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  • ICRA Analytics launches upgraded version of Internal Rating Solution for better and enhanced credit risk assessment

    Published on February 13, 2024

     Mumbai : ICRA Analytics Limited (IAL), a wholly owned subsidiary of ICRA Limited, has launched IRS 3.0, which is an upgraded version of its Internal Rating Solution (IRS), to help banks and NBFCs better identify, assess, mitigate, and monitor credit risk. IAL has been serving more than 15 banks and NBFCs over the last two decades through its proprietary credit risk management software IRS, which is essentially a workflow-based solution enabled with integration facility. With this upgraded version of IRS, it is hopeful of onboarding more lending institutions thereby helping them to improve efficiency by better utilization of capital.

    An Internal Rating Solution is required by lenders to enable them to migrate from Standardized Approach to Internal Ratings Based Approach, in which lenders are required to use their own internal estimates of some or all the credit risk components for calculating capital charge on exposures. This is particularly important for the lenders to ensure better utilization of capital and for higher efficiency.

    “As the lending industry evolves in India towards significantly higher tech orientation and most new-age institutions being built on tech platform, as well as tighter capital regulations from the regulator, it is imperative for the banks and NBFCs to migrate from Standardized Approach to Internal Ratings Based Approach for better utilization of scarce capital and higher efficiency. With this version of IRS 3.0 we are hopeful of upgrading our level of offerings to banks and NBFCs to help them assess and identify credit risk better and take better and more informed lending decisions,” said Jayanta Chatterjee, MD and CEO, ICRA Analytics.

    Banks and NBFCs which have been using IAL’s proprietary credit risk management software has been witnessing a significant reduction in manual efforts and manpower, leading them to higher efficiency and better utilization of capital. For instance, a large public sector NBFC with a total asset size of more than Rs 70,000 crore, providing long-term finance to diverse infrastructure projects, is reported to have been able to save hours of manual efforts and manpower resources, and additionally benefitted from creation of an audit trail in the system, capturing internal rating phases and MIS reporting. Another large Public Sector Bank (PSB) commented that the IRS solution from IAL caters to portfolio specific nuances to enable lending decisions and risk management with a high degree of precision.

    The automated and stream-lined solution provided a workflow-framework right from borrower creation to creating reports on final rating, rating justification and rating override.

    IRS 3.0

    IAL’s newly launched upgraded version IRS 3.0 is a comprehensive and tailor-made SaaS based credit risk management tool that can be deployed both on cloud and on-premises as well. The latest version of the application is accessible over desktops and laptops and additionally over phone (both iOS and Android operating system).

    The latest version of the IRS has effective Graphical User Interface (GUI) and a robust data framework. The solution is scalable, both in transaction volume and hardware. Built with high-end features like latest tech stack, standard workflow, SOA based architecture and report builder (using slice and dice customized reports), IRS 3.0 has the advantage of audit trail and error logs and customizable user access and secure data transfer.

    It is a web-based application that runs on top of Microsoft SQL Server, MySQL and Oracle Database. The upgraded version is easy to integrate with third party applications like EWS, LMS, LOS, CBS and SSO via API with configurable inputs and custom report builder. IRS 3.0 also enables its users to feed in system generated PD and LGD into IAL’s ECL Solution.

    This version enables privileged user access with added features of borrower/proposal deletion and proposal reassignment. The solution also enables hierarchy-level access to users with different approving rights to submit, accept, reject, or transfer a proposal rating.


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