF BID
a) Notification to the Successful Bidder
Before the expiry of the period of validity of the bid, the Bank shall notify the successful
bidder in writing by registered letter or by e-mail, that its bid has been accepted. The
successful bidder shall acknowledge in writing receipt of the notification of acceptance
and has to convey their absolute, unconditional & unqualified acceptance within 7 days
of the notification. (Annexure 18)
b) Signing of Contract Form
The notification of the acceptance by the successful bidder shall be followed by signing
of the Contract Form which shall be completed within 15 days of receipt of notification of
the acceptance by the Bank of the bid by the successful bidder. The successful Bidder
should execute the Contract Form as per the format (Annexure 9). The execution of
Contact Form will amount to award of contract and Bidder has to initiate the execution
of the work as specified in the Contract and the timelines for completion of the contract
shall be deemed to have commenced on the date of signing of the Contact Form.
c) Discharge of Earnest Money Deposit (EMD)
Earnest Money Deposit of successful Bidder shall be discharged on the Successful
Bidder signing the Contact Form and upon furnishing the Performance Bank Guarantee.
The Earnest Money Deposit of unsuccessful bidders shall be discharged / returned 10
days after the Bank entering into consultancy agreement with the successful bidder.
6. EARNEST MONEY DEPOSIT (EMD) Earnest Money Deposit of Rs 10,00,000/- (Rupees Ten lacs only) has to be submitted
by way of Demand Draft / Banker's Cheque / Pay Order drawn in favor of "Dena Bank”
payable in Mumbai. Earnest Money will not carry any interest. The Earnest Money
Deposit of unsuccessful bidders will be refunded while intimating the rejection of the bid.
The Demand Draft/Banker's Cheque/Pay Order towards Earnest Money Deposit should
be delivered separately along with the sealed envelopes containing RFP responses and
it should not be kept inside the sealed envelopes containing RFP responses. Non-
submission of Earnest Money Deposit will lead to outright rejection of the Offer.
The Earnest Money Deposit will be forfeited if:
• The bidder withdraws his tender after opening of the envelope containing eligibility
criteria documents.
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• The bidder violates any of the provisions of the terms and conditions of this RFP
specification.
• The successful bidder fails to sign the Contact Form and / or furnish the
Performance Bank Guarantee.
7. GENERAL TERMS AND CONDITIONS (Please also refer to Section – I)
7.1 Term of Assignment:
The Consultant under this RFP will be appointed for a period extending till setting up of
Enterprise-Wide Integrated Risk Management System as mentioned in the above scope
as per Basel II/ Basel III and RBI guidelines, includes successful implementation of Pilot
phase as mentioned in the scope. The consultant will be expected to assist Bank in
preparing application to RBI, getting its approval and all follow up matter in respect of
the same.
7.2. Adherence to Terms and Conditions
The bidders who wish to submit responses to this RFP should note that they should
abide (in true intent and spirit) by all the terms and conditions contained in the RFP. If
the responses contain any extraneous conditions put in by the Respondents, such
responses may be disqualified and may not be considered for the selection process.
7.3. Execution of Non Disclosure Agreement (NDA)
7.3.1 The selected bidder shall execute Non Disclosure Agreement (NDA) on the draft
suggested by the Bank.
7.3.2 As the selected bidder will have access to the data/information of the Bank while
implementing Risk Management Framework, the Bank will require the selected bidder to
sign a non-disclosure agreement along with the Consultancy Contract for the
consultancy assignment in the NDA format (Annexure-16) provided by the Bank,
undertaking not to disclose or part with any information relating to the Bank and its data
to any person or persons, as may come into possession of the selected bidder during
course of the implementation and security integration.
All expenses and costs for execution of the Consultancy Agreement and NDA shall be
borne by the successful Bidder.
7.3.3 Failure to abide by the NDA The conditions stipulated in the NDA shall be strictly adhered to and any breach /
violation thereof will entail termination of the Contract without prejudice to the other
rights of the Bank including recovery of liquidated damages as specified in this RFP or
NDA.
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7.3.4 Annulment of Award Failure of the successful Bidder to comply with the terms and conditions of the contract
shall constitute sufficient ground for the annulment of the award and Invocation of
Guarantee, in which event the Bank may at its sole discretion, make the award to the
next best evaluated bidder or call for new bids.
In the event of the Bank making the award to the next best evaluated bidder, a
notification as mentioned in para 5.1.5 shall be given to such next best evaluated bidder
and all clauses of this RFP applicable to the successful bidder shall be applicable to
him. This RFP document or any other document related to this RFP or any portion
thereof shall not be used for any other purpose, except for submission of the bids in
response to the RFP.
7.4. Period of Contract
The consultant will be expected to assist the Bank in successful implementation and
UAT of the software solution and calculation of the required capital adequacy for all
risks as required by the Basel II advanced approaches with in a period of 24 months.
The consultant is expected to assist the Bank in implementing Basel II/ Basel III under
all the three pillars through a process of, including but not limited to, identifying the gaps
in the present risk management system of the bank, selection of software vendor(s),
preparing application for migration to advanced approaches to RBI. Post submission to
the regulator, the Consultant should assist the Bank in addressing the RBI queries and
comments and making suitable changes in the Basel II/Basel III 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. Hence, even if it takes 5-7 years for the Bank to finalize
the application, the consultant shall provide all necessary assistance during that period.
7.5. Other terms and conditions
The Bank reserves the Unilateral right to:
• Reject any and all responses received in response to the RFP.
• Waive or Change any infirmity, non conformity, formality, irregularity, or inconsistencies in a Bid, which does not prejudice or affect the relative ranking of any Bidder and this shall be binding on all the bidders.
• Extend the time for submission of all proposals.
• Select the most responsive bidder (in case no bidder satisfies the eligibility criteria in totality).
• Select the next most responsive bidder if the Least Price bidder (L1) fails to execute the agreement within a specified time frame.
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• Share the information/ clarifications provided in response to RFP by any bidder, with any other bidder(s) /others, in any form.
• Cancel the RFP/Tender at any stage, without assigning any reason whatsoever.
8. WORK SPACE/STAFF MEMBERS REQUIRED FOR CARRYING OUT
ACTIVITIES The key persons identified by the Consultant for the project should carry out their
activities from Dena Corporate Centre, C-10, G Block, Bandra Kurla Complex, Mumbai
or any other suitable location as provided by the Bank. The consultant has to submit the
work space required by them minimum one month in advance. The requirement of the
staff members from the Bank along with their expected skill set should be requested a
month in advance for different phases and areas of implementation. The expected skill
set should be from the available resource of the bank that can be put at the disposal of
the consultancy contract.
9. PROJECT TEAM MEMBERS The key persons identified by the Consultant should posses at the minimum the following qualification/experience.
Professionals with relevant qualifications like B Tech / M. Tech / MCA / OR, CA, MBA, FRM, PRM, Statistician, CPA specialist permanently employed by them These professionals should have requisite experience in relevant fields for at least 2 years, 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 public sector bank in India.
