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					Small Industries Development Bank of India




        Invitation for submission of
           Expression of Interest
            to work as a Consultant for

             Implementation of
    Basel II compliant Integrated Risk
     Management System in SIDBI

   Tender Identification No.(TIN) : 400/2009/372/BYO/RiMD
                  dated: September 29, 2008
Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.



1.      Critical Information Summary
1. Last date for submission of Expression of Interest (EoI): October 21, 2008
   by 2 p.m.
2. Two hard copies and one soft copy (on a compact disk) need to be
   submitted in one sealed cover labeled “Implementation of Basel II
   compliant Integrated Risk Management System: “Expression of
   Interest” at the following address:


        General Manager,
        Risk Management Department,
        Small Industries Development Bank of India,
        6th Floor, SME Development Centre,
        Plot No. C-11, G Block
        Bandra Kurla Complex (BKC), Bandra (E),
        Mumbai - 400 051

        Telephone Number: 26523057
        Fax Number : 67531355

        E-mail : sramakrishnan@sidbi.in/ rimd_mho@sidbi.in

3. For queries and clarifications regarding the EoI, please contact S/Shri S.N.
   Singh [Tel. No. 67531331; e-mail : snsingh@sidbi.in] or K.R.Samuel [Tel..
   No. 67531285; e-mail : samuel@sidbi.in] at the aforementioned address /
   fax number/ their telephone numbers.
4. Last date for submission of queries and clarifications is October 15, 2008.
5. Please note that all the information desired as per the Checklist attached
     needs to be provided. Incomp lete information may lead to disqualification/
     rejection.
6. The respondents should quote the Tender Identification Number [TIN] in all
   their correspondences, in future. This number should be quoted throughout
   the life-cycle of the contract/consultancy work and in all references,
   correspondence, reporting, etc.




                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


                                                -2-
Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.

2.      Introduction and Disclaimers
SIDBI wishes to select a consultancy organisation (hereinafter referred to as
“Consultants”) for reviewing the entire risk management framework of SIDBI for
all its operations and for suggesting, designing and implementing approved
Basel II1 compliant Bank-wide Integrated Risk Management Systems including
carrying out all necessary modifications to the existing risk management
systems for Credit, Market and Operational risks, provide necessary training to
SIDBI officials and documenting the entire jobs carried out and providing
suitable Reference Manuals to the Bank.

2.1     Information Provided

This notice for submission of Expression of Interest (EoI) contains statements
derived from information that is believed to be reliable at the date obtained but
does not purport to provide all 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 Small Industries Development
Bank of India (SIDBI) in relation to the provision of Services/conduct of
assignment. Neither SIDBI nor any of its employees, agents, contractors or
advisers gives any representation or warranty, express or implied, as to the
accuracy or completeness of any information or statement given or made in this
document. SIDBI may update or revise this document or any part of it as it may
deem fit without notice.

2.2     Costs to be borne by Respondents

All costs and expenses incurred by Respondents to this notice in any way
associated with the development, preparation, and submission of responses,
including, but not limited to, the attendance at meetings, discussions,
demonstrations, etc., and for providing any additional information required by
SIDBI, shall be borne entirely and exclusively by the Respondent.

2.3     No Legal Relationship

No binding legal relationship will exist between any of the Respondents and
SIDBI until acceptance of letter of intent(LoI)/execution of a contractual
agreement by the selected respondent, after the due selection process.

2.4     Respondent Obligation to Inform Itself

The Respondent must conduct its own investigation and analysis regarding any
information contained in this document and the meaning and impact of that
information.



1
 Ba sel II refers to “International Convergence of Capital Measurement and Capital
Standards” i ssued by Ba sel Committee on Banking Supervision, Bank for International
Settlements in June 2006.
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                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.

2.5     Evaluation of Offers
Each Respondent acknowledges and accepts that SIDBI may, in its absolute
discretion, apply selection criteria specified in this document for evaluation of
proposals for short listing the eligible consultancy organisations (Respondents).

This document will not form part of any contract or arrangement, which may
result from the issue of this document or any investigation or review, carried out
by a Respondent. The Respondent admits and acknowledges by submitting an
EoI in response to this document that it has not relied on any representation or
warranty given in this document.

2.6     Errors and Omissions

Each Respondent should notify SIDBI of any error, omission, or discrepancy
found in this document.

2.7     Acceptance of Terms

A Respondent will, by responding to SIDBI with an EoI, be deemed to have
accepted the terms of this Introduction and Disclaimer .

2.8     Lodgement of EoI

2.8.1       EoI Closing Date

 Copies of the EoI must be submitted to the specified addressee before the
  specified closing date and time indicated in the Critical Information
  Summary.

 Faxed copies of any submission are not acceptable and will be rejected by
  the Bank.

 All copies of EoI and attachments must be provided in a window-less sealed
  envelope.

2.8.2       Registration of EoIs

Registration will be effected upon SIDBI receiving an EoI in the manner
stipulated. The registration must contain all documents, information, and details
required by this document. If the response to this notice does not include all the
information required or is incomplete, the EoI is liable to be rejected.

All submissions, including any accompanying documents, will become the
property of SIDBI. Respondent shall be deemed to license and grant all rights
to SIDBI to reproduce the whole or any portion of their submission for the
purpose of evaluation, to disclose the contents of the submission to other
Respondents who have registered a submission and to disclose and/or use the
contents of the submission as the basis for any resulting shortlisting/ selection/
retendering process, notwithstanding any copyright or other intellectual
property right that may subsist in the submission or accompanying documents.
                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
2.8.3       EoI Validity Period

Responses must remain valid and open for evaluation according to their terms
for a period of at least six (6) months from the last date of submission of
responses.

