2 31 Section 3 Point: 7.1

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1 1 12 Section 1 Point: 7.11 The Bidder should confirm in writing its obligation to supply upgraded model of the product in case of technological obsolescence / non availability of contracted product/model. The supply of upgraded product, subject to the Bank s approval, will be at the same contracted price as the obsolete model. Is Bank expecting a declaration form in the technical bid? Yes, Declaration required from Bidder 2 31 Section 3 Point: 7.1 IDBI Bank shall own and have a right in perpetuity to use all Intellectual Property Rights which have arisen out of or in connection with the implementation of this Contract, including all processes and products which have been developed by the Bidder during the performance of Services and for the purposes of interalia use or sub license of such Services under this Contract. Kindly clarify, who is going to retain the ownership of the ECL tool which will be provided to the client. The bidder should have the ownership rights to retain the tool, however bidder will give non exclusive and royalty free license to the client for the usage of such tool The bidder will have the ownership rights for the tool (pre customisation), however Bank will have exclusive rights for the tool customised/developed as per bank's requirement Section 5 Point: 13 Ability to establish ETL from various sources/legacy systems/ formats As per our understanding the ETL process would be designed by the Bank's team in consultation with the bidder As per software requirement, data will be made available in risk database and same need to be fetched from server. If required any additional information the data will be fetched from respective system. During the implementation the same will be envisaged and ETL process will be designed jointly Section 5 Point: Section 5 Point: System should be capable for manual updation of data of central accounts, MOC, MOC Reversal etc. Bank to provide details of types of MOCs that would require manual updation To compute credit risk RWA as per IND AS/RBI guidelines. Bank to provide more information on computation of RWA as per IND AS guidelines ECL Tool should have the functionality to generate cash flows Need examples on what are variant flags? based on the repayment schedule or inputs fed in the system / available in different source systems. The solution should generate cash flows based on the variant flag provided by the Bank MOCs will be those for adjustments made to Advances or to Investments. The tool should have the capability to make these adjustments without need for uploading entire data again. To provide account wise ECL inputs that would be used for calculation of RWA The tool should have capability to generate/take into account the cash flows in ECL computation. The cash flows may be based on variants such as repayment schedule, recovery schedule, tenor, interest rates etc The solution should be capable of computing Through the cycle (TTC) PD and Point in time (PIT) PD. The system should be capable to convert a PIT PD to TTC PD and vice versa. Ability to Interface between various applications and systems through appropriate mechanism. Ability to establish ETL from various sources/legacy systems/ formats Does bank have existing TTC to PIT conversion models or models for forecasting other risk parameters? No. of sources systems expected to be interfaced with? Is data mart available? No. As per software requirement, data will be made available in risk database and same need to be fetched from server. If required any additional information the data will be fetched from respective system. During the implementation the same will be envisaged Tool should be able to use survival analysis to estimate multi year default and / or loss experience by means of measuring the occurrence and timing of default events. System should be capable for manual updation of data of central accounts, MOC, MOC Reversal etc. Tool should have capabilities for Lineage calculation & data (input, processing, result) Need further clarification on this point. The tool should have functionality to compute lifetime PDs based on tenor of the loan using the existing historical PDs and survival analysis. Need more detail / clarification Pls refer response to query no. 4. The system displays the input and output generated. The computation is done in backend. Does the bank also want to see the formula used? Yes The Software application should have minimum capacity to login at least Fifteen (15) users simultaneously. Please provide a rough estimation of number of accounts (data volume) to be considered by the system and total number of users who will be using the solution. No of records are approximately 25 lakhs and for vintage analysis approximately 1 cr. Present user requirement 15. However, the tool should provide scalability and high performance.