10. SUBSTITUTION OF PROJECT TEAM MEMBERS During the assignment, the substitution of key staff identified for the assignment will not be allowed unless such substitution becomes unavoidable to overcome the undue delay or that such changes are critical to meet the obligation. In such circumstances, the Consultant, as the case may be, can do so only with the prior written concurrence of the Bank and by providing the replacement staff of the same level of qualifications and competence. If the Bank is not satisfied with the substitution, the Bank reserves the right to terminate the contract and recover whatever payments(including past payments and payment made in advance) made by the Bank to the Consultant during the course of the assignment pursuant to this RFP besides claiming an amount equal to the contract value as liquidated damages. However, the Bank reserves the unconditional right to insist the Consultant to replace any team member with another (with the qualifications and competence as required by the Bank) during the course of assignment pursuant to this RFP. Bank may allow any such substitution of key staff only with its written consent with similar experience & expertise.
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11. PROFESSIONALISM The Consultant should provide professional, objective and impartial advice at all times and hold the Bank’s interest paramount and should observe the highest standard of ethics, values, code of conduct, honesty and integrity while executing the assignment.
12. ADHERENCE TO STANDARDS The Consultant should adhere to all the applicable laws of land and rules, regulations
and guidelines prescribed by various regulatory, statutory and Government authorities.
The Bank reserves the right to conduct an audit/ongoing audit of the consulting services
provided by the Consultant.
The Bank reserves the right to ascertain information from the other banks and institutions to which the bidders have rendered their services for execution of similar projects.
13. EXPENSES 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”. However, Consultant, if
required by the Bank, has to travel to our offices located in and outside Mumbai, no
separate reimbursement towards travel and other expenses shall be made by the Bank.
14. 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 as per the phases defined in the scope of services
under the RFP. No advance payment will be made.
The criteria mentioned below are only for the payment of the professional fees. The
consultant shall cover the entire scope of services mentioned and deliver all the
‘deliverables’ as mentioned under the scope of work. Payment will be based on the
phases covered on the basis of progress of the consultancy contract.
Phase
s
Credit Risk
Operational Risk
Market Risk
Other Scope of Work
RFP & Software
Ongoing assistance etc.
Training
TOTAL
20% 20% 15% 15% 5% 5% 5% 85%
Phase I 5% 3% 7% 4% 19%
Phase
II
8% 4% 8% 4% 24%
Phase 7% 4% 4% 15%
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III
Phase
IV
-- 4% 3% 7%
Phase
V
-- 5% -- 5% 5% 5% 20%
Bank will release payment within 30 working days from the date of receipt of invoice. In
case of dispute/s, payment will be made within 15 working days of resolution of
dispute/s. No penal interest will be paid for delayed payment.
• Ten percent (10%) of the professional fees would be paid post successful pilot
phase implementation of all the systems and successful setting up of advanced
approaches under Basel II for credit, operational and market risk and compliance to
Basel III guidelines.
• Five percent (5%) of the contract amount will be retained by the Bank as Retention
Money and will be released one year after successful approval by RBI under Basel II
guidelines as under:
- Approval of Bank’s application under Advanced Approaches by RBI.
- Conduct of SREP by RBI and rectification of all deficiencies indicated by RBI during
SREP.
The release of payments and retention money will be further subject to the
following conditions.
- The consultant should delegate all the scope into deliverables.
- All the deliverables as mentioned under ‘Scope of services under the RFP’ should
be covered phase-wise.
- The documents, reports and drafts submitted by the consultant should comply with
Basel II, Basel III and RBI guidelines and are subject to acceptance by the Bank.
- All the recommendations submitted by the consultant should be supported by
documentary evidence.
- The consultant cannot change the Project Manager during the entire period of
execution of the scope unless consented by the Bank in writing.
- The consultant should make outlay of resource proposed to be deployed in the bid
document for the project which includes, inter-alia, the number of personnel, skill
profile of each personnel, duration etc.
15. CHARGES TERMS By submitting the bid for consultancy, the bidder will be deemed to have accepted all
the terms and conditions mentioned in the RFP document. The rates quoted by the
bidder/consultant shall be adequate to complete the assignment according to the
specification and conditions attached thereto The bidder/consultant should take into
account all conditions and difficulties that may be encountered during the course of
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assignment and quote the amount, which shall include agreed professional fee /
contract amount with taxes, royalties, VAT and other duties and the value and all details
of other facilities and services necessary for proper completion of the assignment,
except such as may be otherwise provided in the contract document for completion of
the assignment. The TDS amount on prevailing rate and work contract tax etc. shall be
deducted from consultants running account/Final bills. Necessary certificates shall be
issued to the consultants by the Bank. All taxes including work's contract tax etc in
respect of this contract shall be payable by the consultant and the bank will not be liable
for any claim whatsoever in this respect during the period of contract. However service
tax payable on the payment of contract amount will be borne by the bank
16. CONTRACT PERFORMANCE GUARANTEE The selected bidder has to provide an unconditional and irrevocable Performance Bank
Guarantee (as per Annexure – 8) for 10% of the contract value from a Public Sector
Bank (but not Dena Bank) towards due performance of the contract in accordance with
the specifications, terms and conditions of this RFP document, within 15 days from the
date of letter of appointment. The Performance Guarantee shall be kept valid till 6
months after closure of the consultancy project (as described in para 7.4 of Section III).
The guarantee shall also contain a claim period of three months from the last date of its
validity.
The Bank guarantee will be returned to the selected bidder 90 (ninety) days after the
selected bidder’s performance obligations under the agreement are completed and
accepted by the Bank. The selected bidder shall be responsible for extending the
validity date and claim period of the Bank guarantees as and when it is due, on account
of incompletion of the project.
In case the selected bidder fails to submit performance guarantee within the time
stipulated, the bank, at its discretion, may cancel the order placed on the selected
bidder without giving any further notice.
The Bank shall invoke the Bank guarantee before the expiry of validity, if work is not
completed and the guarantee is not extended, 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 from the selected Bidder’s failure to complete his obligations
under the contract.
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17. SINGLE POINT OF CONTACT The selected bidder should have a local office in India and has to provide details of
single point of contact viz. name, designation, address, e-mail address,
telephone/mobile no., etc. Escalation matrix should also be provided with full details.
18. APPLICABLE LAW AND JURISDICTION OF COURT The Contract with the selected bidder shall be governed in accordance with the Laws of
India for the time being in force and as amended from time to time and will be subject to
the exclusive jurisdiction of Courts at Mumbai.
19. LIQUIDATED DAMAGES (LD) If the selected bidder fails to complete the due performance of the contract in
accordance with the specifications and conditions agreed during the final contract
negotiation as per para 36 of this section, the Bank reserves the right to recover penalty
/ liquidated damages @ 0.5% of the contract value per week or part thereof, subject to a
maximum of 10% of contract value as Liquidated Damages for non-
performance/delayed performance.
The Bank shall have the sole discretion in adjudging such failure/ breach and such
finding shall be unimpeachable.