2.9     Queries and clarifications

Recipients are required to direct all communications related to this EoI, through
the Nominated Point of Contact persons:

Contact                 : Sanjay N. Singh
                          Deputy General Manager (RiMD)
Email                   : snsingh@sidbi.in
Telephone               : +91 - 22 - 67531331
Fax                     : +91 - 22 – 67531320

Alternate Contact       : K.R. Samuel
                          Assistant General Manager (RiMD)
Email                   : samuel@sidbi.in
Telephone               : +91 - 22 - 67531285
Fax                     : +91 - 22 – 67531320

SIDBI will not answer any communication initiated by Respondents and
received by SIDBI later than October 15, 2008. However, SIDBI may, in its
absolute discretion, seek additional information or material from any
Respondents after the last date and all such information and material provided
must be taken to form part of that Respondent‟s response.

Clarifications, if any, by SIDBI relating to the EoI at its absolute discretion,
would be posted on SIDBI website. Consultants may peruse them at the
website prior to the submission of the EoI.

Respondents should provide details of their Fax, e -mail and full address(s) to
ensure that replies to EoI can be conveyed by SIDBI to them promptly.

2.10    Notification

SIDBI will notify all short-listed Respondents in writing as soon as practicable
about the outcome of their EoI and the EoI process. SIDBI is not obliged to
provide any reasons for any such acceptance or rejection.

2.11    Disqualification

Any form of canvassing/ lobbying/ influence etc., will be a disqualification.




                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
2.12    Disclosures

The respondents must disclose:
i)     If they are or have been the subject of any proceedings or other
arrangements relating to bankruptcy, insolvency or the financial standing of the
respondent including but not limited to the appointment of any officer such as a
receiver in relation to the respondent‟s personal or business matters or an
arrangement with creditors or of any other similar proceedings.
ii)     If they have been convicted of or are the subject of any proceedings,
relating to:
       a criminal offence or other offence, a serious offence involving the
activities of a criminal organisation or found by any regulator or professional
body to have committed professional misconduct.
      Corruption, including the offer or receipt of any inducement of any kind in
relation to obtaining any contract, with SIDBI, or any other contracting authority.
      failure to fulfill any obligations in any jurisdiction relating to the payment
of taxes, levies, statutory dues or social security contributions.
iii)    If they have a reason to believe that they may have been, or are subject
of any proceedings, that may be listed by the World Bank in its „Listing of
Ineligible Firms‟ or „Listings of Firms, Letters of Reprimand‟ posted at
www.worldbank.org or on any similar list maintained by any other donor of
developing funding, or any contracting authority.
Disclosure extends to any company in the same group of the Respondent
(including but not limited to parent subsidiary and sister companies and
companies with common shareholders whether direct or indirect and parties
with whom the Respondent is associated in respect of this tender).
iv)    If a respondent or related company or any individual at any point of time
discloses details of any previous misconduct or complaint, SIDBI will seek an
explanation and background details from them. At the sole discretion of SIDBI
an assessment as to whether the respondent‟s EoI/tender/bids will be allowed
or evaluated, will then be made. SIDBI‟s decision in such cases would be final
and binding on the respondent concerned.
2.13    SIDBI’s Treatment of Your EoI

SIDBI is committed to ensuring Value for Money in complex procurements.
Therefore, whenever an EoI is submitted, or in the Phase II of selection
process, SIDBI will :
   ensure EoIs are registered upon receipt and held securely until after the
     deadline for receipt of EoIs
   return, unopened, any EoI received after the deadline of receipt
   disqualify any non-compliant EoI (i.e. EoIs failing to meet the terms of
     these instructions/instructions in Phase II) received.
   ensure that all EoIs are evaluated objectively, in line with the evaluation
     criteria specified therefor.


                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.

     following evaluation, inform the respondents within 10 working days of the
      decision made and provide feedback to each tenderer within 15 calendar
      days of written request and within the bounds of confidentiality.
     publish the award of the Contract on SIDBI‟s website.

3.      Short listing Criteria
3.1     Minimum Essential Eligibility Criteria
The Respondent must satisfy the following minimum eligibility criteria at the EoI
stage..

1. The Respondent must have undertaken at least one similar consultancy
   project as defined in the Scope, in any Scheduled Commercial Bank or in
   any all India Financial Institution in the last three years.

2. At least one of the client Banks/Financial Institutions, for which the
   assignment has been undertaken, must be in India with a minimum balance
   sheet size of Rs.20,000 crore at the time of assignment acceptance.

3. The Respondent should not have been in loss for at least two years out of
   the last three years. The respondent should submit its Annual Report/
   Financial Statement / Certificate signed by its Auditors in this regard to the
   satisfaction of SIDBI

4. The Respondent should have demonstrated capability and domain
   expertise in the area of Banking, Credit and Management of credit, market
   and operational risks, as evidenced from assignments completed for client
   banks/ financial institutions.

5. The Respondent should have an Office in Mumbai/ Navi Mumbai/ Thane
   where its core team would be posted to undertake Bank‟s assignment.

3.2     Selection process
SIDBI is looking forward to identify a consultancy organisation which has
demonstrable technical competence and capability for reviewing the e ntire risk
management framework of SIDBI and for suggesting, designing and
implementing Basel II compliant Bank-wide Integrated Risk Management
Systems including modifications to existing risk management policies and
systems for Credit, Market and Operational risks and also documenting the
entire jobs carried out and providing a suitable Reference Manual to the Bank..
The Consultant would need to demonstrate availability of necessary and
suitable manpower to deploy on the project to ensure successful
implementation.



