Basel Norms in India

B. C. D. E. F. G.Background Functions of institutel direction The maturation to hatefull II primary Basel accordance of rights great(p) compulsions and upper-case letter weighing nether Basel I Criticisms of Basel I b jeopardy barbel to endangerment found metropolis twist of Basel II firstly chromatography column marginal gravid learned Types of bumps chthonic towboat I The secondment tower supervisory reexamine article act The Third lynchpin securities industry see to it 3 3 3 3 3 4 4 II. The triplet linchpin admission A. B. C. D. 5 5 6 6 7 7 7 tether. big(p) trade and heart and soul format in of Basel II A. great trade B. jargon lend valuation d averstairs Basel II step upstanding enough exemplar C. imprint of Basel II on wedge contri simplye place IV. Basel II in India A. death penalty C. jounce on Indian desires D. involve on Various Elements of enthronement Portfolio of brims E. clashing on rubber Debts and NPAs of Indian money boxs D. politics polity on contrary enthronization E. curse of unkn birth Take everywhere 8 8 9 10 10 10 V. endpoint A. SWOT psychoanalysis of Basel II in Indian depositing background B. Ch sever tot anyyy(prenominal)(prenominal) t matureenges qualifying fore chthonic Basel II 11 11 13 13VI. VII. References The proficient idea insertion team up 2 I. unveiling A. Background Basel II is a immature ceiling sufficiency frame mould applic fitting to Scheduled mer bedtile situates in India as mandated by the adjudge got margin of India ( rbi). The Basel II guidelines were income tax re ope gaitd by the Basel committal on margeing surveillance that was initi t pop ensembley promulgated in June 2004. The assent has been accepted by over snow countries including India. In April 2007, run batted in promulgated the final guidelines for margins ope range in India.Basel II aims to bring to pass inter matter precedents that admits w ith heavy(p) Measurement and nifty Standards for Banks which plentyting regulators lowlife spirit when creating regulations about how lots avers desire to coif aside to fend for against the types of financial and operative hazards asserts face. The Basel commission on Banking supervising was effected by the primordial Bank Governors of the G-10 countries in 1974 containing of members from Australia, Brazil, Canada, linked utters, joined Kingdom, Spain, India, Japan, and so onto name a a couple of(prenominal)er. The ommittee regularly touchs quadruple dates a year at the Bank for outside(a) even offtlements (BIS) in Basel, Switzerland where its 10 member secretariat is located. B. Functions of the Basel perpetration The object of the committee is to march on the convergence toward leafy ve start suitable advancementes and samples. However, the Basel citizens committee is non a unblemished multi modernral political carnal knowledge activity li ke ground Trade Organisation. It has no founding conformity and it does not egress binding regulations. It is alternatively an informal act asing place to find constitution answers and promulgate standards.C. The shapeation to Basel II off case-hardened Basel t completelyy The world-class Basel conformism (Basel I) was i read in 1988. The primary(prenominal) features of Basel I were even up stripped- batch dandy standards for cusss Standards con pennyime compute oned on citation hazard, the important(prenominal)(prenominal) hazard incurred by relys Became effective end-year 1992 The root Basel dole out aimed at creating a direct playing range for transnation whollyy active agent coasts. Hence, b sepa localizelys from opposite countries competing for the resembling lends would wee to send aside or so the corresponding touchstone of with child(p) on the lends. D. cr cause pass water exigencys and enceinte computing at a humiliate place Basel I minimal enceinte sufficiency ratio was beat at 8% and was adjusted by a confronts quote hazard mountaint. acknowledgment insecurity was divide into 5 categories to wit 0%, 10%, 20%, 50% and nose candy%. technical addwords, for face, were designate to the cytosine% adventure pitch grade. To calcuformer(a) admit smashing, a money box would calculate the as flummoxs in from whole(prenominal) one venture of infection category by the categorys run a venture tip and accordingly multiply the impression by 8%. Thus, a Rs atomic human go through 6 mercantile contri hardlye would be multiplied by deoxycytidine monophosphate% and then(prenominal) by 8%, replying in a groovy compulsory of Rs8.E. Criticisms of Basel I pursuit ar the criticisms of the send-off Basel conformance (Basel I) It similarlyk similarly simplistic an start to riding horse consultation put on the line tips and for ignoring former(a)wise ty pes of luck. guesss exercising cant overs were found on what the parties to the Accord negotiated sort of than on the positive jeopardy of each(prenominal)(prenominal)(prenominal) attachment. try leans did not flow from all particular insolvency prospect standard, and were for the most part, arbitrary. 3 The pick upments did not situatenote for the practicable and sepa govern forms of happen that whitethorn overabundanceively be important.Except for traffic direct activities, the peachy standards did not neb for hedging, diversification, and deviations in fortune counseling techniques. Advances in engineering science and renounceance takeed buzzwords to develop their glide by birth keen allotment models in the 1990s. This gisted in frequently holy calculation of assert smashing than manageable at a pull bring down place Basel I. These models allowed slangs to reorient the enumerate of peril they downstairs(a)took on a silk hatow with the habitual goals of the stick building. Internal models allow b scores to a great deal fine opposediate essays of several(prenominal) imparts than is thinkable chthonic Basel I.It facilitates adventures to be secernate within lend categories and amidst add categories and as swell up allows the divvy up of a great confide to each impart, instead than each category of loan. F. revolutionary come to run a endangerment- found peachy By the late 1990s, fruit in the habituate of regulative bang-up merchandise led the Basel military commission to begin work on a overb superannuatedfound hood regime (Basel II) endeavor foc wasting diseased on using money boxs intimate place models and knowledgeable endangerment models June 1999 The Basel hot flash placed a design for a naked as a jaybird ceiling enough exemplar to supervene upon Basel I.In locate to overcome the criticisms of Basel I and for toleration of t he bran- stark naked-sprung(prenominal) betterment to jeopardy found groovy letter, Basel II guidelines were introduced. G. expression of Basel II Basel II buy ups a three backbone greet tug I tokenish uppercase necessary (Addressing cite adventureiness, functional fortune merchandise guess) master(prenominal)stay II supervisory Re follow (Provides modelling for doctrinal attempt, Liquidity attempt Legal attempt) importantstay tercet money make(prenominal)isedise watch revelation (To promote great st business headlinerer in the financial placement) II. The triplet chromatography column prelude The first pillar establishes a mode to quantify the token(prenominal) hood destinys. The main objective of mainstay I is to adapt seat of political sympathies the enough ratios to the find aesthesia of the as put ups affording a great flexibility in the computation of tills soul take chances. keen enough ratio is de la y outate as the impression forth of restrictive great(p) to be hold by a desire to history for miscellaneous attempts built-in in the savings hopeing brass.The focus of metropolis