LD is not applicable for reasons attributable to the Bank and Force Majeure. However, it
is the responsibility of the bidder to prove that the delay is attributed to the Bank or
Force Majeure. The bidder shall submit the proof authenticated by the bidder and
Bank’s official that the delay is attributed to the Bank or Force Majeure along with the
bills requesting payment. If the delay is attributable to the bank, or Force Majeure, or
any other circumstances beyond the control of the Consultant then the bank will extend
the period of contract to the extent of delay without charging any Liquidated Damage.
20. PROFESSIONAL LIABLITY INSURANCE The Consultant shall obtain an insurance policy covering Professional Indemnity Risk to
the minimum extent of @10% of the professional fees and endorse such policy in
Bank’s favour and /or otherwise make the claim, if any, under the policy payable directly
to the Bank by the Insurance Company till the completion of the project.
All the disputes arising out of or in connection with the agreement shall be deemed to
have arisen in Mumbai. Only the courts/s in Mumbai shall have the jurisdiction to
determine the same to the exclusion of all other courts’.
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21. FORCE MAJEURE Any failure or delay by selected bidder or Bank in the performance of its obligations, to
the extent due to any failure or delay caused by fire, flood, earthquake or similar
elements of nature, or acts of God, war, terrorism, riots, civil disorders, rebellions or
revolutions, acts of governmental authorities or other events beyond the reasonable
control of non-performing party, is not a default or a ground for termination. The affected
party shall notify the other party within reasonable time period of the occurrence of a
Force Majeure Event.
22. AUTHORIZED SIGNATORY The selected bidder shall indicate the authorized signatories who can discuss and
correspond with the Bank (Annexure 17), 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 Company Secretary/Director,
authorizing an official or officials of the company or a Power of Attorney copy to discuss,
sign agreements/contracts with the Bank. The bidder shall furnish proof of signature
identification for above purposes as required by the Bank.
23. INDEMNITY The Bidder shall indemnify Bank and keep indemnified for any loss or damage, cost or
consequences that Bank may sustain, suffer or incur on account of violation of patent,
trademarks, etc. by the bidder. The bidder shall always remain liable to the Bank for any
losses suffered by the Bank due to any technical error or negligence or fault on the part
of the bidder, and the bidder also shall indemnify the Bank for the same. The total
liability of the selected bidder under this clause and contract shall not exceed the total
contract value. (Annexure 7).
24. ERASERS OR ALTERATIONS:
The offers containing erasers or alterations may not be considered. There should be no
hand written material corrections or alterations in the offer. Technical details must be
completely filled up. Correct technical information of the services being offered must be
filled in. Filling up of the information using terms such as OK, ACCEPTED, NOTED, AS
GIVEN IN BROCHURE/MANUAL or any Special Characters such as -, “, @, _,# is not
acceptable. The Bank may treat offers not adhering to these guidelines as
unacceptable.
25. RIGHT TO REJECT BIDS Bank reserves the absolute and unconditional right to reject the response to this RFP if
it is not in accordance with its requirements and no correspondence will be entertained
by the Bank in the matter. The bid is liable to be rejected if
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• It is not in conformity with the instructions mentioned in this RFP document.
• It is not accompanied by the requisite Application Money & EMD.
• It is not properly/duly signed.
• It is received through Telex / Telegram/ Fax/E-mail.
• It is received after expiry of the due date and time.
• It is incomplete including non-furnishing the required documents.
• It is evasive or contains incorrect information.
• There is canvassing of any kind.
• It is submitted anywhere other than the place mentioned under Section-I,
point 12.4.
26. ASSIGNMENT Neither the contract nor any rights granted under the contract may be sold, leased,
assigned, or otherwise transferred, in whole or in part, by the Consultant without
advance written consent of the bank and any such sale, lease, assignment or otherwise
transfer shall be void and of no effect.
27. NON - SOLICITATION The Consultant, during the term of the contract and for a period of two years thereafter
shall not without the express written consent of the Bank, directly or indirectly: a) recruit,
hire, appoint or engage or attempt to recruit, hire, appoint or engage or discuss
employment with or otherwise utilize the services of any person who has been an
employee or associate or engaged in any capacity, by the Bank in rendering services in
relation to the contract; or b) induce any person who shall have been an employee or
associate of the or Bank at any time to terminate his/ her relationship with the Bank.
28. NO EMPLOYER-EMPLOYEE RELATIONSHIP The Consultant or any of its holding/subsidiary/joint-venture/ affiliate / group / client
companies or any of their employees / officers / staff / personnel /
representatives/agents shall not, under any circumstances, be deemed to have any
employer-employee relationship with the Bank or any of its employees/officers/
staff/representatives/ personnel/agents.
28 (A). The relationship between the Bank and bidder shall not constitute any
partnership but would be an arm’s length relationship.
29. VICARIOUS LIABILITY The Consultant shall be the principal employer of the employees, agents, contractors,
subcontractors etc., engaged by the Consultant and shall be vicariously liable for all the
acts, deeds, matters or things, whether the same is within the scope of power or outside
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the scope of power, vested under the contract. No right of any employment in the Bank
shall accrue or arise, by virtue of engagement of employees, agents, contractors,
subcontractors etc., by the Consultant, for any assignment under the contract. All
remuneration, claims, wages dues etc., of such employees, agents, contractors,
subcontractors etc., of the Consultant shall be paid by the Consultant alone and the
Bank shall not have any direct or indirect liability or obligation, to pay any charges,
claims or wages of any of the Consultant’s employees, agents, contractors,
subcontractors etc. The Consultant shall agree to hold the Bank, its successors, assigns
and administrators fully indemnified, and harmless against loss or liability, claims,
actions or proceedings, if any, whatsoever nature that may arise or caused to the Bank
through the action of Consultant’s employees, agents, contractors, subcontractors etc.
30. 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.
31. CANCELLATION OF CONTRACT AND COMPENSATION
31.1. By the Bank
The Bank reserves the right to cancel the contract of the selected bidder and recover
expenditure incurred by the Bank in any of the following circumstances. The Bank would
provide 30 days notice to rectify any breach/ unsatisfactory progress.
• The selected bidder commits a breach of any of the terms and conditions of the
bid/contract.
• The bidder becomes insolvent or goes into liquidation voluntarily or otherwise.
• An attachment is levied or continues to be levied for a period of 7 days upon effects
of the bid.
• The progress regarding execution of the contract, made by the selected bidder is
found to be unsatisfactory.
• If deductions on account of penalty and liquidated damages exceeds more than 10%
of the total contract price.
• If the selected bidder fails to complete the due performance of the contract in
accordance with the agreed terms and conditions.
After the award of the contract, if the selected bidder does not perform satisfactorily or
delays execution of the contract, the Bank reserves the right to get the balance contract
executed by another party of its choice by giving one month’s notice for the same. In
this event, the selected bidder is bound to make good the additional expenditure, which
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the Bank may have to incur to carry out for the execution of the balance of the contract.
This clause is also applicable, if for any reason, the contract is cancelled.
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/or invoking Bank Guarantee, if any, under this contract.
31.2. By the Consultant
The consultant reserves the right to terminate the contract on the following grounds
giving three months prior notice in writing to the Bank:
(i) If the Bank fails to make the payment due under the contract for a period of 30
days after notice in writing is given by the Consultant to the Bank to pay the
same.