The Selection process would be in two phases consisting of -

                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
        Phase 1 - Pre-Qualification based on Eligibility criteria
        Phase 2 – Part A: Technical evaluation
                  Part B: Commercial evaluation

Phase 1- Pre-Qualification - Eligibility Criteria

Pre-qualification shall be done after receipt of EoI on the basis of
aforementioned minimum essential eligibility criteria. The purpose behind this
step is to identify the set of respondents from whom SIDBI would invite detailed
technical and commercial proposals.

The respondents are required to submit a statement of compliance with
the above eligibility criteria as also the following, formats of which
wherever applicable, are attached.

i.      Format for bio-data/application                           (Format-I)
ii.     Format for bio-data of the partners/ whole-time directors (Format-II)
iii.    Format for works completed and on hand                    (Format-III)
Iv.     Brief profile of the respondent including business areas and profile of
        human resources
v.      Brief writeup on the approach/ methodology, estimated project cost and
        time frame proposed to be followed for the assignment.

SIDBI reserves the right to reject any or all applications without assigning any
reason therefor.

On the basis of the minimum essential eligibility criteria, the shortlisted
consultants will be issued the Request for Proposal (RfP) relating to the
assignment and other information such as, selection criteria/process, payment
terms, etc., and inviting submission of technical and financial bids.

Phase 2 (Technical Evaluation and Commerical Evaluation)


The evaluation will be based on the criteria that would be prescribed in the
Request for Proposal (RfP).



.




                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.


4.      Terms of Reference
4.1     About SIDBI
SIDBI was set up in 1990 as the principal financial institution for promotion,
financing and development of industries in the small scale sector. SIDBI‟s
operations have three main areas, viz., direct assistance, indirect assistance
and development & support services. SIDBI has a network of 73 branch offices
spread across the country, with Head Office at Lucknow. Some of the Head
Office departments are also located at Mumbai and New Delhi. More details
about the schemes and support services of SIDBI can be obtained from the
website “www.sidbi.in”.

As on March 31, 2008, the total asset base of SIDBI stood at Rs.23,887 crore.
The financial products of SIDBI cater to diverse requirements of micro, small
and medium enterprises (MSMEs) directly as also indirectly through other
financial intermediaries/Corporations/banks. As on March 31, 2008, the
outstanding loan portfolio of SIDBI was Rs.20,226 crore comprising refinance
and resource support to banks/FIs, loans and advances to MSMEs and bills
portfolio.

4.2     Risk Management & System Infrastructure in SIDBI
SIDBI was set up primarily as a refinancing institution, with a relatively limited
exposure in direct financing. Over the last few years, the share of direct
lending has progressively increased. The Bank has appraisal and credit
monitoring systems which have been drawn from AIFIs. In the recent years,
with the liberalisation of financial system, use of technology, increased
competition for business from banks/ FIs, introduction of global standards for
risk management, etc., Reserve Bank of India (RBI) has suitably made need
based changes in the risk management practices in the banking system.
SIDBI, has also adopted improved risk management practices by introducing
systems, structures, etc., in respect of credit risk management and market risk
management.

Further, as part of the on-going process of introducing better risk management
systems in SIDBI, it is proposed to implement the revised capital adequacy
framework (Basel II Norms) in SIDBI, though the RBI guidelines are presently
applicable to the banks. Accordingly, in line with the RBI guidelines on New
Capital Adequacy Framework, related guidance notes/ guidelines and Basel_II
Norms, SIDBI proposes to set up Integrated Risk Management Systems,
covering setting up of systems & software for Credit Risk Management [CRM],
Operational Risk Management [ORM] and Market Risk Management [MRM].

 SIDBI has already put in place internal rating/ scoring models as a tool for
measuring credit risk for its various borrower segments. As regards market risk,
the Bank generates the gap statements, undertakes duration & VaR analysis of


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                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
investment portfolio etc. The operational risk is controlled through traditional
systems and procedures.

Particulars of information system infrastructure in the Bank is furnished at
Annexure.

4.3     Objective
The objective of the assignment is to upgrade SIDBI‟s risk management
policies, structure, methodologies, processes and systems to enable
management of risks in an integrated manner.

4.4     Scope of Work
The scope of the project has been outlined below.

The assignment involves design and implementation of Basel II compliant
integrated risk management system. The consultant would
     carry out a detailed review of the present policies, systems, practices
       and structures relating to credit, market and operational risks;
     suggest and modify/ upgrade the same,
     design and implement necessary policies and systems to enable the
       same,
     monitor and provide training,
     ensure compliance with the New Capital Adequacy Framework of RBI
       and all other related guidelines issued from time to time including those
       for Supervisory Review Process (SRP) and Market Discipline and
       Internal Capital Adequacy Assessment Process (ICAAP);
     enable calculation of regulatory capital
     provide disclosures as stipulated by the regulatory authority and also
       global best practice/ Basel II. and
     document the entire jobs carried out as above and providing a suitable
       Reference Manual to the Bank

Further, this assignment would enable calculation of capital charge
requirements in respect of all the risk categories, provide risk reports and also
all Pillar III disclosures, both qualitative and quantitative , as required under
guidelines issued by RBI.

In addition, the systems would be put in place to eventually enable calculation
of capital charge requirements in respect of all the risk categories, institute
ICAAP, provide risk reports and also all Pillar III disclosures, both qualitative
and quantitative, as required under Basel II guidelines.

