1. Riskpro Basel III Offering
Overview of Basel III: Issues and Challenges
RBI’s latest guidelines on Capital Adequacy issued on May 2, 2012 require Banks to comprehensively
address various elements relating to capital, liquidity, models, capital adequacy and overall risk
management framework. The regulatory framework requires compliance with Basel III guidelines in
a phased manner beginning from January 1, 2013.
Clearly Basel III is creating more issues and challenges than opportunities, or atleast in the short
term. Profitability, business strategies, competition, liquidity, capital raising efforts are all dependent
upon a number of variables. Banks want to ensure that Basel III compliance not only achieves
regulatory requirements, but also helps in meeting business challenges such as competition,
improved profit margins, both of which are likely to be impacted due to additional capital
requirements.
Riskpro India has put together a long term and comprehensive offering that can support Banks in
their quest for Basel III compliance. Our end to end services for Basel III begin with impact
assessment and also include helping identify right technology and tools to implement for necessary
measurement and analytics.
Riskpro’s Basel III Advisory Services
Basel III services are categorised in the following areas
 Building robust Risk Management Frameworks compliant with Basel II and Basel III
 Capital Management
 Liquidity Risk Management
 Credit and Market Risk
 Models and technology for Basel III
 Training and Awareness
More details on each of the above major areas of service are given on the next page.
Our approach to Basel III Compliance
1. Riskpro’s Basel III projects start with a detailed gap assessment with respect to risk policy
framework, data quality and availability, use of models and technology and level of skill set
within the Bank
2. We map Bank’s compliance against each point of the Basel III requirements and issue a
Diagnostic Gap report
3. Impact study for major areas such as Capital Adequacy, capital requirements, liquidity risk
ratios etc is carried out. Results are presented to the Bank’s Board for necessary action.
Board members can then take action in the form of establishing business strategies.
4. Roadmap for Basel III compliance is then defined based on overall timelines outlined by RBI.
5. Project execution and implementation is aligned to these timelines to ensure timely
compliance as well as ensure that the Bank is not unnecessary implementing components
required for compliance much later in the program
6. Monthly status report is presented to Senior Management.
7. All regulatory changes, circulars and action plans are communicated to the Bank and
incorporated during the course of the project.

2. BASEL III ADVISORY
RISK MANAGEMENT CAPITAL CALCULATIONS & LIQUIDITY RISK MANAGEMENT
FRAMEWORKS MGMT
Develop or enhance existing
Risk Management Policies, liquidity risk framework and
Diagnostic study of impact of
procedures and frameworks that policies to meet Basel III
Basel III on capital requirements
are compliant with Basel III requirements
Advisory on effective capital
Basel III Impact Assessment & Developing and Measuring the
planning strategies over next 2-6
Diagnostic Review Liquidity Coverage Ratio and
years
Net Stable Funding Ratio
Aligning business strategies with Capital & Risk Weight
Basel III regulatory requirements Eligibility conditions for
Computation
liquidity ratios
Developing risk based pricing Capital Calculation and related
frameworks Stress Testing Liquidity Risk
templates and checklists
Comprehensive stress testing and Liquidity Calculations,
Develop a framework for Capital
back testing frameworks templates and related
Conservation Buffer
reporting formats
Basel III impact on new products IFRS Impact study
and initiatives Regulatory reporting and
liquidity disclosures
Maximising ROE
Pillar II and ICAAP enhancement
CREDIT AND MARKET RISK MODELS and BASEL III Training
TECHNOLOGY
Impact study of Counterparty Training on Basel III
Credit Risk (CCR) Market risk model validation Guidelines by RBI
as per Basel III requirements
Develop Counterparty Credit
Risk Policy as required by Basel III Training and
Credit value adjustment
Pillar II of Basel III framework workshops
models for credit risk
CCR for Derivative Exposures IRB Impact Risk Management
Recruitment and Talent
Collateral management management
Model validation
framework
Portfolio & Business Analytics
Stressed VaR for Market Risk
approach

3. Team and Resources
Riskpro has developed a strong team of Basel and Risk Professionals. Our team resources include
market risk, credit risk experts, Banking professionals, model development and validation teams,
quantitative specialist and generalists Bankers who can help to handle even the most challenging
implementations.
Checklist and Templates used in our engagement
Worksteps Remarks
Mapping against client requirements: Data requirements, Risk
Impact of Basel III on capital adequacy ration ('CAR')
measurements & calculations
Excel template for sourcing all required data points specific to
Data identification for impact assessment
conducting the impact analysis
Excel model for calculating incremental capital requirements
Determining impact of Basel III on CAR
under Basel III
Requirement under ICAAP, based on business strategy and
Capital management plan incorporating Basel III aspects
forecasted balance sheet and P&L
Presentation on Basel III, its evolution and impact Ready presentation - shortcomings of Basel II, Basel III
assessment components and impact of Basel III
Checklists to evaluate Basel III readiness focusing on Mapping against client requirements: Check lists for
six key areas assessments
Assessment of the regulatory capital computation process and
High quality capital base
capital management plan, if any
Risk metrics and processes governing counterparty credit risk
Enhanced risk coverage
and securitization framework
Measures adopted by bank to minimize impact of pro-cyclicality
Pro-cyclicality
on capital adequacy
Pre-emptive measures to minimize impact of additional capital
Systemic importance of the institution
requirement for systemically important institutions
Comprehensive review of LCR, NSFR and the monitoring &
Global liquidity standards
reporting framework governing the same
Leverage Ratio Calculation of leverage ratio and associated processes
Disclosure requirements
MS Word template for Basel III disclosures Template with specific disclosure requirements under Basel III
Checklist to assess disclosure policies and governance
Checklist to assess coverage of disclosures
framework around the same
Next Steps
Riskpro is very keen to partner with your organisation to ensure smooth implementation and
compliance with RBI’s timelines for Basel III implementation. Please contact us for more details.

4. Annexure: Basel III Training
Session Topic Key Learning Duration
Recap of Basel II and  A quick recap of Basel II 2 Hours
evolution of Basel III  Evolution to Basel III and key enhancements
Capital and Leverage Ratio  Raising quality of the capital base 2 Hours
 Complete understanding of eligible capital under Basel III
 Exposure measurement and computation process
 Calibration of the leverage ratio
Harmonizing liquidity  Understanding of LCR, NSFR and liq. management 2 Hours
standards framework
 Net stable funding ratio (NSFR): measurement
methodology
 Impact of harmonizing liquidity standards
Countering pro-cyclicality  Mitigating pro-cyclicality & the need for counter-cyclical 1 Hour
buffer
 Understanding enhanced securitization & CCR framework 2 Hours
Enhancing risk coverage  Forward looking provisioning
 Building capital buffers through capital conservation
Total Training 9 Hours