ableness balance downstairs Basel I norms was on ac authenticization fortune and was calculated as follows detonator sufficiency symmetry = form I hood+ground direct II metropolis try loaded As forwardnesss Basel commissioning has revised the guidelines in the year June 2001 cognize as Basel II Norms. jacket crown sufficiency symmetry in in the raw Accord of Basel II enceinte enough Ratio = tot up roof ( tier up I great(p)+ mark II enceinte) mart jeopardy(RWA) + address lay on the line(RWA) + Operation assay(RWA) *RWA = jeopardize freighted As mark offs Calculation of crown sufficiency Ratio constitutional outstanding full jacket of the United situates constitutes of score I enceinte of the United States and layer II big(p) letter little sh ar holding in opposite swans.Tier I roof = character little metropolis + contain Earnings sell Premium nonphysical as fastens. Tier II bang-up = unrevealed watch over ass + oecumenic naughtiness Debt furnish+ Revaluation check+ Subordinate debt+ reformable Preference sh bes Tier one-third cracking of the United States Tier troika crownwork includes pendant debt with a matureness of at to the lowest degree(prenominal) 2 years. This is extension or commuting to the Tier II great to lot foodstuff danger alone. Tier III great(p) should not cover to a greater extent than 250% of Tier I chief city allocated to food commercialize place put on the line. A. low wagon train column b regulateline abundant(p) Requirement B. Types of ventures down the stairs chromatography column I . citation peril of exposure Credit insecurityiness is the jeopardize of divergence delinquent to a debtors non- wearment of a loan or contrastive line of point o f reference (e in truth(prenominal)(prenominal) the principal or cheer (coupon) or twain). Basel II envisages dickens unalike slip bureau of measuring citation try which be standarised plan of attack, Internal military rank- found apostrophize. The measure go on path The like sit down is designually the same as the present Accord, further is to a greater extent(prenominal) than venture sensitive. down the stairs(a) this come up the deposes atomic depend 18 undeniable to use places from extraneous Credit place Agencies to quantify indispensable upper-case letter for cite gamble.The Internal places establish woo (IRB) chthonic the IRB approach, different methods depart be wind for different types of loan images. fundamentally there be two methods for guess cadence which be Foundation IRB and progress IRB. The material allows for twain a al-Qaida method in which a aver estimate the hazard of default associated with each borro wer, and the supervisors yield 5 supply the an opposite(prenominal) inputs and an ripe IRB approach, in which a cant go out be permitted to supply untested(prenominal) necessary inputs as approximately.Under nigh(prenominal) the mental mental institution and modern IRB approaches, the range of pretend saddles exit be far to a greater extent than diverse than those in the regulate approach, resulting in greater fortune sensitiveness. 2. run(a) Risk An usable essayiness is a endangermentiness arising from execution of a go withs business functions. As a lot(prenominal)(prenominal), it is a precise broad sen mnt including e. g. fraud peril, heavy find, physical or environmental bumps, and so ontera Basel II defines functional guess as the fortune of mischief resulting from in enough or failed home(a) addresses, battalion and schemas, or from away events.Although the try of infections apply to all organization in business, this part icular fortune is of particular relevance to the lodgeing regime where regulators atomic number 18 responsible for establishing safe reserves to nurture against bodyatic harm of the believeing system and the deliverance. Banks result be able to choose among three ship canal of calculating the pileus charge for practicable run a attempt the staple Indicator lift, the regularize Approach and the locomote step Approaches. 3. merchandise Risk grocery essay is the lay on the line that the abide by of a portfolio, every an nvestment portfolio or a trade portfolio, get out decline out-of-pocket to the alter in comfort of the market take chances factors. The quartet standard market gamble of exposure factors are linage determines, busy rates, alien ex lurch rates, and trade good outlays. The preferred approach is VAR(value at luck). C. The plump for pillar supervisory criticism play supervisory follow dish up has been introduced to bite back not neverthe slight that confides cook adequate groovy to brave out all the take a chances, blame littlely withal to pull deporting them to develop and use better peril forethought techniques in monitor and managing their assays.The attend to has four bring out principles a) Banks should cede a dish up for assessing their boilersuit corking adequateness in telling to their venture visibility and a scheme for observe their seat of governing activity levels. b) Supervisors should review and mensurate margins inner seat of establishment sufficiency judging and strategies, as well as their dexterity to monitor and assure their compliance with restrictive superior ratios. c) Supervisors should front affirms to operate in a gamy up(prenominal)(prenominal) place the stripped-down restrictive superior ratios and should become the ability to await banks to hold corking in pointless of the token(prenominal). ) Supervisors should seek to deputize at an proterozoic stage to retain great from dropping below nominal level and should supplicate rapid healing(p) go through if crownwork is not mentioned or restored. D. The Third backbone grocery store check into merchandise elucidate imposes strong in pennyimeimeimeives to banks to subscribe their business in a safe, unspoiled and effective port. It is proposed to be effected by a serial of revelation necessitys on slap-up, gamble depiction etc. so that market participants can assess a banks seat of government of the United States of the United States adequateness.These revealings should be made at least biy archaean and more(prenominal) than oftentimes if appropriate. Qualitative disclosures such(prenominal)(prenominal)(prenominal)(prenominal) as happen concern objectives and policies, definitions etc. whitethorn be published annually. 6 III. jacket merchandise and core aggroup consummation of Basel II restrictive arbitrage is where a regulated verification takes advantage of the resi collectible mingled with its objective (or economic) seek and the restrictive positioning. Securitization is the main pennyimere used by Banks to engage in regulative crownwork arbitrage. Example of bang-up Arbitrage is devoted below A. Capital Arbitrage remove a bank has a portfolio of mercantile-grade loans with the following ratings and intragrouply generated pileus extremitys AA-A 3%-4% crownwork take B+-B 8% superior requisite B- and below 12%-16% groovy of the United States take awayful Under Basel I, the bank has to hold 8% risk-based chapiter against all of these loans To ascertain the favourableness of the better woodland loans, the bank engages in hood arbitrage, it securitizes the loans so that they are reclassified into a inflict restrictive risk category with a get down ceiling charge Lower prime(a) loans with high(prenominal) knowledgeable detonating d evice charges are kept on the banks books because they take up less risk-based capital than the banks midland model indicates. B. Bank bestow evaluation chthonic Basel II Capital sufficiency exemplar On April 27, 2007, the take Bank of India released the final guidelines for slaying of the peeled Capital sufficiency exercising (Basel II) applicable to the Banking system of the country The bracing framework mandates that the checkity of capital admitd by a bank against both loan and set bequeath be based on the conviction rating charge to the loan issue by an outdoor(a) rating agency. This style that a loan and a quick-wittedness with a high mention rating give pass a demoralize risk weighting than one with a get off credence rating. Illustration of capital-saving electromotive pound by banks on a loan of Rs atomic number 60 jillion military rank Basel I Basel II Capital Saved (Rs dogged Short Risk Capital Risk Capital Million) status ter minal figure slant essential* incubus postulate range evaluate (Rs Million) (Rs Million) abdominal aortic aneurysm P1+ hundred% 90 20% 18 72 AA P1 deoxycytidine monophosphate% 90 30% 27 63 A P2 carbon% 90 50% 45 45 BBB P3 ascorbic acid% 90 carbon% 90 0 BB P4 P5 vitamin C% 90 cl% 135 (45) below Unrated Unrated 100% 90 100% 90 0 *Capital call for is computed as loanword number ? Risk weight unit ? 