2 Bid Security/Earnest Money Deposit (EMD) A reference is also invited to the Gazette No. 503 dated March 26, 2012 As per Government of India guidelines. Bidder should page 19 Clause 10, ( Copy enclosed) wherein it has been stipulated that submit the valid NSIC /MSME certificate deposit. We thus request and submit that the said exemption may please be included in the clause and it be suitably modified Cost of RFP/Bid Document and expenses incurred while bidding A reference is also invited to the Gazette No. 503 dated March 26, 2012 page 19 Clause 10, ( Copy enclosed) wherein it has been stipulated that deposit. We thus request and submit that the said exemption may please be included in the clause and it be suitably modified. As per Government of India guidelines. Bidder should submit the valid NSIC /MSME certificate The Bidder should have Annual Turnover of at least Rs. 5 crore in each of the three financial year s viz. FY , FY and We request and submit that the TO clause may kindly be modified to " The Bidder should have Annual Turnover of at least Rs. 4 crore in each of the three financial year s viz. FY , FY and " No Change in RFP Terms & & 4 The bidder should have engaged in IndAS/IFRS implementation exerciseor Supplied software/tool for Ind AS/IFRSat least in any one Commercial Bank/NBFCs in India/Overseas during last three years. We request and submit that the IndAS and IFRS requirements are but natural successors to the IRAC Norms that are in vogue. Further we submit that these concepts are in their infancy in India and thus request that the said clause may kindly be modified as under: The bidder should have engaged in IndAS/IFRS or IRAC implementation exerciseor Supplied software/tool for Ind AS/IFRS / IRAC at least in any one Commercial Bank/NBFCs in India/Overseas during last three years. No Change in RFP Terms In case of reduction of prices due to technological obsolescence / change of product model, the Bidder should pass on the price benefit to the Bank We request and submit that the product to be delivered is a system and not a HW hence there is no chance of "technological obsolescence / change of product model" resulting in any price benefit. It is therefore submitted that the said clause may kindly be withdrawn Payment will be made on the following basis for the cost of the tool: Sr. no Milestone Payment 1 On delivery of product (Installation), submission of all documents including Performance Bank Guarantee 10% 2 Configuration and Customization of ECL tool as per Bank s requirement for UAT/development 20% 3 On UAT sign off 20% 4 Go live 30% 5 After 6 months of Successful Go live and Go Live DR Site. 20% 6 Total 100% The payment processing is done centrally at Mumbai. The Bidder should submit all bills / invoices to the contact indicated in the Purchase Order. The payment will be released within 30 days from respective month end upon submission of all required documents. The application has to go live within 3 months from issuance of work order. The Bank reserves the right to extend further after evaluating the value addition at the end of the Project As an MSME we are working on wafer thin Profit Margins and with the revised tax norms are required to pay upfront the GST. Inview ofr the afforesaid we request and submit that the said Payment schedulemay please be modified as under: Sr. no Milestone Payment 1 On delivery of product (Installation), submission of all documents including Performance Bank Guarantee 20% 2 Configuration and Customization of ECL tool as per Bank s requirement for UAT/development 20% 3 On UAT sign off 20% 4 Go live 30% 5 After 6 months of Successful Go live and Go Live DR Site. 10% 6 Total 100% In terms of the revised process after implementaion of the GST norms, we are expected to pay advance GST Tax, without awaiting release of funds by the 20th of the next month for which the billing / invoice raising has been done. We in light of the above request and submit that the highlighted portion of the said clause may please be modified as " The payment will be released within 15 days from respective month end upon submission of all required documents." Ind AS and ECL concepts being recent ones and none of the Banks in India having implemented the same, the time frame may be made 6 months.

3 The EMD should be paid along with the Bid Document during submission. Bids without the EMD shall be rejected The Successful Bidder shall furnish the performance bank guarantee within 15 days of the receipt of acceptance by Bank, as per the format in Section 5 IDBI Bank shall own and have a right in perpetuity to use all Intellectual Property Rights which have arisen out of or in connection with the implementation of this Contract, including all processes and products which have been developed by the Bidder during the performance of Services and for the purposes of interalia use or sub license of such Services under this Contract. The Bidder undertakes to disclose all Intellectual Property Rights arising out of or in connection with the performance of the Services to the IDBI Bank and execute all such agreements/documents and file all relevant applications, effect transfers and obtain all permits, approvals, consents and no objections that may be necessary in this regard to effectively transfer and conserve the Intellectual Property Rights of the IDBI Bank. A reference is also invited to the Gazette No. 503 dated March 26, 2012 page 19 Clause 10, ( Copy enclosed) wherein it has been stipulated that deposit. We thus request and submit that the said exemption may please be included in the clause and it be suitably modified. A reference is also invited to the Gazette No. 503 dated March 26, 2012 page 19 Clause 10, ( Copy enclosed) wherein it has been stipulated that deposit. We thus request and submit that the said exemption may please be included in the clause and it be suitably modified. The systems being developed and deployed are with the Intellectual Property of the Developer / Bidder. We thus request and suubmit that the IPR of the solutions shall rest with us. Hence the clause may please be dropped. As per Government of India guidelines. Bidder should submit the valid NSIC /MSME certificate The successful bidder has to submit the Performance Bank guarantee. Pls refer response to query no. 2. No change in the RFP terms The Bidder agrees that the requirements given in specifications, With such a broad based "open ended" criteria it would be very difficult to No change in RFP Terms charts, etc in the Bid Documents are minimum requirements of map out the requirements