IDBI Bank Limited Response to pre-bid queries to Request ... · Opp NSE, Next To SBI, BKC, Bandra E Mumbai Pin :400051 Maharashtra ... Guidance note issued by ICAI or any other model

IDBI Bank Limited

Response to pre-bid queries to Request for Proposal For Engagement of Consultants for “Internal Financial Controls Over Financial Reporting (IFCO-FR)”

Response to Pre-bid queries - RFP for Engagement Of Consultants For Implementation of Internal Financial Controls Over Financial Reporting (IFCO-FR)

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The Bank had issued the Request for Proposal (RFP Reference No. FAD/93/2016-2017 dated December 26, 2016) to the

bidders for the “Engagement of Consultants for Implementation of Internal Financial Controls Over Financial Reporting (IFCO-FR).

As per the terms of the RFP document the last date and time for receipt of written queries for clarification from bidders was January

03, 2017 by 05.00 PM. In respect of same Bank has received pre bid queries from some bidders. Accordingly, replies to these pre

bid queries are given as under. This document covers additions, corrections and clarifications to the queries raised by the Bidders,

as well as other additional information which Bank considered essential to be furnished to the Bidders to gain a better

understanding of the Bank‟s requirements as part of the RFP. All efforts have been made to provide the maximum available

information and answer the pre-bid queries submitted by the Bidders. The Bidders are required to consider the information provided

in this document as the latest guidelines. The Bidders have been provided with the clarifications and details through this document.

However the questions pertaining to details that were already provided in the RFP have not been answered. Please treat this

document including the entire Pre-Bid Queries Responses provided by the Bank as an integral part of the RFP document issued.

Only the sections, clauses, terms referred in this document are revised/updated to the extent revised/clarified. All other terms and

conditions of the RFP document remain unchanged.


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Sr. No Reference Query Bank's Reply/ Clarification

1 Annexure-A whether a Bidder can consider strength of its Affiliates/ Group companies/ member firms working under the common brand name and engaged in similar activity?

Please be guided by Point 6 Definition sub point c) "Bidder/ Applicant/ Consultant" means the entity or firm who is submitting its proposal for providing services to Bank.

2 Annexure-A We would like to inform you that , we have totally 13 partners in India and 154 full-time professional staff in India as on 31.03.2016, out of which 4 partners and 43 full-time professional staff are in Mumbai office and that should make us Technically eligible to participate in the RFP. Request you to kindly confirm the same to us, so that we can go ahead to submit the RFP.

Please be guided by Annexure-A Eligibility criteria - Sl No. 7. RFP terms prevail.

3 Annexure-A In the eligibility criteria 1, the bidder should be a Government Organization/ Public Sector Unit/ Partnership Firm/ LLP/ Private Limited Company/ Public Limited Company registered or incorporated in India. However, in criterion 2, the bidder should have been a Central Statutory Auditor (CSA) of a Public Sector Bank (PSB)/ Private Sector Bank.A Government Organization/ Public Sector Unit/Private Limited Company/ Public Limited Company registered or incorporated in India cannot be a CSA of a Public Sector Bank / Private Sector Bank. Request you to please clarify this eligibility criteria.

All the Eligibility Criteria as specified in Annexure-A should be complied


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4 Annexure-A KPMG has been assisting many Financial Services Entities in IFC Implementation. However, KPMG is not a Central Statutory Auditor („CSA‟) of any Public / Private Sector Bank. In view of the above, can this eligibility criteria be waived.


Whether experience of audit under US GAAP along with ICOFR opinion of Indian Banks with balance sheet size more than INR 50,000 Crores can be considered instead of the requirement of CSA of Public / Private Sector Bank ?


5 Point No.6 Definitions

Can the definition be changed to say a permanent employee designated as Partner in a Partnership Firm.

The Definitions in RFP prevail and cannot be modified.