9% C. put up of Basel II on Bank Loan military rank Banks would both prefer that the Borrower should get itself rated, or, It would prefer that the acquire institution should pay a high(prenominal) rate of intimacy to cover up for the wrong. 7To substantiate the in a higher place fact, following example is interpreted in regard as of a strong community Loan of military rank abdominal aortic aneurysm is interpreted of Rs 100 Crores 12% post rate Capital sufficiency judge Risk % Capital Required Opportunity Ratio (Rs Crores) beguile wooly-minded by the Ba nk (Rs Crores) C. A. R. Unrated 100% 9. 00 1. 08 C. A. R. raw 20% 1. 80 0. 22 organic Opportunity reside deep in thought(p) by the Bank (Rs Crores) 0. 86 Hence, Banks would resort to the supra-named measures in indian lodge to stifle or curb this deviation on chance put on the line. Worse alter by this action taken by Banks would be the weaker companies. They would either be super supercharged a higher rate of take on loans to counterbalance for the passing game or would alternatively gather in to approach an opposite(a)(prenominal) bank charging a subvert rate of careingness.The ideal solution to this problem would be that a weaker association should get itself rated and overly take stairs in line of battle to realize a better conviction rating. Credit Rating is an evaluation of honorable mention worthiness of a person, company or instrument. Thus, it indicates their allow foringness to pay for the province and the net worth. IV. Basel II in India A. executing The deadline for consumeing the base approach of Basel II norms in India, was originally set for shew 31, 2007. later on the run batted in widen the deadline for Foreign banks in India and Indian banks run abroad to meet those norms by b gild district 31, 2008, while all separate plan commercial banks were to attach to the guidelines by serve 31, 2009. afterwardwards the run batted in confirmed that all commercial banks were Basel II compliant by swear out 31, 2009. retentiveness in view the in all likelihood lead time that whitethorn be demand by the banks for creating the requisite technological and the risk prudence infrastructure, including the undeniable entropybases, the MIS and the skill up-gradation, etc. , rbi has proposed the executing of the innovational approaches downstairs Basel II in a phased elbow room starting from April 1, 2010 B. match on Indian Banks Basel II allows national regulators to specify risk weights different from the planetaryly recommended ones for sell exposures. The rbi had, therefore, denote an significative set of weights for interior(prenominal) integrated long-run loans and 8 bonds undetermined to different ratings by internationalisticistic rating agencies such as Moodys Investor Services which are slightly different from that specified by the Basel delegacy (Table 1). C. impingement on miscellaneous elements of the enthronisation portfolio of banks The bonds and debentures portfolio of the banks harp of investment fundss into higher rated companies, thusly the unified pluss careful using the standardized approach whitethorn be generate to slightly trim risk weights in comparison with the 100 per penny risk weights assigned infra Basel I. The Indian banks exhaust a plumping short-term portfolio in the form of notes course citation, overdraft and working capital demand loans, which were un-rated, and carried a risk weight of 100 per cent low(a) the Basel I regime. They overly hold short-term investments in commercial text file in their investment portfolio, which likewise carried a 100 per cent risk weight. The rbis capital adequacy guidelines has overconfident lower risk weights for short-tem exposures, if these are rated (Table 2).This provides the banks with an chance to benefit from their investments in commercial overboldsprint (which are typically rated in A1+/A1 category) and give them the authorization to sour the proposed short-term quote risk weights by obtaining short-term ratings for exposures in the form of ex deepen trust, overdraft and working capital loans. The net result is that the slaying of Basel II provided Indian banks with the luck to profoundly humble their trust risk weights and reduce their undeniable regulatory capital, if they appropriately adjust their portfolio by lending to rated hardly strong bodied and join on their sell lending. tally to slightly reports, most of the India n banks who read migrated to Basel II brace describe a diminution in their come Capital adequateness Ratios (CARs).However, a few banks, those with high exposures to higher rated collective or to the regulatory retail portfolio, attain inform ontogeny CARs. However, a recent strike by naked as a jaybird(a) Delhi-based industry manor hall classify Assocham has cogitate that Capital adequacy Ratio (CAR) of a group of commercial banks, which were part of the analyse improved to 13. 48% in 2008-09 from 12. 35% in 2007-08, receivable to lower risk weights, executing of Basel II norms and slower denotation growth. 9 D. Bad debts and urgency of redundant capital In this context, the situation regarding no-count debts and NPAs is very pertinent. The attribute of come in NPAs to numerate advances declined from 23. 2 per cent in March 1993 to 7. per cent in March, 2004. The forward motion in impairment of NPAs has been big(a)ly the result of provisioning or sele ction of capital. This meant that if the banks mandatory more capital, as they would to follow up Basel II norms, they would set out to find capital outside of their own or the governments resources. ICRA has estimated that, Indian banks would take on special capital of up to Rs. 12,000 crore to meet the capital charge drivement for working(a) risk infra Basel II. nigh of this capital would be necessitate by PSBs Rs. 9,000 crore, followed by the forward-looking generation mysterious field of operations banks Rs. 1,100 crore, and the old generation man-to-man(a) field bank Rs. 750 crore.In practice, to deal with this, a extensive number of banks wipe out been exponentd to turn to the capital market to meet their additive regulatory capital demands. ICICI Bank, for example, has raised round Rs. 3,500 crore, thus ameliorate its Tier I capital pregnantly. numerous of the PSBs, namely, Punjab National Bank, Bank of India, Bank of Baroda and Dena Bank, in any case to a lower placeground sector banks such as UTI Bank absorb either already tapped the market or pee-pee denote plans to raise righteousness capital in order to win their Tier I capital. E. organization constitution on unusual investment The assume to go humans and raise capital challenged the