(ii) If any proceedings are initiated under the Banking Regulation Act, 1949 against
the Bank for winding up of the same.
32. DISPUTE RESOLUTION If a dispute, controversy or claim arises out of or relates to the contract, or breach,
termination or invalidity thereof, and if such dispute, controversy or claim cannot be
settled and resolved by the Parties through discussion and negotiation, within a period
of 30 days from initiation thereof, then the Parties shall refer such dispute to arbitration.
Both Parties may agree upon a single arbitrator or each Party shall appoint one
arbitrator and the two appointed arbitrators shall thereupon appoint a third arbitrator.
The arbitration shall be conducted in English and a written order shall be prepared. The
venue of the arbitration shall be Mumbai. The arbitration shall be held in accordance
with the Arbitration and Conciliation Act, 1996. The decision of the arbitrator shall be
final and binding upon the Parties, provided that each Party shall at all times be entitled
to obtain equitable, injunctive or similar relief from any court having jurisdiction in order
to protect its intellectual property and confidential information.
The arbitral tribunal shall be empowered to pass interim/preliminary and final award.
The arbitral tribunal shall also be empowered to grant relief in nature of money decree,
decree for damages, decree for mandatory and permanent injunction, decree for
specific performance of contract or such other relief, as may suffice the ends of justice.
The cost of arbitration proceedings shall be borne equally by the parties.
32.1. If any part or covenant contained in this RFP is found to be void, the other covenants shall remain unprejudiced by such vice and shall be enforceable.
32.2. The clause 4 of Section 1 and clauses 7.3.3, 16, 19, 20, 23 and 33 of Section 3 and all other related clauses shall survive the termination of RFP.
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32.3. Non assertion of bank’s rights under the RFP or any other forbearance shall not be construed as waiver thereof.
33. CONSULTANT’S SELECTION/EVALUATION PROCESS
33.1. Evaluation of Technical Bid
First, Technical bid documents will be examined from the Eligibility Criteria angle.
Bidders, who fulfill the eligibility criteria conditions related to bidder’s financial stability
and experience fully as mentioned in point no. 4 of Section III, their bids only will be
taken up for further evaluation/selection process rejecting the remaining bids.
The evaluation/selection process will be done with combination of, technical
competence and commercial aspects as detailed here below. A maximum of 100 marks
will be allocated for the technical bid. The evaluation of functional and technical
capabilities of the bidders of this RFP will be completed first as per the following
guidelines.
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.
In case there is only one bidder having technical score of 70 or more, the Bank may, at
its discretion, also consider the next highest technical score with minimum score of 60.
In case, none of the participating bidders qualify on technical criteria and reach or
exceed the cut-off score of 70, then the Bank, at its sole discretion, may qualify two
bidders on the basis of the top 2 scores with a minimum score of 60.
The evaluation of technical proposals, among other things, will be based on the
following:
• Prior experience of the bidder in undertaking projects of similar nature.
• Professional qualifications and experience of the key staff proposed/ identified
for this assignment.
• Methodology/Approach proposed for accomplishing the proposed project.
• Various stages of technical evaluation are presented below:
• Matching the eligibility criteria as indicated under Para 4 of this section.
• Short-listing of the bidders based on the fully matched criteria
• Paper evaluation based on response
• Arriving at the final score on technical proposal after Presentation - cum -
Interview.
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33.2. Presentation-cum Interview
The short-listed bidders of this RFP have to give presentation/interactions before panel
of representatives of Bank on the methodology/ approach, time frame for various
activities, strengths of the bidders in implementation of the proposed Enterprise-wide
Integrated Risk Management System (EIRMS).
The technical competence and capability of the bidder should be clearly reflected in the
presentation. If any short listed bidder fails to make such presentation, they will be
eliminated from the selection process. It may be noted that the marks awarded for
“methodology/approach proposed for carrying out the proposed project” while
evaluating the technical proposal initially may be changed by the Bank after the
presentations/interactions.
At the sole discretion and determination of the Bank, the Bank may add any other
relevant criteria for evaluating the proposals received in response to this RFP.
Bank may, at its sole discretion, decide to seek more information from the Respondents
in order to normalize the bids. However, Respondents will be notified separately, if such
normalization exercise as part of the technical evaluation is resorted to.
The commercial proposals of technically short listed bidders will then be opened.
33.3. Commercial Bid Evaluation Criteria
The commercial bids will be subjected to following evaluation process.
A comprehensive “Score (S)” will be arrived at after considering the commercial quote
and the marks obtained in technical evaluation with relative weights of 20% for
commercials and 80% for technicals. The bidder with the highest score will be declared
successful:
Computation Methodology for arriving at “Least Price / Least Quote”
Bank will give 80% 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 0.2.
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S.No. Bidder Technical
Evaluation
Marks (T)
Commercia
lBid Price
(C)
(C Low / C)
* 0.20
(T / T High) *
0.80
Score (S)
1 ABC 95 71 0.85 * 0.20=
0.17
1.00 * 0.80 =
0.80
0.97
2 XYZ 85 65 0.92 * 0.20=
0.18
0.89 * 0.80 =
0.71
0.89
3 UVW 80 60 1.00 * 0.20=
0.20
0.84 * 0.80 =
0.67
0.87
In the above example, ABC, with the highest score becomes the successful Least Price
bidder. The price quoted by the Least Price bidder will be called “Least Price”.
The proposal securing the highest combined marks and ranked L-1 will be invited for
negotiations, if required, and shall be recommended for award of contract.
The Bank's decision in respect of evaluation methodology and short listing of bidders
will be final and no claims, whatsoever in this respect, shall be entertained.
The Bank reserves the right to float the RFP again. The Bank shall not incur any liability
to the bidder(s) on account of reissue of RFP. Bank shall not be obliged to inform the
bidder(s) of the grounds for the Bank's rejection. The Bank reserves the right to modify
any items of the scope of
the RFP. The RFP may be reissued on account of following;
a) If none of the bidders qualify in the technical bid evaluation.
b) If only one bidder qualifies in the technical bid evaluation.
c) If selected bidder fails to execute the Consultancy Agreement within the time limit
stipulated.
Any decision in this regard by Bank shall be final, conclusive and binding on the
bidders.
Bank may call upon the ultimate short-listed bidder to make a detailed presentation to
the Board of Directors of the Bank.
