RESERVE BANK OF INDIA

RBI on Internet: www.rbi.org.in

Expression of Interest

The Department of Supervision, Reserve Bank of India, Central Office, Mumbai
invites Expression of Interest (EOI) from eligible firms of repute for engagement as
consultant for:
1. Review of supervisory processes under Risk Based Supervision Model and
benchmarking global best practices in supervisory processes.
2. Review of supervisory rating models under CAMELS approach for Urban Co-
operative Banks and NBFCs.

Last date for receipt of EOI is May 31, 2021 by 12 PM. For details, please visit our

website (www.rbi.org.in). Further, Addendum/ Corrigendum, if any, shall be

uploaded only on our website. The decision of the Bank, in this regard, shall be

final and binding on all.

Mumbai Chief General Manager-in-Charge
Department of Supervision, Central Office

"Don't get cheated by Emails/SMSs/calls promising you money"
April 30, 2021

Invitation for Expression of Interest (EOI)

1. Introduction
Reserve Bank of India (RBI) is entrusted, inter-alia, with the responsibility of supervising
the banks1, Urban Cooperative Bank (UCBs), Non-Banking Financial Companies
(NBFCs) and All India Financial Institutions in India under various provisions of the
Banking Regulation Act, 1949 (hereinafter referred to as BR Act), Reserve Bank of India
Act, 1934, Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970,
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 and State
Bank of India Act, 1955. The RBI undertakes supervision of these Supervised Entities
(SEs) with the objective of assessing their financial soundness, solvency, asset quality,
governance framework, liquidity, and operational viability, so as to protect depositors’
interests and financial stability. The substantive objective of RBI’s statutory inspection is
to verify whether the conditions subject to which the SE was authorized to undertake
banking business and the subsequent instructions issued by the RBI continue to be
fulfilled by the SE. The RBI undertakes continuous supervision of SEs with the help of
on-site inspections and off-site monitoring.

2. Present Supervisory Process

For Banks – Reserve Bank conducts supervision of the banks through offsite
monitoring of the banks and an annual inspection of the banks, where applicable. The
Inspection and Supervisory Evaluation (ISE) of banks is conducted in terms of the
provisions of Section 35 read with Section 51 of the BR Act. A supervisory model based
on Risk Based Supervision (RBS), combining both qualitative and quantitative
elements, is used to assess the performance of individual banks. RBS may be defined

1 The term bank includes a banking company as defined in Section 5(c) of Banking Regulation Act, 1949, State Bank
of India as defined in Section 2(g) of State Bank of India Act, 1955; subsidiary bank as defined in Section 2(k) of
State Bank of India (Subsidiary Banks) Act, 1959 and corresponding new bank as defined in Sections 2(d) and 2(b)
of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1980 respectively.

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as ‘an ongoing process wherein risks of a bank are assessed and appropriate
supervisory plans designed and implemented by the supervisor.’ RBS can thus be seen
as a structured process, which identifies material and critical risks that a bank may
potentially face, and through a focused supervisory review process, assesses the
bank’s ability to manage the potential risks along with its financial vulnerability to
adverse outcomes. The emphasis is also on forward looking elements for early risk
identification.

For Urban Co-operative Banks (UCBs) – Reserve Bank conducts supervision of the
UCBs through a mix offsite monitoring of the UCBs and on-site inspection, where
applicable. The Annual Financial Inspection of UCBs (as necessary), conducted in
terms of the provisions of Section 35 of the BR Act, 1949 (AACS), is largely based on
CAMELS model (Capital Adequacy, Asset Quality, Management, Earnings, Liquidity,
and Systems & Control). The off-site monitoring of the UCBs is carried out through
Offsite Monitoring and Surveillance System (OSMOS) and various other regulatory
returns prescribed under Section 27 of the BR Act (AACS).

For NBFCs – Reserve Bank conducts supervision of the NBFCs using a mix of offsite
monitoring and on-site inspection, where applicable. Annual Financial Inspection of
NBFCs (as necessary), carried out under Section 45N of the RBI Act, 1934, is largely
based on CAMELS model (Capital Adequacy, Asset Quality, Management, Earnings,
Liquidity, and Systems & Control). RBI also conducts off-site monitoring of the NBFCs
through COSMOS and various other regulatory returns.