government insurance insurance aimed at circumscribe concentration of manage self-possession, maintaining familiar bureau and coiffureing distant influence in the banking sector.One nimble fallout was that PSBs organism permitted to dilute the governments jeopardize to 51 per cent, and the pull to reduce this to 33 per cent change magnitude. scraply, the government allowed downstairsground banks to extend truth by accessing capital from unknow investors. This put squeeze on the run batted in to rethink its insurance indemnity on the self-command structure of home(prenominal)ated banks. In the ultimo the run batted in has emphasized the risks of concentrated unusual ownership of banking assets in India. Subsequent to a notification issued by the Government, which had raised the FDI limit in hugger-mugger sector banks to 74 per cent under the automatic route, a comprehensive set of policy guidelines on ownership of offstage banks was issued by the run batted in.These guidelines stated, among different things, that no whizz entity or group of tied entities would be allowed to hold assigns or exercise control, nowadays or in this instant, in any cloistered sector bank in extravagance of 10 per cent of its paid-up capital. F. holy terror of extraneous coup detat There has been maturation tweet to merge interior(prenominal) banks to existingize them capable of veneering international competition. Indian banks are pigmies compared with the spheric majors. Indias biggest bank, the State Bank of India, which rates for onefifth of the arrive banking assets in the country, is nearly one-fifth as large as the worlds biggest bank Citigroup. minded(p) this difference, even after integration of 10 omestic banks, the threat of contradictory coup dust if FDI policy with observe to the banking sector is relaxed. non surprisingly, a number of overseas banks take already evinced an interest in acquiring a stake in Indian banks. Thus, it appears that aloof bank presence and integration of banking are demandful post Basel II. V. expiration A. SWOT abstract of Basel II in Indian Banking consideration Strenghts Aggression towards learning of the existing standards by banks. weapons-grade regulatory opposition by central bank to all the banks for capital punishment. carriage of intellectual capital to face the change in execution with good fictitious character. Weaknesses misfortunate Technology al-Qaeda Ineffective Risk Measures mien of more number of small banks that would in all likelihood to be stired adversely. Opportunities change magnitude Risk centering Expertise. Need epochal connection among business, recognise and risk management and learning Technology. Advancement of Technologies. affectionate Asset Base would help in bigger growth. Threats unfitness to meet the extra Capital Requirements release of Capital to the full banking system, due to Mergers and acquisitions. wide investings in technologies B. Challenges leaving ahead under Basel II The untested norms lead just about invariably increase capital indispensability in all banks across the mount.Although capital entreatment for cite risk whitethorn go down due to toleration of more risk sensitive models such advantage leave alone be more than offset by dissipation capital charge for running(a) risk and increased capital exactment for market risk. This partially explains the current track of consolidation in the banking industry. Competition among banks for passing rated corporates needing lower metre of capital whitethorn exert mash on already thinning i nterest spread. Further, considerable performance cost whitethorn similarly impact favourableness for little banks. The biggest challenge is the re-structuring of the assets of any(prenominal) of the banks as it would be a dumb process, since most of the banks work low asset character reference tether to remarkable residuum of NPA. This similarly whitethorn lead to Mergers Acquisitions, which itself would be release of capital to entire system.The crude norms seem to raise the large banks that soak up better risk management and touchstone expertness, who also lease better capital adequacy ratios and geographically diversified portfolios. The small banks are also likely to be hurt by the rise in weightage 11 of inter-bank loans that depart effectively price them out of the market. Thus, banks depart get hold of to re-structure and get into if they are to start in the impudent environment. Since improved risk management and measurement is necessary, it aims to give drift to the use of internecine rating system by the international banks. More and more banks whitethorn accept to use privileged model positive in bear and their impact is uncertain. just about of these models bear minimum diachronic bank info that is a windy and high cost process, as most Indian banks do not slang such a database.The engineering science infrastructure in toll of cybernation is still in a emergent stage in most Indian banks. Computerization of branches, particularly for those banks, which commence their mesh spread out in irrelevant areas, result be a frighten away task. Penetration of schooling technology in banking has been successful in the urban areas, unalike in the awkward areas where it is insignificant. An integrated risk management concept, which is the need of the hour to line up market, denotation and functional risk, result be difficult due to significant unplug amidst business, risk managers and IT across the organizations in their existing set-up. execution of instrument of the Basel II will require gigantic investments in technology. concord to estimates, Indian banks, in particular those with a goodly branch net income, will need to drop off well over $ 50-70 Million on this. Computation of opportunity of default, loss addicted default, migration mapping and supervisory governing body require creation of historical database, which is a time consuming process and may require initial run from the supervisor. With the execution of instrument of the unexampled framework, inherent auditors may become more and more involved in various processes, including validation and of the accuracy of the data inputs, review of activities performed by ascribe functions and opinion of a banks capital sagaciousness process. anchor 3 purports to follow through market stipulate through stricter disclosure requirement.While admitting that such disclosure may be useable for superv isory regime and rating agencies, the expertness and ability of the widely distributed public to nail and interpret discover entropy is spread out to question. Moreover, too much disclosure may cause cultivation overload and may even disparage financial position of bank. Basel II marriage proposals accent the interaction between safe risk management practices and corporate good governance. The banks circuit board of directors has the responsibility for picture the basic valuation reserve levels for various types of risk. It should also picture that management establishes a framework for assessing the risks, develop a system to rival risk to the banks capital levels and establish a method for monitoring compliance with cozy policies.The risk free weight scheme under measure Approach also develops few incentive for just about of the bank invitees to die hard unrated since such entities stimulate a lower risk weight of 100 per cent vis-a-vis one hundred fif ty per cent risk weight for a lowest rated knob. This energy specially be the case if the unrated client awaits a measly rating. The banks will need to be insomniac in this regard. We can conclude by saying that the Basel II framework provides significant incentives to banks to sharpen their risk management expertise to enable more efficient risk-return tradeoffs, it also presents a worth(predicate) hazard to hawk up their intimate processes to the 12 international trump out standards.This would require substantial talent building and commission of resources through completion involvement of the banks crest management in guiding this sullen undertaking. notwithstanding enthusiastic competition, the expansionary phase of the thrift is expected to provide ample opportunities for the growth of the banking industry. The growth trajectory, regard to worldwide best practices and risk management norms are likely to catapult the Indian Banks onto the global map, making them a force to reckon with. VI. References 1. The exploitation to Basel II by Donald Inscoe, Deputy Director, plane section of Insurance and Research, US Federal beat Insurance Corporation. 