Introduction - Internal Capital Adequacy Assessment Process (ICAAP) Guidelines
ICAAP is understood as bank’s internal assessment of capital that it considers adequate to cover all material risks to which it is exposed. The scope and coverage of ICAAP is much beyond the Pillar 1 in the sense that it notonly covers the Pillar 1 risks (credit risk, market risk & operational risk) but also encompasses all material risks.
ICAAP is a set of policies, methodologies, techniques and procedures to assess the capital adequacy requirements in relation to the bank’s risk profile and effectiveness of its risk management, control environment and strategic planning. This includes
basic requirements to have robust governance arrangements, efficient process of managing all materia risks and an effective regime for assessing and maintaining adequate capital.
ICAAP is a set of policies, methodologies, techniques and procedures to assess the capital adequacy requirements in relation to the bank’s risk profile and effectiveness of its risk management, control environment and strategic planning. This includes
basic requirements to have robust governance arrangements, efficient process of managing all materia risks and an effective regime for assessing and maintaining adequate capital.
ICAAP should be all encompassing process taking into account all those risk areas which are not reasonably addressed under Pillar 1 of Base l II, while evaluating credit, market, and operational risks; and all those risks factors which are not covered under Pillar 1 process. ICAAP should also capture the impact of external business and economic environment.
ICAAP is understood as bank’sinternal assessment of capital that it considers adequate to cover all material risks to which it is exposed. The objective is to determine the economic capital required to cover all risks faced. While Regulatory Capital is the capital that the regulator requires a bank to maintain where as economic capital is the capital that a bank needs to maintain and is, in general, estimated using internal risk models
ICAAP is understood as bank’sinternal assessment of capital that it considers adequate to cover all material risks to which it is exposed. The objective is to determine the economic capital required to cover all risks faced. While Regulatory Capital is the capital that the regulator requires a bank to maintain where as economic capital is the capital that a bank needs to maintain and is, in general, estimated using internal risk models
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