Abstract
Credit Risk can be regarded as an inherent component of the banking business. The introduction of customized banking products and services has made the task of judging the risk impact of credit decisions all the more challenging and time consuming. Also the increasing inter-linkages amongst the various financial institutions since the late eighties have ensured that any risk event experienced by one financial institution has the potential to impact others also. In order to improve credit risk monitoring & measurement so that capital requirements of banks are more in line with the nature of risks they are being exposed to the BASEL Committee on Banking Supervision proposed the New BASEL II Accord in 1999 which will replace the exiting Accord of 1988.

This white paper tries to analyze the various requirements and issues confronting banks while implementing a Credit Risk BASELII Solution. It also offers a solution framework for banks based on a series of highly flexible and inter-connected modules that capture and monitor every aspect of all possible credit risk variables in a bank. Every module is highly parameter driven to take care of changing credit risk requirements and local regulations. Capital Charges and Risk Weights for all the three approaches of Credit Risk BASELL II can be obtained from a single platform.

Author Abhijit Ghosh

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