3. Engagement of a Technical Expert/Consultant
For Banks – The Indian banking landscape and the financial sector have witnessed
considerable changes including technological innovations in the period after introduction
of RBS in India. The thrust of the Reserve Bank’s supervisory policies has been on
identifying root causes of weaknesses in Supervised Entities (viz., Governance
framework including Board and Senior Management, business model and strategies,
risk and compliance culture, internal oversight and assurance functions, among

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others)2 and taking suitable measures towards their mitigation. The RBI has adopted a
Supervisory framework which incorporates enhanced Risk Based Supervision elements
along with forward looking elements for risk identification. It is now intended to review
the supervisory processes and mechanism in order to make the extant RBS model
more robust and capable of addressing emerging challenges, while removing
inconsistencies, if any. In particular, the RBS model should reflect inherent risks of SEs
appropriately and proactively. To carry forward the above objectives, RBI intends to
engage the services of a technical expert/ consultant (hereinafter consultant).

For UCBs and NBFCs – The supervisory functions pertaining to Scheduled
Commercial Banks (SCBs), UCBs and NBFCs are now integrated, with the objective of
harmonising the supervisory approach based on the activities / size of the SEs. It is
intended to review the existing supervisory rating models under CAMELS approach for
improved risk capture in forward looking manner and for harmonising the supervisory
approach across all SEs.

4. Objectives and Scope of Work for the Consultant

For Banks
(a) Review of the updates in the international practices/processes/model on Risk

Based Supervision across major jurisdictions including coverage of emerging
risks/ issues in banking sector and suggest/ implement applicable
modifications. Also, benchmarking of inherent, control and Governance
(including oversight & assurance functions and business strategy) risk
parameters under the RBS model vis-à-vis the international best practices
(advanced economies).
(b) Re-calibration of objective assessment parameters used for assessing
inherent risks in banks – This will include analysis of Risk Indicators across all
risk categories, interplay/ interconnectedness between them, scoring ranges,

2 Hereinafter the terms Governance should be used to refer to all the elements mentioned viz. Governance
framework including Board and Senior Management, business model and strategies, risk and compliance culture,
internal oversight and assurance functions

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trend analysis to identify the areas where risk could be higher due to
inadequate attention given by the bank to corrective actions, as required.
(c) Examination of parameters under Governance and Oversight and assurance
functions – This will include examining existing parameters under
Governance and Oversight and suggesting objective parameters for the same
as well as developing suitable questions for assessment and related scoring.
(d) Examination of assessment questionnaire for control gaps corresponding to
revised/re-calibrated Risk Indicators.
(e) Review/implementation of recommendations emanating from earlier review of
RBS model (SPARC Model) by external and internal groups.
(f) Identification of the risk indicators under RBS model that might be impacted
due to Ind AS adoption and indicate suitable replacements under Ind AS.

For UCBs and NBFCs – Review the existing supervisory rating models under
CAMELS approach for improved risk capture in forward looking manner and for
harmonising the supervisory approach across all Supervised Entities

The consultant would be required to work in close co-ordination with officers of
RBI’s Department of Supervision in Mumbai. Further, the consultants’
report/recommendations should be based on research (including cross country
experiences) and supported by relevant data.

5. Eligibility Criteria
 The applicant should be a professional consultancy firm of international repute.
 The applicant firm should possess a minimum of three years of relevant
experience of engagement with bank supervisors of advanced economies (with
well established, large and diverse banks and developed financial markets).
 The applicant firm should have prior experience in handling Risk Based
Supervision Project for other Central Bank(s)/ Supervisory Authority(ies) of
advanced economies.
 The applicant should have a proven track record of handling projects involving

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Risk identification, Risk measurement, and Risk mitigation in banks.
 The applicant firm should have adequately qualified/ experienced resources to

handle this type of project.
 The applicant firm shall undertake to complete the entire project within given time

frame of 12 weeks, failing which RBI reserves the right to terminate the services
of the firm by giving a notice of 10 days.
 The applicant firm should be in a position to guarantee the completion of the
project in a time bound manner as per timelines to be stipulated by RBI.
 The applicant firm should not have conflicts with other assignments / jobs or
their own corporate interest and should act without consideration for future
work.
 In case the applicant firm has been debarred / black listed or any penalty has
been imposed by any jurisdiction, the details regarding the same should be
provided as per the format given in Annex.

6. Short-listing of Consultants for the purpose of Request for Proposal (RFP)
A Technical Advisory Group (TAG) consisting of senior officers of the RBI would
examine the documents submitted by the applicants in connection with Expression of
Interest (EOI). Based on the relative experience, expertise & other parameters
mentioned in the eligibility criteria detailed in the EOI Document, the TAG will prepare a
short list of applicants. Preference will be given to applicants with experience of
handling RBS projects in advanced economies. The TAG may also invite the applicants
to make a presentation to enable them to make their decision. The TAG at RBI would
prepare the Request for Proposal (RFP) and invite technical and financial bids from the
short-listed applicants as per RFP document. RBI’s decision in this regard would be
final. It may also be noted that the SPARC model is proprietary and confidential, and it
cannot be shared in any form.