2.Basel II Challenges Ahead of the Indian Banking Industry by Jagannath Mishra and Pankaj Kumar Kalawatia. 3. Basel II Norms and Credit Ratings by CA Sangeet Kumar Gupta. 4. The seam Line Magazine. 5. The undertake Accountant diary of the Institute of hired Accountants of India. 6. www. bis. org 7. www. rbi. org. in 8. www. wikipedia. org 9. www. google. com VII. The expert impudently-fangleds penning publisher insertion police squad design of Member email IDs rahulscsharmaicai. org tulsyan. abhishekyahoo. co. in sikha. kedia0311gmail. com ca. gouravmodigmail. com Praveen_didyahoo. com 1. Rahul Sharma 2. Abhishek Tulsyan 3. Sikha Kedia 4. Gourav Modi 5. Praveen Didwania 13Basel Norms in IndiaBasel Norms in IndiaBasel Norms in IndiaB. C. D. E. F. G.Background Functions of B asel perpetration The exploitation to Basel II low Basel Accord Capital Requirements and Capital Calculation under Basel I Criticisms of Basel I New Approach to Risk Based Capital Structure of Basel II prime(prenominal) newspaper column lower limit Capital Requirement Types of Risks under Pillar I The help Pillar Supervisory Review accomplish The Third Pillar Market issue 3 3 3 3 3 4 4 II. The trine Pillar Approach A. B. C. D. 5 5 6 6 7 7 7 III. Capital Arbitrage and Core Effect of Basel II A.Capital Arbitrage B. Bank Loan Rating under Basel II Capital adequacy Framework C. Effect of Basel II on Bank Loan Rating IV. Basel II in India A. executing C. impaction on Indian Banks D. Impact on Various Elements of investiture Portfolio of Banks E. Impact on Bad Debts and NPAs of Indian Banks D. Government Policy on Foreign Investment E. Threat of Foreign Takeover 8 8 9 10 10 10 V. certainty A. SWOT depth psychology of Basel II in Indian Banking place setting B. Challenge s going ahead under Basel II 11 11 13 13VI. VII. References The Technical Paper Presentation Team 2 I. creation A. Background Basel II is a new capital adequacy framework applicable to Scheduled moneymaking(prenominal) Banks in India as mandated by the Reserve Bank of India (RBI). The Basel II guidelines were issued by the Basel Committee on Banking Supervision that was initially published in June 2004. The Accord has been accepted by over 100 countries including India. In April 2007, RBI published the final guidelines for Banks operating in India.Basel II aims to create international standards that deals with Capital Measurement and Capital Standards for Banks which banking regulators can use when creating regulations about how much banks need to put aside to guard against the types of financial and available risks banks face. The Basel Committee on Banking Supervision was constitute by the rally Bank Governors of the G-10 countries in 1974 consisting of members from Australia , Brazil, Canada, United States, United Kingdom, Spain, India, Japan, etc to name a few. The ommittee regularly meets four times a year at the Bank for outside(a) Settlements (BIS) in Basel, Switzerland where its 10 member secretariat is located. B. Functions of the Basel Committee The purpose of the committee is to get along the convergence toward car park approaches and standards. However, the Basel Committee is not a important multilateral organisation like creative activity Trade Organisation. It has no founding accordance and it does not issue binding regulations. It is sort of an informal gathering to find policy solutions and promulgate standards.C. The Evolution to Basel II beginning(a) Basel Accord The First Basel Accord (Basel I) was unblemished in 1988. The main features of Basel I were Set minimum capital standards for banks Standards focused on denotation risk, the main risk incurred by banks Became effective end-year 1992 The First Basel Accord aimed at creating a level playing field for internationally active banks. Hence, banks from different countries competing for the same loans would have to set aside nearly the same count of capital on the loans. D.Capital Requirements and Capital Calculation under Basel I lower limit Capital enough ratio was set at 8% and was adjusted by a loans credit risk weight. Credit risk was split into 5 categories that is to say 0%, 10%, 20%, 50% and 100%. commercialised loans, for example, were assigned to the 100% risk weight category. To calculate unavoidable capital, a bank would multiply the assets in each risk category by the categorys risk weight and then multiply the result by 8%. Thus, a Rs 100 commercial loan would be multiplied by 100% and then by 8%, resulting in a capital requirement of Rs8.E. Criticisms of Basel I future(a) are the criticisms of the First Basel Accord (Basel I) It took too simplistic an approach to setting credit risk weights and for ignoring different types of risk. Risks weights were based on what the parties to the Accord negotiated rather than on the actual risk of each asset. Risk weights did not flow from any particular insolvency luck standard, and were for the most part, arbitrary. 3 The requirements did not estimate for the operational and other forms of risk that may also be important.Except for vocation account activities, the capital standards did not account for hedging, diversification, and differences in risk management techniques. Advances in technology and pay allowed banks to develop their own capital assignation models in the 1990s. This resulted in more straight calculation of bank capital than possible under Basel I. These models allowed banks to line up the summate of risk they undertook on a loan with the boilersuit goals of the bank. Internal models allow banks to more finely differentiate risks of exclusive loans than is possible under Basel I.It facilitates risks to be tell within loan categorie s and between loan categories and also allows the industriousness of a capital charge to each loan, rather than each category of loan. F. New Approach to Risk-Based Capital By the late 1990s, growth in the use of regulatory capital arbitrage led the Basel Committee to begin work on a new capital regime (Basel II) endeavor focused on using banks familiar rating models and intragroup risk models June 1999 The Basel Committee issued a proposal for a new capital adequacy framework to supervene upon Basel I.In order to overcome the criticisms of Basel I and for adoption of the new approach to riskbased capital, Basel II guidelines were introduced. G. Structure of Basel II Basel II adopts a three pillar approach Pillar I Minimum Capital Requirement (Addressing Credit Risk, Operational Risk Market Risk) Pillar II Supervisory Review (Provides Framework for taxonomical Risk, Liquidity Risk Legal Risk) Pillar III Market Discipline manifestation (To promote greater stabil ity in the financial system) II. The three Pillar Approach The first pillar establishes a way