Consulting & Advisory

We have been enabling financial institutions globally in implementing best practices in enterprise risk management and governance (encompassing credit risk, operational risk, and risk-based internal audit), designing and validating risk models for credit risk and operational risk in full compliance with Basel II Accord, and providing solutions for credit risk.

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ICRA Analytics has a bouquet of advanced risk solutions in credit risk, operational risk and risk-based pricing

We have conducted training programmes for capacity building and change in management for multiple institutions (financial and non-financial including for central banks, banks, and financial and educational institutions) in the areas of risk management, credit processes, derivatives, securitisation, project finance, and financial analysis. We have worked with a wide range of public sector, private sector and international banks, gathering extensive experience in providing risk solutions that meet contemporary market and regulatory requirements.

Model Validation

Under Basel II, banks are permitted to use the internal ratings-based (IRB) approach to determine the risk weights relevant to calculating capital charges according to their own credit scoring/rating models. Consequently, they are obliged to validate their internal processes for differentiating the risk as well as for quantifying that risk. The primary purpose of validation is to examine whether the internally constructed scoring model can fully explain the credit status of the borrowers.

Risk Policy Review & Gap Analysis

We have extensive experience in reviewing existing risk management frameworks (and related policies) and preparing a comprehensive integrated risk management framework based on best industry practices and regulatory requirements. We have worked with various banks and NBFCs and assisted in the formulation of comprehensive risk management policies, designing and development of integrated enterprise-wide risk management (IEWRM) policies and standard operating procedures (SOPs); development of integrated risk management frameworks including formulating risk management policies for credit, market, operational, compliance and other risks, and designing, monitoring and reporting of the framework for risk-rating models and processes.

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ECL Computation

Our ECL team has been working with India’s leading NBFCs as a consultant/service provider for quarterly ECL computation and reporting. Loan portfolios are spread across retail segments like housing loans, loan against property (LAP), and vehicle loans as well as corporate segments like infrastructure loans, lease rental discounting (LRD), etc.

Model Development Expertise in Credit Risk Management

Empowering Financial Institutions with Robust Internal Risk Rating Models

At ICRA Analytics, we specialize in the development of advanced, Basel II-compliant internal credit risk rating models tailored to the evolving needs of financial institutions. With over two decades of experience and a proven track record, our solutions are trusted by leading banks, NBFCs, and financial institutions globally. Our domain expertise spans a wide array of emerging and traditional sectors, including Scrip Categorization Tool (for Lending against Shares), Infrastructure Investment Trusts (InvITs) & Real Estate Investment Trusts (REITs), Electric Vehicles (EVs) and Other Emerging Sectors.

ICAAP Service

The Internal Capital Adequacy Assessment Process (ICAAP) is a critical component of the Supervisory Review and Evaluation Process (SREP), as outlined by the Reserve Bank of India (RBI) guidelines. It requires financial institutions to establish an internal process for evaluating capital adequacy relative to their risk profile. These institutions must have a well-structured risk governance and escalation process, based on a comprehensive and well-thought-out risk strategy that translates into effective risk limits and appetite.

Given the evolving regulatory landscape—including updates to Basel III capital regulations and stress testing guidelines—the institution recognizes the need to develop a formal ICAAP document and stress testing framework. The objective is to ensure alignment with regulatory expectations and industry best practices. The ICAAP document will provide a strategic roadmap for capital adequacy planning, ensuring compliance with regulatory expectations while supporting the client’s financial sustainability and risk management goals.

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FAQs

Risk advisory services help financial institutions design and strengthen risk frameworks, policies, models, controls and governance processes. They may cover credit risk, enterprise risk, operational risk, regulatory implementation, model validation, stress testing and portfolio analytics depending on the institution’s business and supervisory requirements.

Risk analytics consulting helps banks and NBFCs convert portfolio data into actionable risk insights. It can support borrower segmentation, portfolio diagnostics, early warning indicators, stress testing, risk-based pricing and capital planning, enabling management teams to take better lending and risk decisions.

Basel II and Basel III compliance consulting typically covers capital adequacy assessment, credit risk framework design, RWA computation, ICAAP, stress testing, model validation, governance documentation and regulatory gap assessment. The scope should be aligned to the applicable regulatory category and the institution’s internal risk architecture.

Independent model validation is important because it provides objective assurance on whether a model is conceptually sound, statistically reliable, properly implemented and fit for use. It helps identify weaknesses in data, assumptions, calibration, discriminatory power, stability and governance before model outputs influence business or regulatory decisions.

Banking risk consultants help institutions with credit risk frameworks, policies, rating models, risk analytics, stress testing, capital adequacy, governance, regulatory implementation and technology enablement. Their role is to convert risk requirements into practical processes, controls and decision-useful outputs.

NBFCs benefit from risk management consulting through stronger underwriting practices, sharper portfolio monitoring, better governance, improved model discipline and more structured regulatory readiness. Consulting support can also help NBFCs design scalable risk frameworks as portfolios expand across products, geographies and borrower segments.

Regulatory risk consulting helps financial institutions interpret supervisory requirements and convert them into implementable policies, controls, workflows and reports. It supports gap assessment, compliance planning, governance documentation, regulatory reporting and evidence creation for internal audit, board committees and supervisory review.

Risk governance consulting strengthens frameworks by clarifying roles, decision rights, escalation rules, reporting cadence and accountability across the three lines of defence. It helps ensure that risk appetite, policies, models, controls and management reporting operate consistently across the organisation.