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7. Documents to be submitted by the Applicants for EOI

The following documents are to be submitted in response to the invite for EOI. (Kindly
use the formats wherever provided).

i. EOI as per Annex ‘A’
ii. A brief proposal highlighting the methodology and process that would be adopted

for the work mentioned (The TAG may call for a presentation from the applicants
for elaborating on the same). This should also specify the approach of the
applicant firm to ensure completion of the project within timelines stipulated.
iii. Information on Financials - Certified copies of audited revenue accounts showing
income from consultancy as well as balance sheets for the last three financial
years as per Annex ‘B’.
iv. Information on the firm’s core business, years in business, technical and
managerial capabilities together with documents/information evidencing
expertise/qualification in the field of assignment - documentary evidence of
successful completion of similar consultancy projects in the financial sector, in
India/overseas, may be submitted. The document should bring out the nature of
the project, deliverables, cost involved, the client for whom the assignment was
undertaken, duration of the project etc., as per Annex ‘C’.
v. Key Personnel – Details of key personnel proposed to be deployed for the project
and their Curriculum Vitae (CV) clearly indicating their qualification and experience
in this area may be furnished as per Annex ‘D-1 and D-2’. The key personnel
should have been involved in similar work (in jurisdictions with advanced and well
developed banking sector) in the past and should possess the requisite domain
expertise.
vi. Letter of authorization, authorizing the person signing on behalf of the applicant.
vii. Commitment to sign Non Disclosure Agreement, wherever required.
viii. List of offices of the firm.

8. Instructions to bidders for formulation & submission of EOI

a) Interested firms may submit sealed envelopes titled “Expression of Interest-
Consultant for Review of Supervisory Models” to:

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The Chief General Manager-in-Charge,
TAG – SPARC Group,

Department of Supervision,
Central Office,

Reserve Bank of India
3rd Floor, World Trade Centre, Tower-1

Cuffe Parade, Colaba,
Mumbai – 400 005.

b) The last date for submission of the EOI is May 31, 2021 (12.00 PM). The firms
may submit their applications (by post or in person) so as to reach RBI by the
stipulated time and date. Proposals received after the due date and time will be
summarily rejected.

c) All pages of the EOI document should be signed by an authorized signatory with
date and seal of the firm.

d) If any information sought in this document is missing or vague or not clearly
specified by the applicant, it will be assumed that the firm is not in a position to
supply the information.

e) The consultant shall bear all costs associated with the preparation and submission
of their proposals.

f) Queries related to this advertisement, if any, may be addressed to The Chief
General Manager-in-Charge, TAG – SPARC Group, Department of Supervision,
Central Office, Reserve Bank of India, 3rd Floor, World Trade Centre, Tower-1, Cuffe
Parade, Colaba, Mumbai – 400 005. (Fax No. 022- 2218 0157). Queries will be
accepted through fax, post, hand delivery or e-mail– cgmicdosco@rbi.org.in with
copy to sparcdos@rbi.org.in. The queries would be responded through e-mail. No
queries will be accepted on telephone. All queries would be accepted only up to
24 hours before the closure date.

g) The fees for the final assignment will be payable in Indian Rupees.
h) All matters relating to this activity shall be governed by the laws of Union of India.

Courts at Mumbai shall have the jurisdiction to decide or adjudicate on any matter,
which may arise.

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i) Please note that this document is only a request for information and not a Request
for Proposal (RFP). Without limiting its rights in law or otherwise, RBI reserves the
right, in its absolute discretion, at all times, in relation to accepting or rejecting any
EOI response; varying or discontinuing the EOI and related processes. RBI shall not
be bound to give reasons for any decision made under this clause and its decision
will be final and binding on all respondents to this EOI.

j) RBI requires that the selected applicant provide professional, objective, and
impartial advice and at all times hold RBI’s interest paramount, strictly avoiding
conflicts with other assignments / jobs or their own corporate interest and act without
consideration for future work. The consultant shall be under an obligation to
disclose any situation of actual or potential conflict that impacts their capacity to
serve the best interest of RBI, or that may reasonably be perceived as having this
effect.

k) Consultant shall be required to maintain strict confidentiality of information / data
shared for the purpose and the same shall not be used elsewhere. Also, the
consultant firm shall be required to give a certificate that entire information / data
received from RBI for the purpose of this assignment has been deleted/ destroyed
after completion of the project.