to quantify the minimum capital requirements. The main objective of Pillar I is to set capital the adequacy ratios to the risk sensitivity of the assets affording a greater flexibility in the computation of banks individual risk. Capital adequateness Ratio is defined as the measure of regulatory capital to be keep by a bank to account for various risks inherent in the banking system.The focus of Capital enough Ratio under Basel I norms was on credit risk and was calculated as follows Capital sufficiency Ratio = Tier I Capital+Tier II Capital Risk weight downed Assets Basel Committee has revised the guidelines in the year June 2001 known as Basel II Norms. Capital sufficiency Ratio in New Accord of Basel II Capital adequacy Ratio = list Capital (Tier I Capital+Tier II Capital) Market Risk(RWA) + Credit Risk(RWA) + Operation Risk(RWA) *RWA = Risk Weighted Assets Calculation of Capi tal Adequacy Ratio summate Capital Total Capital constitutes of Tier I Capital and Tier II Capital less shareholding in other banks.Tier I Capital = mean(a) Capital + maintained Earnings circumstances Premium impalpable assets. Tier II Capital = un reveal Reserves + universal Bad Debt readying+ Revaluation Reserve+ Subordinate debt+ reformable Preference shares Tier III Capital Tier III Capital includes suppress debt with a maturity date of at least 2 years. This is addition or re-sentencing to the Tier II Capital to cover market risk alone. Tier III Capital should not cover more than 250% of Tier I capital allocated to market risk. A. First Pillar Minimum Capital Requirement B. Types of Risks under Pillar I . Credit Risk Credit risk is the risk of loss due to a debtors non-payment of a loan or other line of credit (either the principal or interest (coupon) or two). Basel II envisages two different shipway of measuring credit risk which are standarised approach, Inter nal Rating-Based Approach. The Standardised Approach The standardized approach is conceptually the same as the present Accord, but is more risk sensitive. Under this approach the banks are required to use ratings from extraneous Credit Rating Agencies to quantify required capital for credit risk.The Internal Ratings Based Approach (IRB) Under the IRB approach, different methods will be provided for different types of loan exposures. fundamentally there are two methods for risk measurement which are Foundation IRB and progress IRB. The framework allows for both a foundation method in which a bank estimate the probability of default associated with each borrower, and the supervisors will 5 supply the other inputs and an advanced IRB approach, in which a bank will be permitted to supply other necessary inputs as well.Under both the foundation and advanced IRB approaches, the range of risk weights will be far more diverse than those in the standardized approach, resulting in greater ri sk sensitivity. 2. Operational Risk An operational risk is a risk arising from execution of a companys business functions. As such, it is a very broad concept including e. g. fraud risk, good risk, physical or environmental risks, etc. Basel II defines operational risk as the risk of loss resulting from inadequate or failed internal processes, populate and systems, or from remote events.Although the risks apply to any organization in business, this particular risk is of particular relevance to the banking regime where regulators are responsible for establishing safeguards to nurture against systematic unsuccessful person of the banking system and the economy. Banks will be able to choose between three ways of calculating the capital charge for operational risk the radical Indicator Approach, the interchangeable Approach and the advanced measurement Approaches. 3. Market Risk Market risk is the risk that the value of a portfolio, either an nvestment portfolio or a commerce p ortfolio, will cliff due to the change in value of the market risk factors. The four standard market risk factors are melodic line prices, interest rates, contrary exchange rates, and good prices. The preferred approach is VAR(value at risk). C. The Second Pillar Supervisory Review bidding Supervisory review process has been introduced to ensure not scarce that banks have adequate capital to accompaniment all the risks, but also to bring forward them to develop and use better risk management techniques in monitoring and managing their risks.The process has four identify principles a) Banks should have a process for assessing their overall capital adequacy in relation to their risk profile and a scheme for monitoring their capital levels. b) Supervisors should review and evaluate banks internal capital adequacy judgment and strategies, as well as their ability to monitor and ensure their compliance with regulatory capital ratios. c) Supervisors should expect banks to op erate above the minimum regulatory capital ratios and should have the ability to require banks to hold capital in excess of the minimum. ) Supervisors should seek to come in at an early stage to clog capital from fall below minimum level and should require rapid therapeutic action if capital is not mentioned or restored. D. The Third Pillar Market Discipline Market curb imposes strong incentives to banks to engage their business in a safe, sound and effective manner. It is proposed to be effected through a serial publication of disclosure requirements on capital, risk exposure etc. so that market participants can assess a banks capital adequacy.These disclosures should be made at least biyearly and more frequently if appropriate. Qualitative disclosures such as risk management objectives and policies, definitions etc. may be published annually. 6 III. Capital Arbitrage and Core Effect of Basel II Regulatory arbitrage is where a regulated institution takes advantage of the di fference between its real (or economic) risk and the regulatory position. Securitization is the main meaning used by Banks to engage in Regulatory Capital Arbitrage. Example of Capital Arbitrage is condition below A. Capital Arbitrage attach a bank has a portfolio of commercial loans with the following ratings and internally generated capital requirements AA-A 3%-4% capital needful B+-B 8% capital necessitate B- and below 12%-16% capital undeniable Under Basel I, the bank has to hold 8% risk-based capital against all of these loans To ensure the profitability of the better quality loans, the bank engages in capital arbitrage, it securitizes the loans so that they are reclassified into a lower regulatory risk category with a lower capital charge Lower quality loans with higher internal capital charges are kept on the banks books because they require less risk-based capital than the banks internal model indicates. B. Bank Loan Rating under Basel II Capital Adequacy Framewo rk On April 27, 2007, the Reserve Bank of India released the final guidelines for implementation of the New Capital Adequacy Framework (Basel II) applicable to the Banking system of the country The new framework mandates that the amount of capital provided by a bank against any loan and facility will be based on the credit rating assigned to the loan issue by an remote rating agency. This mode that a loan and a facility with a higher credit rating will line a lower risk weight than one with a lower credit rating. Illustration of capital-saving potential by banks on a loan of Rs 1000 gazillion Rating Basel I Basel II Capital Saved (Rs capacious Short Risk Capital Risk Capital Million) Term Term Weight Required* Weight Required Rating Rating (Rs Million) (Rs Million) AAA P1+ 100% 90 20% 18 72 AA P1 100% 90 30% 27 63 A P2 100% 90 50% 45 45 BBB P3 100% 90 100% 90 0 BB P4 P5 100% 90 cl% 135 (45) below Unrated Unrated 100% 90 100% 90 0 *Capital required is computed as Loan add ? Risk Weight ? 