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34) TECHNICAL EVALUATION CRITERIA
TECHNICAL EVALUATION
S. No PARAMETER WEIGHT SCORE 1 Consultancy 65%
1.1. Credit Risk Consultancy
Credit Risk Management Consultancy assignments handled in Indian banks Covering at least
a. Basel II and data Gap Analysis b. Rating Model Evaluation c. PD, LGD & EAD Modeling and d. Enhancement of credit risk related policies
10%
Handled at least 5 assignments on Credit risk management consultancy services (Minimum - 2 PSU Banks)
10
Handled a total of 4 assignments on Credit risk management consultancy services (Minimum of 1 PSU Banks)
8
Handled a total of 3 assignments on Credit risk management consultancy services
4
Handled a total of 2 assignments on Credit risk management consultancy services
2
Handled less than 2 assignment on Credit risk management consultancy services
0
1.2 Operational Risk Consultancy
Operational Risk Management Consultancy assignments handled in Indian banks Covering at least
a. Current state assessment b. RCSA Framework & implementation for key areas c. KRI framework & implementation for key areas d. loss data management e. Scenario assessment framework & implementation f. Development / validation of AMA Quantification
framework-
10%
Handled at least 5 assignments on Operational risk management consultancy services (Minimum - 2 PSU Banks)
10
Handled a total of 4 assignments on Operational risk management consultancy services (Minimum of 1 PSU Banks)
8
Handled a total of 3 assignments on Operational risk management consultancy services
4
Handled a total of 2 assignments on Operational risk management consultancy services
2
Handled less than 2 assignment on Operational risk management consultancy services
0
1.3 Market Risk Consultancy
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Market Risk Management Consultancy assignments handled in Indian banks Covering at least
a. Gap Analysis for Advanced Approaches b. Market Risk management framework c. Validation of valuation and VaR models d. Back testing e. Stress testing & pillar 2 aspects
10%
Handled at least 5 assignments on Market risk management consultancy services (Minimum - 2 PSU Banks)
10
Handled a total of 4 assignments on Market risk management consultancy services (Minimum of 1 PSU Banks)
8
Handled a total of 3 assignments on Market risk management consultancy services
4
Handled a total of 2 assignments on Market risk management consultancy services
2
Handled less than 2 assignment on Market risk management consultancy services
0
1.4 Enterprise Risk Consultancy
Enterprise risk management consultancy assignments handled in Indian banks covering at least
a. Review and enhancement of ICAAP framework b. Risk appetite c. Business and Risk Framework d. Capital planning & budgeting e. Risk aggregation & Use Test
15%
Handled at least 5 assignments on Enterprise risk management consultancy services (Minimum of 2 PSU Banks)
15
Handled a total of 4 assignments on Enterprise risk management consultancy services (Minimum of 1 PSU Banks)
10
Handled a total of 3 assignments on Enterprise risk management consultancy services
5
Handled a total of 2 assignments on Enterprise risk management consultancy services
3
Handled less than 2 assignment on Enterprise risk management consultancy services
0
1.4 Other scope
10%
Handled at least 5 assignments on ALM / liquidity services (Minimum of 2 PSU Banks)
10
Handled a total of 5 assignments on ALM / liquidity services (Minimum of 1 PSU Banks)
8
Handled a total of 3 assignments on ALM / liquidity services
4
Handled a total of 2 assignments on ALM / liquidity services
2
Handled less than 2 assignment on ALM / liquidity services 0
1.5 Vendor selection 10% Handled at least 8 assignments on Vendor selection services for
risk management systems (Minimum of 2 PSU Banks) 10
75
Handled a total of 5 assignments on Vendor selection services for risk management systems (Minimum of 1PSU Banks)
8
Handled a total of 3 assignments on Vendor selection services for risk management systems
4
Handled a total of 2 assignments on Vendor selection services for risk management systems
2
Handled less than 2 assignment on Vendor selection services for risk management systems
0
2 Confidential Reports from existing clients 10%
Satisfactory report from the organization where consultancy was provided to a Bank. Scoring shall be done on following parameters:
a. Unacceptable - 0% b. Below Average - 25% c. Average – 50% d. above average – 75% e. Excellent – 100%
10%
10
3 Experience and certifications of team members 5%
3.1 Experience of Project Leader 2.5%
Having work experience in risk management functions above 10 years
2.5
having work experience in risk management functions- 7 years & above and up to 10 years
2
having work experience in risk management functions- 5 years & above and up to 7 years
1.5
Having work experience in risk management functions less than 5 years
1
3.2 Technical skills of the team members 2.5%
Excellent- handled more than 5 projects in Risk Management. 2.5 Very Good- handled 3 to 5 projects. 2
Good- handled 2 projects. 1.5 Average- handled one project. 1 4 Experience of assistance in RBI application for migration to
advanced approaches 5%
Assistance in application for IRB, IMA, AMA/ TSA for more than 3 banks (Minimum of 1 PSU Bank)
5
Assistance in application for IRB, IMA, AMA/ TSA for 2-3 banks 3
Assistance in application for IRB, IMA, AMA/ TSA for 1-2 banks 1 5 Approach and Methodology 10%
5.1 Approach and Methodology for executing the consultancy assignment
5%
(Scoring shall be done based on approach and methodology proposed by bidder for executing the consulting scope of work)
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5.2 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%
(Scoring shall be done based on the Presentation by the bidders)
6 Experience with Government of India / RBI / IBA on risk management and capital initiatives relating to Basel frameworks for Banking sectors
5%
More than 1 assignment 5
One assignment 2
35) PROJECT TIMELINES The scope mentioned in Section III is only major indicative scope that has been
covered. The scope may increase as and when any guidelines/documents are issued
by the Regulators or any Authority during the consultancy period which has to be
complied by the Bank.
The Responsibilities mentioned in Section III has to be covered during implementation
of various phases as indicated by the bank.
The selected bidder shall furnish a schedule of implementation of the contract of
consultancy encompassing its entire scope, discuss the same with the bank officials
and arrive finally at a mutually agreed implementation schedule. The Bank and the
Consultant shall be bound by the Implementation schedule so agreed.
All legal formats annexed herewith are subject to confirmation from legal department of the Bank
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Annexure 1 BID FORM Ref. No.: (RFP No................) Date: TO: Dena Bank, Risk Management Department, Dena Corporate Centre, C-10, G Block, BKC Bandra (E), Mumbai 400 051 Having examined the RFP (Ref. No.: …………………) including all annexure, the receipt of which is hereby duly acknowledged, we, the undersigned, offer to deliver services in conformity with the said RFP and in accordance with our proposal and commercial bid and made part of this bid.
We undertake, if our bid is accepted, to deliver services and complete the project in accordance with the scheduled time lines.
If our bid is accepted, we will provide the guarantee of a Bank in a sum equivalent to 10% of the contract price for the due performance of the Contract in the form prescribed by the Bank.
We agree to abide by this bid for the period of 180 days from the date fixed for Technical bid opening and it shall remain binding upon us and may be accepted at any time before the expiration of that period.
Until a formal contract is prepared and executed, this bid, together with the bank’s written acceptance thereof and bank’s notification of award, shall constitute a binding Contract between us.
We undertake that, in competing for (and, if the award is made to us, in executing) the contact, we will strictly observe the laws against fraud and corruption in force in India namely “Prevention of Corruption Act 1988”.
We understand that the bank is not bound to accept the lowest or any bid the bank may receive. Place : Dated this _____________ day of _____________ 2013. ----------------------------- ---------------------------- (Signature) (In the Capacity of) Duly authorised to sign bid for and on behalf of (Name & Address of Bidder) ________________________________
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Annexure – 2
ELIGIBILITY CRITERIA
Sl No Eligibility Criteria. Details of Proofs 1 Should be either a Government Organization/
PSU/PSE/partnership firm or a limited Company under Indian Laws or/and an autonomous Institution approved by GOI/RBI promoted.