and thereon the costing. In view of the aforesaid mere indicative nature and are in no way exhaustive. It shall be the request and suggest that the clause may be suitably modified to reflect the responsibility of the Bidder to meet all the requirements of boundarries as specified in the SRS document and scope creep over and specifications, charts, etc and other criteria contained in the Bid above it to the extent that it does not entail major change in the System Documents and any upward revisions and/or additions of Design or Architecture quantities, specifications sizes given in specifications, charts, etc., of the Bid Documents required to be made during execution of the works shall not constitute a change order and shall be carried out without a change order as forming part of the Services agreed hereunder and shall be carried out without any time and cost effect to Purchaser. Further upward revisions and or additions required to make Bidder s selected equipment/solution and installation procedures to meet Bid Documents requirements expressed and to make entire facilities safe, operable and as per specified codes and standards shall not constitute a change order and shall be carried out without any time and cost effect to Purchaser. Any upward revision and/or additions consequent to errors, omissions, ambiguities, discrepancies in the specification etc. of the Bid Documents which the Bidder had not brought out to the Purchaser s notice in his Bid shall not constitute a change order and such upward revisions and/or addition shall be carried out by Bidder without any time and cost effect to Purchaser Purchaser may at any time, by a written order given to the Bidder, make changes within the general scope of the Contract in any one or more of the following: i. Functional specification ii. The Services to be provided by the Bidder With such a broad based "open ended" criteria it would be very difficult to No change in RFP Terms map out the requirements and thereon the costing. In view of the aforesaid request and suggest that the clause may be suitably modified to reflect the boundarries as specified in the SRS document and scope creep over and above it to the extent that it does not entail major change in the System Design or Architecture

4 If the Successful Bidder fails to meet the requirements under Both the clauses speak of imposing Liquidity Damages over and above No change in RFP Terms Service Level Agreement like delays/or defaults/deficiency of Penalty. The said amounts to double jeopardy and hence the duplicate services in delivery/installation/replacement/repair of any or all of clause may please be removed. the equipment /Solutions mentioned in the Purchase order (PO), IDBI Bank shall, without prejudice to its other rights and remedies under and in accordance with the Contract, law or equity deduct from the Contract price, as liquidated damages, a sum equivalent 18.2 to 1% per week or part thereof of the value of P.O. subject to maximum deduction of 10 % (Ten percent) of the P.O. value. In case of undue delay beyond a period of 15 (fifteen) days unless otherwise waived by the Purchaser, Purchaser at its discretion may consider termination of the Contract The Successful Bidder would be required to install and implement the requisite support and information technology infrastructure (mentioned in Section 4) to enable the Purchaser to meet the operational objectives. It will be the Successful Bidder s responsibility to ensure the proper and successful implementation and continued operation of the proposed branch/ sites/hardware/software. System being a browser based centralised system which will be implemented at DC & DR hence implementation support clause may please be suitably modified to provide centralised implemntation support. Further, as Hardware is not part of deliverable hence kindly may be removed from the list No change in RFP Terms The objective of this RFP is to procure an ECL estimation Tool for the Bank to comply with reporting requirements of Ind AS as per Standards notified by MCA / ICAI and RBI / SEBI / and any other statutory guidelines as and when issued. The vendor will provide an application which will be used by Bank officials to compute ECL on financial assets as per Ind AS 109 requirements, estimate PDs, LGDs & EAD for various product categories, generate regulatory and other analytical reports etc. The vendor will implement the functionalities through the application. The application has to go live within 3 months from issuance of work order. The approximate number of these regulatory and analytical reports may kindly be specified. Further it may also be indicated how many would be list reports and how many consolidated ones. The regulatory and analytical reports requirement would be as and when arises by the regulator/management/auditor etc. Bidder should use his past experience and provide regulatory and analytics report On the job training on Application installation, re installation, configuration, administration and day to day support operations to be provided to designated Officers of the Bank. kindly indictae the number of such training programmes to be conducted and if they are to be held locations other than Mumbai, kindly indicate the place and number. The training support to the officers should be as and when required without restriction on the number of trainings. The location would be Mumbai Service level expectation and Penalty Both the clauses speak of imposing Liquidity Damages and Penalty. The said amounts to double jeopardy and hence the duplicate clause may please be removed. Further we may have manu dependbls in the Implementaion process which need to be sorted out and beyond the control of the Bidder Penalty (During Delivery & Installation The tool should have the ability to estimate PDs using internal rating grade and default history using methodologies such as transition matrix/vintage analysis etc. across all exposure types. To compute Life time PD numbers based on above. The tool should also have a provision to estimate product level LGD Internal rating grade is only one of the variable for estimating PDs. Using this independantly wil give a distorted picture. Similarly, external rating will also form one variable. Please clarify Product Level LGD will only be an average of each exposure. Does this have a relevance? Bidder can use his past experience and direction of IND AS. Please make necessary provision in application. Bidder can use his past experience and direction of IND AS. Please make necessary provision in application.