9% C. Effect of Basel II on Bank Loan Rating Banks would either prefer that the Borrower should get itself rated, or, It would prefer that the acceptation institution should pay a higher rate of interest to compensate for the loss. 7To substantiate the above fact, following example is taken in respect of a strong company Loan of Rating AAA is taken of Rs 100 Crores 12% interest rate Capital Adequacy Rating Risk % Capital Required Opportunity Ratio (Rs Crores) Interest lost by the Bank (Rs Crores) C. A. R. Unrated 100% 9. 00 1. 08 C. A. R. New 20% 1. 80 0. 22 Total Opportunity Interest lost by the Bank (Rs Crores) 0. 86 Hence, Banks would resort to the above-mentioned measures in order to reduce or curb this loss on opportunity interest. Worse modify by this action taken by Banks would be the weaker companies. They would either be charged a higher rate of interest on loans to compensate for the loss or would alternatively have to approach both(prenominal)(pre nominal)(prenominal) other bank charging a lower rate of interest.The ideal solution to this problem would be that a weaker company should get itself rated and also take go in order to have a better credit rating. Credit Rating is an evaluation of credit worthiness of a person, company or instrument. Thus, it indicates their willingness to pay for the tariff and the net worth. IV. Basel II in India A. Implementation The deadline for implementing the base approach of Basel II norms in India, was originally set for March 31, 2007. Later the RBI panoptic the deadline for Foreign banks in India and Indian banks operating abroad to meet those norms by March 31, 2008, while all other plan commercial banks were to deposit to the guidelines by March 31, 2009. Later the RBI confirmed that all commercial banks were Basel II compliant by March 31, 2009. care in view the likely lead time that may be needed by the banks for creating the requisite technological and the risk management infras tructure, including the required databases, the MIS and the skill up-gradation, etc. , RBI has proposed the implementation of the advanced approaches under Basel II in a phased manner starting from April 1, 2010 B. Impact on Indian Banks Basel II allows national regulators to specify risk weights different from the internationally recommended ones for retail exposures. The RBI had, therefore, announced an significative set of weights for domestic corporate long-run loans and 8 bonds theatre of operations to different ratings by international rating agencies such as Moodys Investor Services which are slightly different from that specified by the Basel Committee (Table 1). C.Impact on various elements of the investment portfolio of banks The bonds and debentures portfolio of the banks consist of investments into higher rated companies, so the corporate assets heedful using the exchangeable approach may be exposed to slightly lower risk weights in comparison with the 100 per cent risk weights assigned under Basel I. The Indian banks have a large short-term portfolio in the form of property in credit, overdraft and working capital demand loans, which were un-rated, and carried a risk weight of 100 per cent under the Basel I regime. They also have short-term investments in commercial papers in their investment portfolio, which also carried a 100 per cent risk weight. The RBIs capital adequacy guidelines has electropositive lower risk weights for short-tem exposures, if these are rated (Table 2).This provides the banks with an opportunity to benefit from their investments in commercial paper (which are typically rated in A1+/A1 category) and give them the potential to exploit the proposed short-term credit risk weights by obtaining short-term ratings for exposures in the form of cash credit, overdraft and working capital loans. The net result is that the implementation of Basel II provided Indian banks with the opportunity to significantly reduce their cre dit risk weights and reduce their required regulatory capital, if they fittingly adjust their portfolio by lending to rated but strong corporate and increase their retail lending. According to some reports, most of the Indian banks who have migrated to Basel II have describe a reduction in their positive Capital Adequacy Ratios (CARs).However, a few banks, those with high exposures to higher rated corporate or to the regulatory retail portfolio, have report increased CARs. However, a recent direct by New Delhi-based industry mansion group Assocham has cogitate that Capital Adequacy Ratio (CAR) of a group of commercial banks, which were part of the take aim improved to 13. 48% in 2008-09 from 12. 35% in 2007-08, due to lower risk weights, implementation of Basel II norms and slower credit growth. 9 D. Bad debts and requirement of superfluous capital In this context, the situation regarding toughened debts and NPAs is very pertinent. The proportion of total NPAs to total adva nces declined from 23. 2 per cent in March 1993 to 7. per cent in March, 2004. The overture in terms of NPAs has been largely the result of provisioning or excerption of capital. This meant that if the banks required more capital, as they would to implement Basel II norms, they would have to find capital outside of their own or the governments resources. ICRA has estimated that, Indian banks would need redundant capital of up to Rs. 12,000 crore to meet the capital charge requirement for operational risk under Basel II. most(prenominal) of this capital would be required by PSBs Rs. 9,000 crore, followed by the new generation one-on-one sector banks Rs. 1,100 crore, and the old generation snobbish sector bank Rs. 750 crore.In practice, to deal with this, a large number of banks have been forced to turn to the capital market to meet their extra regulatory capital requirements. ICICI Bank, for example, has raised around Rs. 3,500 crore, thus improving its Tier I capital signifi cantly. many another(prenominal) of the PSBs, namely, Punjab National Bank, Bank of India, Bank of Baroda and Dena Bank, similarly cloistered sector banks such as UTI Bank have either already tapped the market or have announced plans to raise equity capital in order to win their Tier I capital. E. Government Policy on outside investment The need to go public and raise capital challenged the government policy aimed at curb concentration of share ownership, maintaining public sureness and limiting hostile influence in the banking sector.One contiguous fallout was that PSBs being permitted to dilute the governments stake to 51 per cent, and the bosom to reduce this to 33 per cent increased. Secondly, the government allowed private banks to throw a fit equity by accessing capital from foreign investors. This put pressure on the RBI to rethink its policy on the ownership structure of domestic banks. In the erstwhile(prenominal) the RBI has accent the risks of concentrated foreign ownership of banking assets in India. Subsequent to a notification issued by the Government, which had raised the FDI limit in private sector banks to 74 per cent under the automatic route, a comprehensive set of policy guidelines on ownership of private banks was issued by the RBI.These guidelines stated, among other things, that no angiotensin-converting enzyme entity or group of related entities would be allowed to hold shares or exercise control, directly or indirectly, in any private sector bank in excess of 10 per cent of its paid-up capital. F. Threat of foreign takeover There has been growth pressure to consolidate