Reference of Act/Notification, Registration Certificate, etc
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. 15.00 crores during last three financial years for its India located office. (Not applicable for non-profit making organizations).
5 The firm should not have been blacklisted / barred / disqualified by any regulator / statutory body at present.
Self Declaration
6 Should have been assigned / undertaken consultancy for at least 1 scheduled commercial bank with business mix of Rs.1.5 lakh crore or more as of 31.03.2013 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. * Appropriate documentary evidence.
7 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
8 The bidder should have at least twenty five (25) professionals with relevant qualifications like B Tech / M. Tech / MCA / OR, CA, MBA, FRM, PRM, Statistician, CPA specialist permanently employed by them These professionals should have requisite experience in relevant fields for at least 2 years, who have
Confirmation from the Vendor and profile of team members.
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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 public sector bank in India.
9 Joint bidders will not be allowed Self Declaration
* The credential letters issued by other Banks on their letter head signed by an
executive not less than the rank DGM (Deputy General Manager) working in Risk
Management Department at Head Office among other things should preferably cover
the following:
i. The time frame originally agreed upon to complete the assignment and whether
the assignment was completed accordingly and details of time over runs if any.
ii. Value of the assignment in monetary terms and whether there were any cost
overruns.
iii. Whether the work was completed as per the requirements of the Bank, being
implemented successfully and the Bank is satisfied with the results.
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Annexure – 3
Technical Proposal format: Particulars to be provided by the bidder in the
technical proposal –
S. No
Particulars Details furnished by the bidder
1 Name of the bidder
2 Year of establishment and constitution. Certified copy of “Partnership Deed” or “Certificate of Incorporation / commencement of business”, Memorandum of Association, Articles of Association should be submitted as the case may be.
3 Location of Registered Office /Corporate Office and address
4 Mailing address of the bidder
5 Names and designations of the persons authorized to make commitments to the Bank.
6 Telephone and fax numbers of contact persons
7 E-mail addresses of contact persons
8 Details of: Description of business and business background Service Profile & client profile Domestic & Int’l presence Alliance and joint ventures.
9 Whether the bidder is in to Risk consulting business, if yes then mention the period (evidence to be enclosed). Whether the consulting process conforms to ISO 9001(2000) or any other international standards in the areas of risk if so, furnish details of compliance.
10 Details of experience/knowledge possessed in the areas of Risk Management, Role and Responsibility definition, Co-ordination across multiple teams, Project risk analysis and containment.
11 Gross annual turnover of the bidder during last three financial years for its India located office. (not of the group) (Not applicable for non-profit making organizations). (Balance Sheet/P&L statement (Audited). Alternatively a suitable Chartered Accountant Certificate may be furnished)
12 Profit of the bidder during last three financial years for its India located office (not of the group) (Not applicable for non-profit making organizations). (Balance Sheet/P&L statement (Audited). Alternatively a suitable Chartered Accountant Certificate may be furnished)
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13 Experience of assignments executed successfully as Technical Consultant, for implementing end to end Risk Management System Indian Bank and International Banks that would included: Defining strategy and technical requirements, designing risk management architecture, security architecture, project management and implementation, assisting in vendor(s) evaluation (software) and selection process. (Name of the bank, time taken for execution of the assignment and documentary proofs for above from the bank are to be furnished)
14 Details of any other similar assignments executed by the bidder in India/Internationally. (Name of the bank, time taken for execution of the assignment and documentary proofs for above from the bank are to be furnished)
15 Details of the similar assignments on hand as on date (Name of the bank, time projected for execution of the assignment and documentary proofs from the bank are to be furnished)
16 Name of the Engagement Manager & Overall person responsible (team leader) identified for this assignment and their professional qualifications and experience/expertise Details of similar assignments handled by the said team leader. Documentary proofs for all the assertions are to be enclosed
As per annexure 5
17 Names of the other team members identified for this assignment and their professional qualifications and experience/expertise. (Should possess qualifications as mentioned in the RFP) Details of similar (Credit/Market/Operational Risk/ICAAP) assignments handled by the said team members. Documentary proofs for all the assertions are to be enclosed.
As per annexure 5
18 Estimated work plan and time schedules for providing services for this assignment
19 Details of inputs, infrastructure requirements required by the bidder to execute this assignment.
20 Details of the bidder’s proposed methodology/approach for providing services to the Bank with specific reference to the scope of work.
21 Details of deliverables, other than the Deliverables specified by the Bank, the bidder proposes with specific reference to the scope of work as mentioned in section III of the Project scope
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Annexure- 4
Commercial Bid
(To be included in Commercial Proposal Envelope) Date: .............................. Sir, Request for Proposal Appointment of Consultant for Implementation Advance Approaches of Basel II guidelines in Enterprise wide Integrated Risk Management System (EIRMS) Reference Number DB/EIRMS/RFP/2013-14/01 In terms of the above-mentioned RFP document we submit herewith the commercial bid (fees) for the assignment proposed by the Bank as Consultant.
CONSULTANCY FEES (Rs.) **
SERVICE TAXES
TOTAL (Rs.)
(1) (2) (1+2)
In figures
In words
NOTE: SERVICE TAX AS APPLICABLE AT THE TIME OF RAISING THE BILL SHALL BE PAID. ** Please state the assumptions and specifications considered phase-wise in Annexure VI to arrive at the total fees stated here. TERMS AND CONDITIONS 1) The above quoted fee is for all the phases. 2) We undertake to deliver all the deliverables as in this RFP document. 3) Bank will deduct tax (TDS) while releasing payment, if applicable as per the law. Dated this ....... day of ............................ 2013. ____________________ _________________________ (Signature) (in the capacity of) Duly authorized to sign Proposal for and on behalf of ________________
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Annexure 5
Details of Persons who will form the team for the proposed
assignment 1. Name of the Person : 2. Office Address : 3. E-mail ID : 4. Phone Number Office : Mobile : 5. Date since working in the Firm : 6. Professional Qualifications : 7. Present Designation : 8. Experience : Sl. No.
Nature of EIRMS assignment
Brief Details of the EIRMS assignment and the Organization where assignment was undertaken
Period
From To
1 2 3 4 5
Note: - Format is of minimum requirements and is to be compulsorily furnished.
Respondents may furnish additional details, if any.