Further, the system, once implemented, must be dynamic, scalable and
parameterised to take care of the standard reports required by the Bank and
various monitoring authority, viz., credit, market and operational risk reporting
formats, comprehensive risk reporting system to assess and compare overall
risk position of the bank in terms of economic capital, control and gap
statements, risk movement reports, and so on. The system, once put in place,
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                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
must take care of the whole process of risk management functions (viz.,
identification, quantification, control, accept and transfer).

Consultant should develop a functional and technical specifications document
for risk management solution(s) that can take care of the Credit, Market and
Operational risks (including the advanced approaches in Basel II), in an
integrated/ comprehensive manner).

The Consultant is expected to design the risk management framework, define
implementation plans and assist in implementation, including the technology
areas with appropriate integration with all existing business application
software.

In order to facilitate timely and comprehensive completion, the said assignment
would be implemented over the following phases; viz.,

Phase I: Consulting Phase

Phase II: Implementation of RBI guidelines to banks on risk
management and New Capital Adequacy Framework.

This would have three sub-phases:

        i. Design / approval by SIDBI;

        ii. Implementation of the design as approved by SIDBI; and

        iii. Testing and training

Consultant should assist the Bank in achieving immediate compliance with RBI
requirements in the prescribed timeframe that covers: Standardized Approach
for Credit Risk, Standardized Duration Approach for Market Risk and Basic
Indicator Approach for Operational Risk and scalability to adopt advanced
approaches at a later stage.

Phase III: Implementation of methodologies of advanced approaches
under Basel II and all other work and deliverables.

This would have three sub-phase:

        i. Design / approval by SIDBI;

        ii. Programme Management, Implementation;

        iii. User Acceptance Tests; and

        iv. Training




                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.

Further particulars in respect of the three phases are as under.
While the requirements in respect of (i) Design and
(ii)_Programme Management, Implementation and User
Acceptance Test are given in a consolidated fashion, they
would relate to Phases II and III, as applicable.
4.4.1      Consulting
During this phase, the Consultant shall study and understand the entire working
of the Bank, including Bank‟s existing business plans, policies, procedures,
technology plans, etc., vis-à-vis the global best practices. Consultant is
expected to study all policies, procedures, circulars and manuals for credit,
investments, recovery, pricing of credit, purchase/procurement, funds/cash
management, accounting, all applications software, internal audit systems, etc.,
and suggest improvements, wherever required, from the risk perspective in the
light of Banks‟ mission, vision and risk philosophy.

The Consultant shall prepare a gap report, addressing the following and
suggest modifications/improvements in policies, practices, methodologies,
solutions etc., towards achieving Basel II compliant Integrated Risk
Management system :

[i]       Policies, procedures and guidelines.

[ii]      Organisation structure and associated roles and responsibilities.

[iii]   Enterprise-wide Risk measurement and managing methodology
covering Credit, Market, and Operational Risks, including Collateral
Management and other relevant policies. This would include, but not be limited
to the following:-

      Review the present Credit Risk Management (CRM) systems, structures
       and practices in the Bank, and prepare a gap statement with regard to the
       CRM system as required by the regulatory guidelines/Basel II/ Global
       standards (both Standardised Approach, Foundation Internal Rating Based
       & Advanced Internal Rating Based approaches & also its migration from
       one to the other).

      Review the organisational structure, processes and practices for
       Operational Risk Management (ORM) relating to the entire operations in the
       Bank and identify gaps in comparison to regulatory guidelines and global
       best practices and suggest improvements;

      Review the present Asset Liability Management (ALM) and Market Risk
       Management (MRM) systems, structures and practices in the Bank, and
       prepare a gap statement in respect of MRM system vis-a-vis the regulatory
       guidelines / global best practices and suggest improvements.



                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
Deliverable in the Consulting Phase : Report(s) covering all the aforesaid
elements to be addressed in the Consulting Phase with appropriate
chapters/sections to clearly indicate the coverage.

4.4.2     Designing
As part of design sub-phases under Phase I and Phase II, the Consultant is
expected to:

   Design suitable framework with a view to acquiring capabilities for
    identifying, assessing, measuring, managing and mitigating all types of risks
    in all the major activities of the Bank through a suitable framework. The
    framework should provide the methodology to identify risk, quantify the risk,
    and suggest measures for managing and mitigating the risk and assist the
    Bank to have an Integrated Risk Management System.

   Design framework for estimation of Regulatory capital under Pillar I
    requirements of RBI‟s guidelines on New Capital Adequacy Framework and
    all related guidelines.

   Design framework for Pillar II preparedness under current regulatory
    requirements.

   Design framework to meet Pillar III under regulatory requirements.

   Assist in preparation of the policy documents envisaged under New Capital
    Adequacy Framework and modifications to related existing policy
    documents to ensure regulatory compliance

   Design framework for estimation of Regulatory capital under Pillar I of Basel
    II guidelines and Economy Capital.

   Design framework for conducting Pillar II requirements for concentration risk
    studies, stress testing and back testing models, migration studies analysis
    and other Basel II requirements.

   Design framework to meet Pillar III regulatory requirements under Basel II.

   Advise on the appropriate organisation structure, manpower requirement,
    qualification/ skill sets of personnel.

   Within the given framework of the Bank‟s IT policies, suitable software
    solution(s)/ Risk Management Solution architecture should be suggested to
    support implementation of IRMS keeping in view the IT architecture and
    technology plan/existing systems of the Bank. The report should define
    interface requirement with Bank‟s existing IT architecture/infrastructure
    (including    those      implemented/under     implementation/decided        for
    implementation. The data structure suggested by the consultant should be
    able to capture all information at the most granular level and suitable for the
    Bank and be fine tuned for Basel II compliant IRMS.