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Annex ‘A’

LETTER OF TRANSMITTAL

FROM:

To
The Chief General Manager-in-Charge
Department of Supervision,
Central Office,
TAG – SPARC Group,
Reserve Bank of India
3rd Floor, World Trade Centre, Tower-1
Cuffe Parade, Colaba,
Mumbai – 400 005

SUBJECT: Expression of Interest - Consultant for Review of Supervisory Models

Dear Sirs,

Having examined the details given in your “Invitation for Expression of Interest”
document dated April 30, 2021 for the above project, I/we hereby submit our proposal
with all the desired information and documents:

1. I/We hereby certify that all the statements made and information supplied in the
enclosed forms ‘A’ to ‘D’ and accompanying statements are correct and accept that
any misrepresentation contained therein may lead to our disqualification.

2. I/We have furnished all information and details necessary for the Expression of
Interest and have no further pertinent information to supply.

3. I/We also authorise RBI or their authorised representatives to approach individuals,
employers and firms to verify our competence and general reputation.

4. I/We submit relevant documents in support of our suitability, technical know-how
and capability for having successfully completed/undertaking similar assignment.

5. I/We enclose a brief write up highlighting the methodology and process that we
propose to adopt for the work mentioned in the EOI document.

6. We understand that this EOI is binding on us and RBI is not bound to accept any
proposal that it receives. We are aware that RBI reserves right to reject any or all
the EOI without assigning any reasons what so ever.

Yours sincerely,

Signature of the Authorised Representative

Enclosures:
Seal of applicant:

Date of submission:

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REVENUE AND PROFIT FIGURES OF THE FIRM Annex ‘B’
(Please provide the figures in Indian Rupees)
Net Worth
Table 1: Revenue from consultancy activities in India

Sl. No. Financial Year Total Revenues(Rs.) Revenue from Profit After
Consultancy Services Taxes (Rs.)
1 2017-18
2 2018-19 in India (Rs.)
3 2019-20
4 2020-21

Table 2: Revenue from Global consultancy activities

Sl. No. Financial Year Total Revenue from Profit After Net Worth
Revenues(Rs.) Consultancy Taxes (Rs.)
1 2017-18 Services (Rs.)
2 2018-19
3 2019-20
4 2020-21

a) Please provide the exchange rate (with date), if used for the conversion from other
currency.
b) Please attach certified copies of audited revenue accounts showing income from
consultancy & balance sheets for the last 3 financial years.
c) Documents should reflect the financial situation of the applicant or partner to a JV and
not sister or parent company.
d) Historic financial statements submitted must be audited by a chartered accountant.
e) Historic financial statements must correspond to the accounting periods already
completed and audited.

Date:

Signature of the Consultant / Authorised representative

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Annex ‘C’

CONSULTANT’S ORGANISATION AND EXPERIENCE

1. Consultant’s Organization

[Provide a brief description of the background and organization of your firm / entity. The
brief description should include ownership details, date and place of incorporation of the
firm, objectives of the firm, etc. Information on the firm’s core business, years in
business, technical and managerial capabilities should also be included here]

2. Consultant’s Experience

DETAILS OF CURRENT / COMPLETED PROJECTS DURING THE LAST THREE
YEARS (Please list assignments that are similar to the RBI assignment –
advanced economies only)

Sl. Name and Nature of Key deliverables Duration Exact Year of Approximate
Value/cost
No. address of the the of the project of the Responsibil completion of

client including project Project ity project

email ID

Note: The applicants are required to provide the Proof of award of work & completion
certificate.

Date:

Signature of the Consultant / Authorized representative

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Annex ‘D-1’

KEY PERSONNEL PROPOSED TO BE DEPLOYED FOR RBI ASSIGNMENT

Sl. Name of Designation Technical Total Years of Details in
Qualification relevant Annex
No. proposed
experience
personnel

Note: A summary of the qualification, CV and work experience of each key staff to be
attached.
Date:

Signature of the Consultant or Authorised representative

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CVs OF KEY PERSONNEL Annex ‘D-2’
Date of obtainment
Name of the Personnel and University / Degree
Nationality College obtained
Years with the firm
Qualifications (Technical
General)

Membership in professional bodies Position Held Years of Employment
Experience and Training ( Relevant
in the context of assignment )
Employment Record
Name of the Firm

Work Undertaken that Best Illustrates Capability to Handle the Tasks Assigned
Name of Assignment / job or
Project:
Year:
Location:
Employer:
Main Project Features:
Positions held:
Activities performed:
Duration of Engagement:

Date:

Signature of the Consultant / Authorised representative

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Annex E

Details of penalty(ies) levied/ debarment in other jurisdictions – All instances

Sl. Name and Quantum Period of Reasons for Whether Corrective Remarks
debarment penalty/ accounta Action initiated,
No. address of the of the
debarment bility if any
Supervisor/ penalty fixed
internally
authority that – names,
if any
levied penalty or

debarred the firm

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