Duly authorized to sign Proposal for and on behalf of
_____________________________________
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Annexure-6
Bidder’s proposed methodology / approach for providing services to the Bank with respect to the scope of consultancy work: (A) Proposed methodology / approach: (B) Details of deliverables specified by the bank, the bidder proposes not to undertake (with specific reference to the scope of work) : (C) Details of deliverables, other than the deliverables specified by the bank, the bidder proposes with specific reference to the scope of work: Place:
Date: SEAL (Authorized Signatory)
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Annexure 7
DEED OF INDEMNITY This Deed of Indemnity executed at Mumbai on the -------------day of -------------- by ----------- ---------------------, a company registered under the Companies Act, 1956 and having its registered office at -----------------------/M/s.---------------------------a partnership firm/company having its registered office at ---- -------------------- (hereinafter called "the Obligor" which expression shall unless it be repugnant to the subject, context or meaning thereof shall be deemed to mean and include its successors). IN FAVOUR OF Dena Bank, a Government of India Undertaking, within the meaning of Banking Companies (Acquisition & Transfer of Undertakings) Act, 1980 and having its Head Office at Dena Corporate Centre, C-10, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400 051 (hereinafter called "Dena Bank" 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) WHEREAS The Obligor has: a) Offered to do for Dena Bank/Indemnified, EIRMS implementation at Mumbai
(hereinafter referred to as EIRMS implementation/Services) as defined in the Agreement dated-----------------------made between the Obligor and Dena Bank/Indemnified (the Agreement/Contract) and the Bid documents and other related documents (the said documents) subject to certain terms, conditions, covenants, provisions and stipulations contained therein.
b) Represented and warranted that they have all permissions, consents, approvals from all authorities, both regulatory and non-regulatory, for performing the Services/doing the EIRMS implementation to Dena Bank/Indemnified contemplated under the said documents and further represented and warranted that the EIRMS implementation at the Dena Bank do not violate any provisions of the applicable laws, regulations or guidelines including legal, environmental under the various labour and industrial laws. In case there is any violation of any law, rules or regulation, which is capable of being remedied, the same will be got remedied immediately during the period of Services/tenure of the Agreement/Contract to the satisfaction of Dena Bank;
c) Represented and warranted that they are authorized and legally and otherwise entitled and competent to enter into such contractual arrangement(s) with Dena Bank/Indemnified under the said documents; relying and based on the aforesaid
86
representations and warranties of the Obligor, Dena Bank/Indemnified has agreed to avail the Services of the Obligor on the terms and conditions contained in Agreement with the Obligor;
One of the conditions of the Agreement/Contract and the said documents is that the Obligor is required to furnish an indemnity in favour of Dena Bank indemnifying the latter against any loss, damages or claims arising out of any violations of the applicable laws, regulations, guidelines during the rendering/performing of the Services/EIRMS implementation envisaged under the said documents as also for breach committed by the Obligor on account of misconduct, omission and negligence by the Obligor.
In pursuance thereof, the Obligor has agreed to furnish an indemnity in the form and manner and to the satisfaction of Dena Bank as hereinafter appearing.
NOW THIS DEED WITNESSETH AS UNDER:- 1. In consideration of Dena Bank/Indemnified having agreed to award the Bid and the
aforesaid assignment of providing Services/EIRMS implementation to the Obligor on the terms and conditions contained in the Agreement/Contract and the said documents, more particularly described and stated therein, the Obligor do hereby agree and undertake that:-
a) The Obligor shall, at all times hereinafter, save and keep Dena Bank harmless and
indemnified, including its respective directors, officers, agents, representatives, and employees, etc. and keep them identified from and against any claim, demand, losses, liabilities or expenses of any nature and kind whatsoever and by whomsoever made in respect of Services/EIRMS implementation or the said documents and any damage caused from and against all suits and other actions that may be threatened, instituted, taken or preferred against Dena Bank/Indemnified including its respective directors, officers, agents, representatives, and employees, etc. by whomsoever and all losses, damages, costs, charges and expenses that Dena Bank/Indemnified including its agents, representatives and employees, etc. may incur by reason or any claim/demand made by any claimant for any reason whatsoever or by anybody claiming under them or otherwise for any losses, damages or claims or claims arising out of all kinds of accidents, destruction, deliberate or otherwise, direct or indirect, from those arising out of violation of applicable laws, regulations, guidelines and also from the damages, if any, arising from fraudulent or criminal acts as well or any omissions, which may occur while performing the Services or otherwise under the said documents.
b) The Obligor further agrees and undertakes that the Obligor shall, during the
contractual arrangements under the said documents, ensure that all the permissions, authorizations, consents are obtained from the local and/or municipal
87
and/or governmental authorities, as may be required under the applicable laws, regulations, guidelines, orders framed or issued by any appropriate authorities.
c) If any additional approval, consent or permission is required by the Obligor to
execute and perform the Agreement or Services/EIRMS implementation under the said documents, they shall procure the same and/or comply with the conditions stipulated by the concerned authorities without any delay.
d) The obligations of the Obligor herein are irrevocable, absolute and unconditional,
in each case irrespective of the value, genuineness, validity, regularity or enforceability of the aforesaid agreement or the insolvency, bankruptcy, re-organization, dissolution, liquidation or change in ownership of Dena Bank or Obligor or any other circumstance whatsoever which might otherwise constitute a discharge or defence of Dena Bank/Indemnified.
e) The obligations of the Obligor under this deed shall not be affected by any act,
omission, matter or thing, would reduce, release or prejudice the Obligor from any of the obligations under this indemnity or prejudice or diminish the obligations in whole or in part, including in law, equity or contract (whether or not known to it, or to Dena Bank).
2. This Indemnity shall survive the Agreement 3. Any notice, request or other communication to be given or made under this
indemnity shall be in writing addressed to either party at the address stated in the Agreement and or as stated above.
4. This Indemnity shall be governed by, and construed in accordance with, the laws or
India. The Obligor irrevocably agrees that any legal action, suit or proceedings arising out of or relating to any of this indemnity may be brought in the Courts/Tribunals at Mumbai. Final judgment against the Obligor in any such action, suit or proceeding shall be conclusive and may be exclusively enforced in any other jurisdiction, by suit on the judgment, a certified copy of which shall be conclusive evidence of the judgment, or in any other manner provided by law. By the execution of this indemnity, the Obligor irrevocably submits to the exclusive jurisdiction of such Court/Tribunal in any such action, suit or proceeding.
5. Dena Bank/Indemnified may assign or transfer or any part of its interest herein to
any other person. Obligor shall not assign or transfer any of its right or obligations under this indemnity, except with the prior written consent of Dena Bank/Indemnified.
IN WITNESS WHEREOF the Obligor has signed these presents on the day, month and year first above written. Signed and Delivered on behalf of
88
---------------------------- By the hand of-------------------------- -------------------,-the authorized official of the Obligor. Notes: To be stamped as an indemnity bond in accordance with the local stamp laws at the place of execution.
Relevant authorizations to be collected in case of (a) company – certified copy of the relevant board resolutions, power of attorney, certified copy of the latest memorandum and articles of association be obtained (b) partnership – copy of the partnership deed together with the registration extract evidencing registration of the partnership firm, letter of authorization/mandate from the partnership firm authorizing the execution of documents on behalf of the partnership firm, power of attorney, if any.
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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: Dena Bank, a body corporate, established under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 and having its Registered Office at Dena Corporate Centre, C-10, G Block, Bandra Kurla Complex, Bandra (E), Mumbai 400 051 (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 Enterprise wide 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 / Systems / EIRMS, more particularly described in the Schedule/Annexure to the said documents (hereinafter collectively referred to as “the Services”), subject to payment of the contract price as stated in the
90
said documents and also subject to the terms, conditions, covenants, provisions and stipulations contained the said documents. 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 10% 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 10% 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 observed and performed of 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 observed and performed 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 ………….. 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.