                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.



The specifics to be achieved under the phase are as under :

    Credit Risk Management

 The adoption of the New Accord in the proposed format requires substantial
upgradation of the CRM system in the Bank for optimizing capital. Accordingly,
the following aspects will have to be addressed.

   Formulate a plan for addressing each of the gaps as observed in the
    Consulting Phase and suggest modifications in CRM systems and
    structures for adoption in the Bank for enabling the Bank to be compliant in
    terms of SA initially and parallely equip to handle FIRB approach and AIRB
    approaches as suggested in Basel II Accord

   Frame a validation policy for all the credit rating tools / models being used in
    the Bank and formulate a road map for implementing the Validation Policy
    given the structure of rating tools/models in the Bank.

   Prepare collateral management policy, which would, inter alia, cover Policy
    on valuation of credit risk mitigants/securities.

   Formulate methodologies for risk based pricing of loans, risk based
    assessment of performance of Operating Offices taking into account Bank‟s
    activities, portfolio, etc.

   Design data structure/modifications to existing data structure for capturing
    the relevant data to enable all the above.

    Operational Risk Management (ORM)

   Design methodology for identification, quantification, mitigation and control
    of operational risk in the Bank and formulate a road map for implementing
    the ORM.

   Mapping all the processes and identifying risks - in particular, sources of
    operational risks. Procedures /models for measurement of risks so identified
    and suggest measures for timely evaluation/ action in respect of such
    identified risks. Conduct one round of risk self assessment across all the
    major Operating Offices, Departments / functions of the Bank and present
    results.

   Design system for capturing of risk events,

   Any other matter considered relevant for ORM System as per the Bank‟s
    policy, regulatory environment, or as may be advised by SIDBI.




                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
    Market Risk Management (MRM)

   Design methodology for upgrading the existing MRM to bring it at par with
    best practices and comply with regulatory guidelines/Basel II.

   Considering the fact that banks are required to manage the market risks
    and ensure that the capital requirements for market risks are being
    maintained on a continuous basis (i.e., at the close of each business day)
    design methodology and formulate a road map for assisting the Bank to
    migrate to internal risk management models based market risk capital
    calculation in the future.

    Capital Funds

   Design methodologies/reports for arriving at the capital funds of SIDBI in
    line with the regulatory requirements. The calculations must take into
    account different elements of tier I capital and tier II capital, and should be
    parameterised to take into account any elements that the regulator may
    include, from time to time. The system should be such that calculation of
    capital funds is linked to data base/modules for calculation of capital
    charges.

    Market Disclosures

   Design methodologies/reports for capturing disclosure statements as
    required by the regulatory authorities. The list of disclosure statements as
    provided by RBI/IBA can be taken as a basis for developing disclosure
    statements. However, system should be amenable to develop any other
    statements that the Bank may require as part of implementation of risk
    management systems.

   Develop manuals, documents and any other statement structures which the
    regulator may require for complying with the requirements as well as to
    meet Bank‟s internal/audit requirements and MIS requirements.

   Develop Disclosure Policy & Internal Capital Adequacy Assessment Policy
    (ICAAP) document for the Bank.

    Reporting formats

   Designing report templates for MIS addressing Pillar III requirements for
    RBI reporting as well as Board level reporting.

   Develop systems for generating reporting formats for quantitative data,
    qualitative data and discussion formats/management summary pertaining to
    credit, market and operational risks.

   The Bank is having and may put in place Departments/Cells and
    Committees to monitor, evaluate and control credit risk, market risk and
    operational risks on an on-going basis. The systems must be dynamic
    enough to generate reports which highlight the risk profile, risk movement,
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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
    key risk factors, etc. The software/tools also should enable generating
    suitable reports as may be necessary for the executive decision making,
    which will highlight the economic capital, shift in the risk concentration,
    potential areas of risk, etc. For this purpose existing reporting system, data
    warehousing (being put in place) etc., may be utilised to avoid duplication of
    efforts.

   Develop manuals /compendium of such reporting formats to the satisfaction
    of SIDBI.


 Develop a robust MIS to support effective implementation of the Risk
    Management System.

    Others

   Assist in acquiring appropriate software and tools for regulatory/economy
    capital calculation and reporting for the Bank, which is dynamic in nature
    keeping in view the comprehensive risk management framework. Also
    develop tools for arriving at the Risk Adjusted Return On Capital (RAROC)
    and hurdle rate for economic capital.

   Design and implement any other systems or processes that may be
    required for enabling the Bank to comply with revised capital adequacy
    framework and ORM systems.

    Systems integration

   On the basis of the gap study of the inter-relativity of various existing and
    proposed project of the Bank, suggest solutions after protecting the IT
    investment already done. The processes involving more than one system
    should eliminate cumbersome process, repetitive data entry, etc. While
    integrating the systems it should be ensured that all the statutory, regulatory
    and legal guidelines/instructions are complied with. It should be ensured
    that the security issues are simultaneously addressed in a satisfactory
    manner and necessary audit trails are also maintained.

Deliverable in the Design Phases : Design documents for each aspect
covered under section 2.5.2.

4.4.3   Programme               Management,              Implementation   &   User
    Acceptance Test
Right at the outset, the Consultant should address the issues such as how the
program should be organized, identifying and managing program risks,
assisting the Bank in realizing the project goals and objectives. The Bank
expects the Consultant to hand-hold and assist it at all stages and in all issues
related to the implementation of the project.