5 The system should be capable of computing LGD using work out Please Clarify "Work out method" The IRB guidelines issued by RBI mention the work out method as per the nature, applicability and data availability of method for calculation of LGD. credit risk exposures. LGD is usually shown as the percentage of EAD that the bank might lose in case the borrower defaults. It depends, among others, on the type and amount of collateral as well as the type of borrower and the expected proceeds from the work out (e.g. sales proceeds from sales of collaterals/securities) of the assets. Also, LGD is exposure specific i.e., different exposures to the same borrower may have different LGDs Ability to allow user to change the order in which staging rules are executed. The Tool should distinguish between senior and subordinated facilities allocating required LGD to unsecured portion of the facility as per IRB guidelines. Please clarify whether this provision is to be made available at the Branch Level user or HO level user? Please clarify Staging rules should be set and applied acros the entire portfolio. This would presently be done at Corporate office level. LGD is a function of the recovery rate. One of the factors in determining recovery rate is the type of collateral available. The LGD applied may be at product level or at collateral level. For those cases where the LGD is arrived at based on collateral the different collaterals available against the account need to be considered. The various types of collateral provided may be in the form of Eligible financial collateral (cash, own bank FDs, insurance policies, NSC etc.), residential house, stocks, receivables etc. The expected proceeds from the collateral will vary based on the type of collateral and accordingly seniority will be set. The collaterals will then be rank ordered based on seniority and LGD applicable to that type of collateral would be applied for the portion of exposure covered by that collateral. Therefore, an exposure having multiple collaterals could have multiple LGDs under this method The tool should provide for effective LGD where the bank is having other financial/airb collateral and pool of collateral Commercial Bid format Clause 2 in " Information Security Certifiacte" states : "We undertake to be liable in case of any loss that may be caused to the Purchaser due to the breach of any of the aforesaid assurances & representations and also for any physical damage, loss of information, loss of reputation and those relating to copyright and Intellectual Property Rights (IPRs), caused due to activation of any such malicious code in the hardware / software supplied. Please clarify "other financial/airb collateral and pool of collateral" We suggest that provision for quoting Training Cost may please be made separately. Said clause in the Information security Certificate is an onerous clause and hence request that it may kindly be removed. It is very open ended and the Bidder would be exposed to a great deal of responsibility resultting from Actions beyond the control of the Bidder. Further, as hardware is not part of deliverable hence please be removed from the list The IRB guidelines issued by RBI mention the list of collaterals. The RBI circualr issued in December 2011 may be referred Payment terms Sub Point Sr. No 1 8. Payment terms Sub Point Sr. No 2 On delivery of Product (Installation), submission of all documents including Performance Bank Guarantee Configuration and Customization of ECL tool as per Bank s requirement for UAT/developmen On delivery of BASE Product (Installation), submission of all legal documents including Performance Bank Guarantee (or kindly mention the list of documents ) We understand this milestone will be met once product is deployed on UAT as per Sign off GAP analysis document. Request to remove "Bank's Requirement" pharse from this clause No change in the RFP. It is clarified that here the product is IND As compliant initial tool and documents required are as per RFP terms. No change in the RFP.

6 Is the Bank also looking for a credit risk RWA capital computation engine and Pls refer response to query no To compute credit risk RWA as per IND as per RBI Guidelines. implementation as part of this RFP Is the bank looking for an FIRB calculator and mapping tables with ability to The tool should have the ability to compute optimised The tool should provide for effective LGD where the bank is having compute optimized effective LGD or would this be provided as an input from effective LGD. 51 other financial / AIRB collateral and pool of collateral banks existing credit risk calculation engine? The successful bidder should provide the database and Hardware specifications / sizing required to implement the ECL tool provided by it. Can the Bank share the below details to allow us to size: No of years sizing required Annual Growth % No of counterparties? Number of Loan/Facility Accounts? Breakup product wise (Term Loan / CC / OD /LC/BG) No of credit risk mitigants? Avg. cash flow record count for each Loan Accounts? NO of scenarios under which ECL computation is required? Typically bank are looking at about 3 Frequency of ECL run/ monthly or quarterly? Frequency of EIR / Monthly or quarterly? NO of accounts on which EIR is required to be computed Pls refer response to query no. 12. Further details would be provided to the successful bidder. Date Place 01 Feb 19 Navi Mumbai