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(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 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 guarantee will remain in force up to 60 months 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 Mumbai where the Bank has its Head 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) II. This Bank Guarantee shall be valid up to……………. III. 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 ………………… (mention validity period + claim period) 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,
92
______________________, by the hand of Shri.__________, its authorised official.
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Annexure 9
CONTRACT FORM Non-Judicial Stamp Paper of appropriate value
CONTRACT NUMBER: THIS AGREEMENT made the _________ day of ______, 20___ Between DENA BANK (hereinafter “the Bank”) of one part and __________ (Name of Selected Consultant) of ____________ (City and Country of Consultant) (hereinafter “the Consultant”) of the other part: WHEREAS the Bank is desirous that certain consultancy services should be provided by the Consultant, viz. ________________ ________________ (Brief description Services) and has accepted a bid by the Consultant for supply of consultancy services to meet its requirement from time to time. NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
1. In this Agreement words and expressions shall have the same meanings as are respectively assigned to them in the Conditions of Contract referred to.
2. The following documents shall be deemed to form and be read and construed as part of this Agreement, viz. :
(a) The RFP for appointment of consultant for implementing EIRMS in the Bank (b) The Bid form and price (i.e. consultancy fee) submitted by the bidder and
subsequent amendments made into it as accepted by the bank. (c) the schedule of requirements (i.e. EIRMS consultancy services) (d) The Bank’s Notification for appointment of Consultant for implementing EIRMS
in the bank. (e) Letter of offer
3. In consideration of the payments to be made by the Bank to the Consultant in terms of Letter of offer for having consultancy services placed by Head Office of the Bank, the Consultant hereby covenants with the Bank to provide the consultancy services and to remedy defects therein in conformity in all respects with the provisions of the contract.
4. The Bank hereby covenants to pay the Consultant in consideration of the provision
of the consultancy services and the remedying of defects therein, the Letter of offer Price or such other sum as may become payable under the provisions of the Contract at the times and in the manner prescribed by the Contract.
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The details of the EIRMS consultancy services which the Consultant shall be required to provide to the Bank from time to time in terms of Letter of offer for having consultancy services that will be placed by Head Office of the Bank are as under:
< Details as per scope of consultancy defined in Section III of RFP > IN WITNESS whereof the parties hereto have caused this Agreement to be executed in accordance with their respective laws the day and year first above written. Signed, sealed and Delivered by the Said ________________________ (For the Consultant) in presence of _______________________ Signed, sealed and Delivered by the Said ________________________ (For the Bank) in presence of ______________________
95
Annexure: 10
Certificate of Consultations from Banks/Financial Institutions (to be included with technical bid) (On the letter Head of the Company/Bank with designation of the authority issuing the same) 1.0Name of the Company/Bank
(client name)
2.0Full Address of the Company/Bank with PIN code
3.0 Brief description of the nature of business/ process
4.0Contact details (At least two contact details of senior staff of the client are to be provided for each reference)
Consultancy service provided (may attach a separate write up)
6.0 Duration of assignment including start date and end date
7.0 Approximate value of service (in rupees) (Optional)
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Sl. No.
Details Yes Partially No
8.1 Tasks undertaken by the consultants in the Company / Bank
8.1.1
Implementation of Advance Approaches of Basel II guidelines in Bank
8.1.2
Framework for compliance with all qualifying criteria for migrating to Advance Approaches of Basel II guidelines
8.1.3
Accounting diagnosis about the impact of Advance Approaches of Basel II on key financial numbers and ratios, process and systems.
8.1.4
Assist the Company/Bank in planning a way for forward, focusing an operational issues, resources and project management
8.1.5
Analyze existing Information System environment and help implement changes required for moving over to Advance Approaches of Basel II.
8.1.6
Training the trainers and officials of the company/Bank and subsidiaries, joint ventures and associates
Annexure: 11
97
Reference Site Details-1 We give below the reference site details: Name of the Company/Bank (client name)
Full Address of the Company/Bank with PIN code
Brief description of the nature of business/ process
Contact details (At least two contact details of senior staff of the client are to be provided for each reference)
Contact 1 Name: Designation: Landline No: Cell No: Email id: Contact 2 Name: Designation: Landline No: Cell No: Email id: Brief description of the scope of Consultancy service provided (may attach a separate write up)
Duration of assignment including start date and end date
Approximate value of service (in rupees) (Optional)
Note: 1). Letter of consent from the bank to act as ‘Reference site’ to be enclosed. The
bank should consent for the visit during the time prescribed for Reference site visit in Annexure 11.
2). The bank acting as ‘Reference site’ may be asked through questionnaire or direct interaction with the bank.
Annexure 12
98
Checklist of documents to be submitted
Documents Submitted (Yes/No)
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
Note : Supporting documents of the annexures are be provided.
Annexure-13
Letter of Confirmation
99
To The General Manager,
Dena Bank
Risk Management Department,
Dena Corporate Centre,
C-10, G Block
Bandra Kurla Complex
Bandra (E)
Mumbai 400 051
RFP Ref. No.: Dear Sir,
We confirm having submitted the Bid and Annexures in accordance with the said RFP. The details submitted by us are true and correct to the best of our knowledge and if it is proved otherwise at any stage of execution of the contract, Dena Bank has the right to summarily reject the proposal and disqualify us from the process.
We confirm that we will abide by the conditions mentioned in the Tender Document (RFP and annexure) in full and without any deviation.
We, hereby acknowledge and confirm, having accepted that the Bank can at its absolute discretion, apply whatever criteria it deems appropriate, not just limiting to those criteria set out in the RFP and related documents, in short listing of bidder consultants for providing consultancy services.
We shall observe confidentiality of all the information passed on to us in course of the tendering process and shall not use the information for any other purpose than the current tender.
We also confirm that we have not been blacklisted by any Govt. Department / PSU / PSE or Banks or otherwise not involved in any such incident with any concern whatsoever, where the job undertaken / performed and conduct has been questioned by any authority, which may lead to legal action.
Place : Date: SEAL (Authorized Signatory)
Annexure-14
100
Authorization Letter Format (On organization’s letter head)
Place:
Date:
To
The General Manager,
Dena Bank
Risk Management Department,
Dena Corporate Centre,
C-10, G Block
Bandra Kurla Complex
Bandra (E)
Mumbai 400 051
Dear Sir,
SUB: Authorization Letter for attending the Pre-bid meeting and Bid Opening.
REF: YOUR RFP NO: - _________________ Dt ________________.
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 meeting & Bid opening of the subject RFP _____________on _____________
on behalf of our organization.
The specimen signature is attested below:
______________________________
Specimen Signature of Mr./Ms.
___________________________ __________________
Signature of Authorizing Authority Signature of Attesting Authority
___________________________
Name and designation of Authorizing Authority
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Annexure-15
Non-Disclosure Agreement Format This Non-Disclosure Agreement made and entered into at…………………. This
…………………..day of…………..2013.
BY AND BETWEEN
………………………………… firm/Company, 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
Dena Bank, a body corporate, established under the Banking Companies (Acquisition
and Transfer of Undertakings) Act 1970 and having its Head Office at Dena Corporate