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                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
Consultant should help the Bank in the entire vendor evaluation & selection
process for various systems, tools, solutions, assignments required to be
undertaken further to the Consultant‟s recomme ndations based on the gap
study including preparation of tender documents and taking the process to its
logical conclusion. However, all software requirements upto Phase II would be
provided by the Consultant.

The software tools & solutions must comply with the different methodologies
and approaches suggested by the regulatory authority at different phases of
implementation and the overall design and framework must e nable migrating to
advanced risk management framework smoothly.

The systems and software must be capable of generating the disclosure
statements required by the regulatory authority and must also provide risk
reports as generally required by the Risk Management Department, Risk
Management Committee(s), senior management, Board and RBI.

Provide necessary guidance, training and handholding in managing the
software and tools till the team of Bank Officers are familiar with the system
and also provide necessary guidance when migrating, if any, from one
methodology to the other.

The system developed shall be dynamic and system driven and must capture
the data and generate reports on an on-going basis.

The Consultant should conduct independent User Acceptance Tests (UATs),
over and above the functional and technical testing which the vendor may
conduct as a part of the implementation.

Any other matter considered relevant for Basel II norms implementation in
respect of credit risk capital calculation, or as may be advised by SIDBI.

The salient features of this phase are:

   Consultant would be responsible for project management and the solution
    implementation on Bank‟s behalf in respect of all other vendors/consulting
    agencies/implementing agencies as a part of this IRMS project. These will
    include monitoring the implementation, periodic updates on status,
    conducting independent business user tests, over and above the functional
    and technical testing which the vendor may conduct as a part of the
    implementation (Project Management - Depends on time frame)

   Documentation of project framework with project definition, objectives and
    its benefits to align with the Bank‟s business strategy.

   Identification and adoption of the best practices/standard         project
    management tools for smoother execution of the project.




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Notice for submission of EoI : Implementation of Basel II compliant
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   Setting up of appropriate communication channels and review mechanisms
    amongst the project stakeholders to ensure smooth implementation of the
    project.

   Set documentation standards and monitor adherence

   Identify and manage training schedule covering Bank management, it‟s IT
    staff and it‟s business users for technology absorption.

   Periodical project review with the IRMS Project Advisory Committee (PAC),
    identifying the deviations in the implementation, devising action plans/mid-
    course corrections, wherever required, so as to ensure adherence to
    implementation schedules and strategies.

   The Consultant should ensure minimization of the risks and that the
    suggested solution includes product/process features such as Performance
    analysis, Product analysis, Product category, Frequency of data
    upgradation, hierarchy identities, hedging products, multi currency feature,
    personnel resources, behavioural analysis, scalability, flexibility, etc.

   As the Bank is currently implementing Enterprise System Architecture
    (ESA) Project, it is expected that a fair amount of co-ordination between the
    Consultants for ESA and Consultants for Integrated Risk Management is
    established so that consistency is maintained and divergence is avoided,
    facilitating optimum results for the Bank from both the initiatives.
    Notwithstanding the above, the following aspects are to be built in the
    process of the consultancy so as to achieve the ultimate objective of the
    organisation‟s goals and expectations:

   Inter operatability and co-existence with other systems including the on-
    going ESA should be supported with multiple data flows from old and new
    systems/data-bases. This also applies to historical and current data.

   The Consulting and programme management and implementation phases
    must ensure complete integration of various modules involved in the project
    with a global view of the entities involved and ease of operation for the user
    so as to achieve desired level of risk management capabilities. The Bank
    should be able to use the suggested systems/solutions to identify, assess,
    measure, manage and mitigate the market risk, credit risk and operational
    risk in a unified and integrated manner. The project must, therefore, ensure
    complete integration with the ESA project already taken up by the Bank and
    those proposed for implementation.

   The Consultant should suggest to the Bank all the required Hardware
    systems, application software, database and necessary tools for enabling
    the Bank to effectively implement all the suggested solutions including
    interfacing with the existing system. The Consultant should also provide
    necessary inputs to the Bank for putting in place systems for ongoing
    upgradations in tune with changing environment.


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
   The Consultant should ensure the quality of deliverables through pre-
    defined testing scenarios.

   The Consultant should prepare acceptance test plans and participate in
    UATs of all deliverables / implementations of projects arising out of scope
    mentioned in paragraph 4.4.2.

Thus, the assignment should achieve the Objective of the project.

4.5   The requirements mentioned above give broad scope of the project
and are not exhaustive. The detailed requirements and timeframe for
implementation will be given in the Request for Proposal (RfP), which will
be issued later to short listed respondents.


5.   Prohibition : The consultant selected for the assignment
would not be permitted to bid for any component (software
tools, etc.) tendered for subsequently under the project.

6.     Disclaimer: Subject to any law to the contrary and to the
maximum extent permitted by law, SIDBI and its officers,
employees, contractors, agents and advisers disclaim all
liability from any loss or damage (whether foreseeable or not)
suffered by any person acting on or refraining from acting
because of any information including forecasts, statements,
estimates, or projections contained in this document or
conduct ancillary to it whether or not the loss or damage arises
in connection with any negligence, omission, default, lack of
care or misrepresentation on the part of SIDBI or any of its
officers, employees, contractors, agents or advisers.




                                Tender No.: 400/2009/372/BYO/RiMD
                                     dated: September 29,2008


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.


