This end-to-end system, implemented at a cost of Rs 44 crore, helps the bank mitigate all kinds of risk and enables the bank to take an appropriate step in improving its business.
According to Prakash P Mallya, chairman and managing director, Vijaya Bank, the IRMS integrates seven types of risk solutions including credit risk, market risk, operational risk management, asset liability management and funds transfer pricing.
"The scope of the project is not only to comply with the standardised approaches of Basel-II norms, but also to be compliant with advanced approaches, when put in place," he told reporters, here.
The bank has selected Wipro Technologies as the system integrator for the project, which will bring together the risk solutions, with the consortium of solution providers.
The project also envisages business continuity and disaster recovery mechanisms for all the solutions. IRMS will help the bank assess the risk involved while lending for any project or a company and informs the bank on repricing the loan portfolio among many other solutions, he said.
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Mallya said the bank has engaged Ernst & Young as consultant for the bank's IRMS project and a smooth rollover of the Basel-II framework. With this system in place, the bank will become Basel-II compliant by October 2008, he said.
He said, during the first quarter-ended June 30 last, the bank had shown a 30 per cent growth in lending and deposits. The total business of the bank has touched a level of Rs 86,000 crore, which includes Rs 34,000 crore advances. The bank will achieve its target of Rs 100,000 crore business by the end of the present financial year, he added.
Mallya said the net profit of the bank during the first quarter of the current financial year may not be as high as it was during the corresponding quarter of the last fiscal.
"Although we have shown around 30 per cent growth in the credit and deposit front, there will be pressure on our margins. There was sluggishness in the demand for retail loans, housing loans and personal loans," he said.