Annexure - 1

Check list on Basel II Processing

Claims on Domestic Sovereigns
Fund based claims on the Central government / State Government will attract
a zero risk weight. Identified by Constitution Code 15/12
Non fund based claims on the central government / State Government will
attract a zero risk weight. Identified by Constitution Code 15/12
Central Government guaranteed claims will attract a zero risk weight.
Identified by Special Category Code 22 or 23
State Government guaranteed claims will attract a 20% risk weight.
Identified by Special Category Code 20 or 21
Exposure to RBI/DICGC/CGTSI will attract a zero risk weight. Identified by
Constitution Code 15 along with Activity Code 9015/9016/9018
Exposure to ECGC will attract a 20 % risk weight. Identified by Constitution
Code 15 along with Activity Code 9017
O/s covered by DICGC /CGTSI will attract a zero risk weight. - Identified by
Amount entered as DICGC Received / Cover available.
O/s covered by ECGC will attract a 20 % risk weight. - Identified by Amount
entered as ECGC Received / Cover available for the accounts with Sub
Facilities related to EXP.
Claims on Foreign Sovereigns
Identified by Constitution code 59 and as per the Rating of County and /or
International Rating of Customer RW is assigned. Higher of RW assigned to
Country and/or International Rating of Customer is considered.
County and /or International rating of Customer is entered through Basel
II / Foreign Exposure Menu Option.
Claims denominated in domestic currency of the foreign sovereign met out
of the resources in the same currency raised in the jurisdiction of that
sovereign
will, however, attract a risk weight of zero percent. Identified though A/c
wise information entered through Basel II / Foreign Exposure Menu
Option.

Claims on Public sector entities (PSEs)

Domestic public sector entities will be Risk weighted as per Corporate.
Identified by Constitution Code 11 / 13 / 52
Foreign public sector entities will be identified by Constitution code 91 and
as per the Rating of County and /or International Rating of Customer, RW is
assigned. Higher of RW assigned to Country and/or International Rating of
Customer is considered.
County and /or International rating of Customer is entered through Basel
II / Foreign Exposure Menu Option.
Claims on banks
The claims on Banks incorporated in India and Foreign Bank branches in
India, will be risk weighted as per their status as Scheduled Banks/ Non
scheduled Banks and their CRAR. Identified by Activity Code 9001 / 9002 /
9003 / 9004 / 9005 / 9006. Banks status as Scheduled Banks/ Non
scheduled Banks and their CRAR will be as per the Bank Master and Name of
Customer should be as per Bank master. Therefore, the name of the
Banks must be picked up from Bank Master only.
All claims on scheduled banks, which comply with the minimum CRAR
prescribed by the Reserve Bank of India, will be assigned a risk weight,
including RRBs, at 20%.
All claims on Non scheduled banks, which comply with the minimum CRAR
prescribed by the Reserve Bank of India, will be assigned a risk weight, at
100%.
All claims on scheduled and non scheduled banks will be assigned a risk
weight as applicable to the counterparty banks capital adequacy position as
on the date of last full audit as indicated in Table.
CRAR%
Over 9%
6 to <9
3 to <6
0 to < 3
Negative

Scheduled
Banks
20%
50%
100%
150%
625%

Other Banks
100%
150%
250%
350%
625%

Foreign Banks will be identified by Constitution code 60 and as per the

Rating of County and /or International Rating of Customer, RW is assigned.
Higher of RW assigned to Country and/or International Rating of Customer is
considered.

County and /or International rating of Customer is entered through Basel

II / Foreign Exposure Menu Option.
The claims on a foreign bank which are denominated in 'domestic' foreign
currency met out of the resources in the same currency raised in that
jurisdiction will be risk weighted at 20% provided the bank complies with the
minimum CRAR prescribed by the concerned bank regulator, available as
mstcountry.RegulatorCRAR .
Corporate
Domestic Corporate Identification
Total average annual turnover is more than or equal to Rs.50 Crore.
The maximum aggregated retail exposure of the customer should be
more than Rs. 5 crore.
For the purpose of ascertaining compliance with the absolute
threshold, exposure would mean sanctioned limit or the actual
outstanding, which ever is higher, for all fund based and non-fund
based facilities, including all forms of off balance sheet exposures. In
the case of term loans and EMI based facilities, where there is no
scope for redrawing any portion of the sanctioned amounts, exposure
shall mean the actual outstanding.
If aggregate exposure of the customer exceed 0.2% of the overall
regulatory retail portfolio.
Aggregated exposure will be arrived by total O/s of all forms of debt
exposures i.e Main Limit exposure, Parked Limits exposure, Group
Accounts exposure, Associates exposure
Risk Weight
RW will be as per the Long Term / Short Term Rating of the Customer.
For Short Term Accounts, A/c specific Short Term Rating to be
considered.
For Unrated Short Term A/c, the short term rating of other Short Term
A/c will be considered. In case of multiple Short Term rated A/cs , the
rating with Max RW will be considered. While assigning the RW for
such Unrated Short Term A/cs , it will be one level higher.
For Unrated Short Term A/c, if no short term rating of other Short
Term A/c is available then Long Term Rating, if available, can be used.