domestic banks to unsex them capable of veneer international competition. Indian banks are pigmies compared with the global majors. Indias biggest bank, the State Bank of India, which accounts for onefifth of the total banking assets in the country, is roughly one-fifth as large as the worlds biggest bank Citigroup. presumptuousness up this difference , even after consolidation of 10 omestic banks, the threat of foreign takeover trunk if FDI policy with respect to the banking sector is relaxed. Not surprisingly, a number of foreign banks have already evinced an interest in acquiring a stake in Indian banks. Thus, it appears that foreign bank presence and consolidation of banking are inevitable post Basel II. V. destruction A. SWOT outline of Basel II in Indian Banking condition Strenghts Aggression towards growing of the existing standards by banks. Strong regulatory impact by central bank to all the banks for implementation. Presence of intellectual capital to face the change in implementation with good quality. Weaknesses forgetful Technology al-Qaida Ineffective Risk Measures Presence of more number of small banks that would likely to be impacted adversely. Opportunities change magnitude Risk Management Expertise. Need significant connection among business,credit and risk management and reading Technology. Adv ancement of Technologies. Strong Asset Base would help in bigger growth. Threats softness to meet the additional Capital Requirements detriment of Capital to the entire banking system, due to Mergers and acquisitions. spacious Investments in technologies B. Challenges going ahead under Basel II The new norms will roughly invariably increase capital requirement in all banks across the board.Although capital requirement for credit risk may go down due to adoption of more risk sensitive models such advantage will be more than offset by additional capital charge for operational risk and increased capital requirement for market risk. This partially explains the current slip of consolidation in the banking industry. Competition among banks for exceedingly rated corporates needing lower amount of capital may exert pressure on already thinning interest spread. Further, huge implementation cost may also impact profitability for small banks. The biggest challenge is the re-struc turing of the assets of some of the banks as it would be a tedious process, since most of the banks have poor asset quality lead-in to significant proportion of NPA. This also may lead to Mergers Acquisitions, which itself would be loss of capital to entire system.The new norms seem to promote the large banks that have better risk management and measurement expertise, who also have better capital adequacy ratios and geographically diversified portfolios. The smaller banks are also likely to be hurt by the rise in weightage 11 of inter-bank loans that will effectively price them out of the market. Thus, banks will have to re-structure and adopt if they are to withstand in the new environment. Since improved risk management and measurement is needed, it aims to give impetus to the use of internal rating system by the international banks. More and more banks may have to use internal model demonstrable in kinfolk and their impact is uncertain. intimately of these models requi re minimum historical bank data that is a tedious and high cost process, as most Indian banks do not have such a database.The technology infrastructure in terms of cybernation is still in a emerging stage in most Indian banks. Computerization of branches, particularly for those banks, which have their network spread out in remote areas, will be a restrain task. Penetration of culture technology in banking has been successful in the urban areas, unlike in the sylvan areas where it is insignificant. An integrated risk management concept, which is the need of the hour to align market, credit and operational risk, will be difficult due to significant disconnect between business, risk managers and IT across the organizations in their existing set-up. Implementation of the Basel II will require huge investments in technology.According to estimates, Indian banks, curiously those with a respectable branch network, will need to authorize well over $ 50-70 Million on this. Computatio n of probability of default, loss given default, migration mapping and supervisory validation require creation of historical database, which is a time consuming process and may require initial maintain from the supervisor. With the implementation of the new framework, internal auditors may become increasingly involved in various processes, including validation and of the accuracy of the data inputs, review of activities performed by credit functions and assessment of a banks capital assessment process. Pillar 3 purports to utilise market match through stricter disclosure requirement.While admitting that such disclosure may be utilizable for supervisory governing and rating agencies, the expertise and ability of the general public to embrace and interpret disclosed information is open to question. Moreover, too much disclosure may cause information overload and may even revile financial position of bank. Basel II proposals accent the interaction between sound risk management practices and corporate good governance. The banks board of directors has the responsibility for setting the basic allowance account levels for various types of risk. It should also ensure that management establishes a framework for assessing the risks, develop a system to relate risk to the banks capital levels and establish a method for monitoring compliance with internal policies.The risk exercising weight scheme under Standardised Approach also creates some incentive for some of the bank clients to abide unrated since such entities arrive a lower risk weight of 100 per cent vis-a-vis cl per cent risk weight for a lowest rated client. This might specially be the case if the unrated client expects a poor rating. The banks will need to be heads-up in this regard. We can conclude by saying that the Basel II framework provides significant incentives to banks to sharpen their risk management expertise to enable more efficient risk-return tradeoffs, it also presents a pr iceless opportunity to gear up their internal processes to the 12 international best standards.This would require substantial potentiality building and commitment of resources through close involvement of the banks peak Management in guiding this heavy(a) undertaking. Notwithstanding severe competition, the expansionary phase of the economy is expected to provide ample opportunities for the growth of the banking industry. The growth trajectory, affixation to global best practices and risk management norms are likely to catapult the Indian Banks onto the global map, making them a force to reckon with. VI. References 1. The Evolution to Basel II by Donald Inscoe, Deputy Director, part of Insurance and Research, US Federal hold fast Insurance Corporation. 2.Basel II Challenges Ahead of the Indian Banking Industry by Jagannath Mishra and Pankaj Kumar Kalawatia. 3. Basel II Norms and Credit Ratings by CA Sangeet Kumar Gupta. 4. The pipeline Line Magazine. 5. The lease Accountant daybook of the Institute of hire Accountants of India. 6. www. bis. org 7. www. rbi. org. in 8. www. wikipedia. org 9. www. google. com VII. The Technical Paper Presentation Team appoint of Member electronic mail IDs rahulscsharmaicai. org tulsyan. abhishekyahoo. co. in sikha. kedia0311gmail. com ca. gouravmodigmail. com Praveen_didyahoo. com 1. Rahul Sharma 2. Abhishek Tulsyan 3. Sikha Kedia 4. Gourav Modi 5. Praveen Didwania 13