                                                                                            Annexure

Current Systems
This section describes the existing IT infrastructure and applications. The
scope of assessment of present IT infrastructure is limited to getting the
information required for overall understanding and defining the requirement for
management of bank‟s IT infrastructure.

The assessment covers the existing IT applications and architecture, available
software and hardware assets and the network set-up. It mainly discusses how
far the existing applications and set-up fulfill the quality of service requirements.
The assessment described here is purely from the technical point of view.

Existing IT architecture
This section describes the architecture of the existing IT applications and set -
up in generic terms. Some applications (such as P&D, RTUF) may differ to
some extent from the observations presented here. The focus here is to get the
overall idea about the applications without considering specific details.
Most of the applications have been developed (or ported to) in Oracle forms 6i
or oracle 9i and 10g database. SIDBI has bought some readymade software
products based on Delphi and Java technology. Also some software has been
developed using Lotus Notes Domino.

Architecture
A schematic describing the architecture currently at SIDBI is shown below.



                                             CiTRIX server
                                                                              Database
   Client machine

                            CiTRIX                                     Stored            Branch 1
                           Metaframe         Forms 6i Client            proc             schema
                          presentation
            CiTRIX           server                                       .                 .
             client
                                                                          .                 .
                                              Delphi client               .                 .

                                                                        Stored           Branch n
                                                                         proc            schema




The architecture is client-server architecture with the business logic distributed
in the client as well as in the database stored procedures and triggers. The
client is a heavy client as it has got a fair amount of business logic.
There is a separate database schema for each branch. Depending upon the
user, the appropriate schema is used. All the users are logical / physi cal
database users. SIDBI has implemented single sign-on across all business
applications. SIDBI also uses certain applications using a 3 -Tier Architecture.


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Notice for submission of EoI : Implementation of Basel II compliant
Integrated Risk Management System.
SIDBI users have been provided with a centralized Internet access. Also
access to mail through Internet is available to SIDBI users.

Deployment
All the applications have been deployed centrally and accessed over the WAN
using Citrix Metaframe presentation Server. All the client machines need to
have Citrix client installed to access the applications. There is cluster of six
Citrix Servers and they have been configured to use in load balancing mode.
The central deployment of the applications allows for easy deployment of the
new releases and patches.

Enterprise System Architecture
In addition to the current architecture, SIDBI is currently implementing an
Enterprise System Architecture project. The schematic diagram of the
architecture under this project is shown below:




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Software
SIDBI is using following OS/DB/software/tools products –

 Category                 Product
 Operating                Win 2003/2000/NT/98/95, IBM AIX 5.2/5.3, HP-UX
 systems
 Database                 Oracle 9.2.x.x, Oracle 10g in RAC
 Application              Citrix Metaframe Presentation Server 4.0, IBM
 Server                   Websphere and MQ-Series
 Web Server               JBoss, Apache Tomcat
 Development              Oracle IDS 6i, Java/JSP, Lotus Notes Domino
 tools
 Email                    Lotus Notes Domino R5 / R7
 Firewall                 CISCO PIX 515R
 Proxy Server             Squid Proxy
 Backup Tools             Veritas Enterprise Backup System
 Anti Virus               Symantec Antivirus
 Office automation        MS Office 2003
 Proxy
 HIPS
 NIPS

There are a number of software applications within SIDBI. A list is provided
below.
       Business                      Purpose                    Technology        Comment
      Applications
                    Direct credit – CART,      Forms 6i, Lotus
                    loan document              Notes R5
1 Direct credit
                    generation, credit rating, Oracle 9i
                    loan accounting & MIS
                    Refinance – Disbursals /             Oracle              9i
2 Refinance                                    Forms 6i
                    Repayments
                    Bills finance system –               Oracle              9i
3 Bills Discounting                            Forms 6i
                    Disbursals / Repayments
                    (Branch accounting) –                Oracle              9i
4 Accounts                                     Forms 6i
                    Branch wise GL
                    Promotion &                          Oracle              9i
5 P&D / SFMC        Development – Complete Forms 6i
                    application
                    Application for Refinance            Oracle              9i
  Tech Upgradation scheme on Technology
6 Fund (Govt, fund upgradation fund for        Forms 6i
  for subsidy) RTUF Textile industry and
  / CLCSS           Credit linked capital
                    subsidy scheme
7 Equity            Part of refinance          Forms 6i Oracle               9i


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Notice for submission of EoI : Implementation of Basel II compliant
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   Credit Rating
8                          Credit rating software          J2EE                    CRISIL
   (CART & RAM)
9 Fixed deposit            Total Management                Forms 6i Oracle 9i
10 Money market                                            iBrowse Oracle 9i Credence
                           All treasury functions
   Forex Dealing                                                    Oracle 9i
11                         (including Forex)                                  Credence
   Room
                                                                       Oracle
                                                                       10g,
                                                                       Oracle
                                                                       Warehou
                           Asset liability
12 ALM                                                     OFSA        se
                           management
                                                                       Builder,
                                                                       Oracle
                                                                       Discover
                                                                       er
                           Provides corporate on-                      Oracle 9i
                           line MIS. Also, includes
13 MIS                                                     Forms 6i
                           MIS requirements of
                           ARD.
                           Consolidated accounting                     Oracle 9i
14 CAS (Corp A/c)          system – Organization           Forms 6i
                           wide GL
                           To manage the list of           Forms 6i
15 Caution Advice          defaulters prescribed by        Oracle 9i
                           RBI
   Recovery and                                            Forms 6i
                           Tracking of NPA cases
16 NPA Management                                                      Oracle 9i
                           under various categories
   (RNMS)
   Invoice                 Invoice Discounting             Forms 6i
17                                                                     Oracle 9i
   Discounting             operations
   Central                                                 Forms 6i
                           Depreciation of Fixed
18 Depreciation                                                        Oracle 9i
                           assets
   Software (CDS)
                           CBLO, GILTS, G-Secs             Proprietary
19 NDS
                           operations
20 Reuters                 Forex dealing board
                           Real-time information
21 Bloomberg
                           sytem for forex
                           Messaging system for
22 Swift
                           fund transfer, LC

       Support                    Purpose                   Technology             Comment
     applications
                         Payroll & employee
1 Payroll                                               Forms 6i      Oracle 9i
                         loan accounting
2 Helpdesk (HP           Helpdesk (Hw facility
                                                        Proprietary
  Service Centre)        mngt.)