In respect of unrated claims, if there is any record sanctioned or last

review date is within financial year 2008-09, and aggregate exposure
on a single counterparty for the bank as a whole is in excess of Rs.50
Crore , RW will be 150%. Other wise it will be 100%.
In respect of unrated claims, if there is any record sanctioned or last
review date is after April 1, 2009, and exposure as above is in excess
of Rs.10 Crore , RW will be 150%. Other wise it will be 100%.
In respect of Unrated standard, re-structured / re-scheduled A/cs,
identified through Special Category Code 71, 72, 91, 92, 76, 77, 74,
96, 12 months from the earliest first Installment date or Due date of
Bill after restructuring date , RW of 125% will be assigned.
Non Resident Corporate Identification
All eligible Corporate along with Special Category Code 31 will be
considered as Non-resident Corporate, and the calculation of RW will
be as per Foreign Sovereigns i.e as per the Rating of Country and
accordingly RW.
As per the Rating of County and /or International Rating of Customer,
RW will be assigned. Higher of RW assigned to Country and/or
International Rating of Customer will be considered.
County and /or International rating of Customer is entered through
Basel II / Foreign Exposure Menu Option.
In respect of unrated claims of Non-resident Corporate, if there is any
record sanctioned or last review date is within financial year 2008-09,
and aggregate exposure on a single counterparty for the bank as a
whole is in excess of Rs.50 Crore , RW will be 150%. Other wise it will
be 100%.
In respect of unrated claims of Non-resident Corporate, if there is any
record sanctioned or last review date is after April 1, 2009, and
exposure as above is in excess of Rs.10 Crore , RW will be 150%.
Other wise it will be 100%.
Claims secured by residential property
Identified by Activity Code 3401 3499 , Constitution Code 41,42,43,44 and
Security Code 21
Shall be risk weighted as indicated below, provided the loan to value ratio
(LTV) is not more than 75%. LTV ratio would be computed as a percentage
with total outstanding in the account (viz. principal+accrued interest+other
charges pertaining to the loan without any netting) in the numerator and the

realizable value of the residential property mortgaged to the bank in the

denominator.
Amount of loan

Risk weight

Up to Rs. 20 lakh
Rs. 20 lakh and
above

50%
75%

Lending for acquiring residential property which meets the above criteria but
have LTV ratio of more than 75% will attract a risk weight of 100%.
Exclusion:
Loans / exposures to intermediaries for on-lending i.e Indirect Housing will
not be eligible for inclusion under claims secured by residential property.
Claims secured by commercial real estate
Accounts with exclusive Security codes 19, 110, 111, 112, 113, 114, 115,
116, 117, 118 will be Claims secured by commercial real estate and will
attract a risk weight of 150 per cent.
Specified Categories
Consumer credit, including personal loans (Activity Code 9301, 9302, 9303,
9304, 9351, 9361, 9399) and credit card receivables (Activity Code 9535)
will attract a higher risk weight of 125%.
However, loans up to Rs. 1 lakh fully covered by exclusive security as gold
will attract a risk weight of 50%.
Capital market exposures( Activity Code 9070
, 9071 , 9521 , 9522 ,
9523, 9513 , 9514 , 9515 , 9516 , 9517 , 9518 , 9519 , 9520 , 9524 )
and claims on Non-deposit taking systemically important non-banking
financial companies ( identified by Special Category Code 33), will attract a
higher risk weight of 125%
Venture capital funds will attract a higher risk weight of 150%
Other Assets
Loans and advances to banks own staff which are fully covered by
superannuation benefits and/or mortgage of flat/ house will attract a 20%
risk weight.
For staff customer, if Total O/s is fully covered by superannuation benefits
and Non CRM Primary RV value of all housing loan A/cs it will attract a 20%
risk weight.

Claims included in the regulatory retail portfolios

The following claims, both fund based and non fund based, shall be excluded
from the regulatory retail portfolio:
a) All those categories like Sovereigns, MDBs which are categorized on the
basis of Constitution Code
b) Claims which otherwise fall under Claims against Residential properties
(c) Loans and advances to banks own staff which are fully covered by
Superannuation benefits and / or mortgage of flat/ house;
(d) Consumer credit, including personal loans and credit card receivables
(e) Capital market exposures;
(f) Venture capital funds as above
Undrawn Balance of Funded exposure considered as Off Balance sheet
For BP/BD, CC & Non Funded data the difference between Sanction Limit
(Draw Limit for CC) and O/s will be considered as undrawn balance and
attract a CCF of 20%.
For TL/DL, the stage wise completion will be verified vis a vis current
Principal Amount. As per the current stage reached, If it is scheduled to be
completed within one year, the CCF will be 20% and if it is more than one
year then the applicable CCF will be 50%. CCF will be applied on Undrawn
Balance.
CRM
Kisan Vikas Patra and National Savings Certificates with lock-in period will not
be considered as CRM.

Standard supervisory haircut will be Zero for National Savings Certificates,

Kisan Vikas Patras, surrender value of insurance policies, and banks own
deposits.
Haircuts (Hc and He)
Haircuts on exposures will be applied to all accounts where CRM is used and
will be determined by the maturity of the exposure, external rating assigned
to the exposure and the counterparty category.
There will be no He for Domestic Sovereign.
He(Haircut on exposure)for Banks will be determined by Maturity of
Loan.

For calculating He, Individuals will only be considered as

Accounts falling under 125% RW category under specified
category.

He will be 0 against CRMs attracting Zero Hair Cut e.g National

Savings Certificates, Kisan Vikas Patras, surrender value of insurance

policies, and banks own deposits.

He (Haircut on exposure) will be calculated to the extent of CRM
only.
Hc and He will be 0 whereevver the CRM securities are
available for on Balance Sheet netting (Bank;s own deposits,
Cash Margin)
Other Important Points
For Bill Drwan Under LC of Other Bank, Issuing Bank Name will be captured
and the RWA will be calculated as per the type of Bank and CRAR of the
Bank.