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Notice for submission of EoI : Implementation of Basel II compliant
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       Support                    Purpose                   Technology            Comment
     applications
                   Application support to
3 DC Support                              Lotus notes
                   users
4 Inward / Outward Letter management      Lotus notes
                                                                                Vendor –
                         Human Resource                 Power
5 HRMS                                                                Oracle 8i Infotrack
                         Management System              Builder
                                                                                Systems
                         To manage PF of
6 Provident Fund                                        Forms 6i      Oracle 9i
                         SIDBI employees
  Visitor                To keep track of
7 Management             visitors in the office         Proprietary
  System                 premises

Disaster Recovery
The Disaster recovery site has been implemented and is operational for major
applications.

Project ESA Components
Project Outline - 3 tracks
SIDBI is in process of implementation of Enterprise-wide IT Solution, named
as ESA project. It envisages implementation of several components comprising
business applications, support applications, business -efficiency enhancement
tools, etc.

These components are grouped into three Tracks. Each track consists of and is
named after one main component to which the other components in the track
are related.
Track 1: Portal
Track 1 consists of the proposed Intranet portal and several new areas, tools
and business efficiency enhancement applications.
      Website (includes B2B integration)
      Corporate Intranet
      Admin applications
      Audit
      Document management
      Workflow Management
      Knowledge management, Policy Management & Information
         management
      e-Learning
Track 2: Integrated Accounting and MIS
Track 2 centres around an integrated accounting system and other applications
that will depend upon and need to be tightly integrated with the accounting
system.


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Notice for submission of EoI : Implementation of Basel II compliant
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        Integrated Accounting & General Ledger Implementation
        Fixed asset management
        Business Intelligence / MIS
        Customer management
        Resource raising
Track 3: Business Applications
Track 3 centres on implementation of business applications, primarily an
application supporting the pre and post sanction functionality of Direct Credit.
       Direct Credit
       Asset recovery and NPA Management Network

SIDBI is presently using MPLS network of TULIP for inter branch
communication.




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                                           Format I

                   Small Industries Development Bank of India
                    Pre-qualification of Consultants - Profile

1.      Name of the Respondent & Address                            :

2.      Telephone, fax Nos.                               :

3.      Constitution of the Respondent                    :
        [Proprietary/Partnership/Company]

4.      Name of Partners/Associates (if any)                        :

5.      Year of Establishment                                       :

6.      Name & profile (including experience) of :
        main personnel to be deployed on the project

7.      Banker‟s name                                     :

8.      Key financial particulars, viz., revenue, net profit            :
        (Latest Financial statement/ Income Tax Clearance
        Certificate/CA Certificate to be enclosed )

9.      Name, designation, contact particulars :
        of person authorised to deal with SIDBI




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Notice for submission of EoI : Implementation of Basel II compliant
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                                         FORMAT II


                INFORMATION OF THE PARTNERS/ASSOCIATES


1.      Name                                      :

2.      Address                                   :

3.      Associated with the firm/company since :

4.      Qualifications                                    :

5.      Professional experience                   :

6.      Major assignments handled                         :




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                                           FORMAT III


    LIST OF MAJOR WORKS COMPLETED DURING THE LAST THREE YEARS


    Sl. No.      Name of the      Nature of     Date of start      Period of   Actual date    Reasons for
                   client           work                          completion       of        the variation/
                                                                               completion     delay, if any
       1              2               3                 4             5            6               7




NOTE : (a)      The credentials issued by the Clients shall be enclosed.
.


                            LIST OF MAJOR WORK ON HAND


 Sl.          Name of the         Nature of             Present       Scheduled         Remarks
 No.            client              work                 status         date of
                                                                      completion
   1                 2                 3                    4              5                 6




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Checklist

    1. Format I : Prequalification of consultants - Filled in/complete in all
       aspect.
    2. Format II: Information of partners/associates - Filled in/ complete in all
       aspect.
    3. Format III: List of major works completed during last three years and List
       of major work in hand – Filled in /complete in all aspect.
    4. Brief profile of the respondent including business areas and profile of
       human resources.
    5. Brief write up on the approach/methodology, estimated project cost and
       time frame proposed to be followed for the assignment.
    6. Declaration          that       the      Respondent         and/or       its
       proprietor/partners/directors/associates have not been convicted of or
       are the subject of any proceedings, relating to:
              A criminal offence or other offence, a serious offence involving
               the activities of a criminal organisation or found by any regulator
               or professional body to have committed professional misconduct.
               Corruption, including the offer or receipt of any inducement of any
                kind in relation to obtaining any contract, with SIDBI, or any other
                contracting authority.
               Failure to fulfil any obligations in any jurisdiction relating to the
                payment of taxes, levies, statutory d ues or social security
                contributions.




                                              *****




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