6 Annexure-E Whether subsidiaries / associates indicated in Page No.6 needs to be covered as a part of the scope.

The subsidiaries/associates indicated in page no 6 are not to be covered as a part of the scope.Please be guided by Annexure E - Scope of Assignment

7 Annexure-E Provide following details that needs to be covered as a part of the scope:

List of Zones List of Zones at present. List of Zone: Kolkata Zone, Address: S.Sarani,Kolkata 44, Shakespeare Sarani PB No 16102 Kolkata Pin :700017 West Bengal Nagpur Zone, Address:RBG West II Zonal Office, Dharampeth,


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Nagpur Salasar Prestige, 1st Floor, Plot No.-1/A,Off WHC Road, Dharampeth Nagpur Pin :440 010 Maharashtra Chandigarh Zone, Address: Sector17,Chandigarh SCO 72-73,Sector 17 - B Chandigarh Pin :160017 Chandigarh Bhubaneswar Zone, Address: Janpath, Bhubaneswar IDBI House, 2nd floor,Janpath Bhubaneshwar Pin :751022 Odisha Ahmedabad Zone, Address:CG Road,Ahmedabad IDBI Complex,Lal Bungalows Off CG Road Ahmedabad Pin :380006 Chennai Zone, Address:Saidapet,Chennai 115, Anna Salai,Saidapet Post Bag No. 805 Chennai Pin :600015 Tamil Nadu


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Mumbai Zone, Address: RBG West I Zonal Office, BKC Mumbai,IDBI Tower, Plot No C-7, G Block, Opp NSE, Next To SBI, BKC, Bandra E Mumbai Pin :400051 Maharashtra New Delhi Zone, Address: RedCrossRd,New Delhi Indian Red Cross Society Bldg, 1, Red Cross Road,Post Box Num 231, New Delhi Pin :110001 Delhi (UT - NCT) Bengaluru Zone, Address: MissionRd,Bangalore IDBI House,58 Mission Road Bangalore Pin :560027 Karnataka Pune Zone, Address:FC Road-Pune IDBI House,Dynaneshwar Paduka Chowk Fergusson College Road Pune Pin :411004 Maharashtr


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Hyderabad Zone. Address:Chapel Rd - Hyderabad D. Num 5-9-89/1 and 2, Chapel Road,P. B. Num 370, Hyderabad Pin :500001 Telangana Note: The list may increase or change or regrouped during the currency of assignment.

List of Various Business Verticals/ departments All the business verticals/ departments have to be covered. The details of the same would be shared to successful bidder on commencement of the assignment.

8 Annexure-E What are the critical applications / IT Systems that needs to be covered as a part of the IFCO-FR Assistance?

All the systems within the Bank need to be covered.

9 Annexure-E How many controls are documented by the Bank already, which needs to be tested for compliance certification to the Audit Committee?

Please be guided by Scope of Assignment, Annexure-E.

10 Information required: List of Zonal offices and its complete address

Kindly refer to query 7 above


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List of Business Verticals/ Departments to be covered as a part of the Risk Control Matrices (RCM)preparation assignment


List of banking products to be covered as a part of the RCM preparation assignment

All products to be covered, the details of which shall be shared to the selected bidder.

11 Annexure-E RCM Framework preparation & Compliance testing: a. Quantum of transactions for process walk through & sample testing will be based on Guidance note issued by ICAI or any other model will be defined by bank? If other model is used please provide complete details

Please refer Point no 4 Proposed Assignment Phase II and Scope of Assignment Annexure E

b. Compliance testing and certification is required to be done for Corporate & Zonal offices only or branches &Centralized Operations Centres (COC) also?


c. In case compliance testing is required to be done for branches &COC also, will it be for 100% branches or centres or only representative branches? On what basis will the representative branches selected for testing?

Please refer Scope of Assignment Annexure E

d. Branches in Urban & Rural both to be covered, if yes, how the same will be determined and number of branches to be covered


e. Any Standard Operating Procedures currently in use for banking operations? If yes, the same shall be provided to auditors for preparation of RCM framework.

Standard Operating Procedure if any shall be shared to the successful bidder.


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12 Annexure-E Training and awareness:

a. Training & Awareness session shall be for the concept of ICOFR or entire for explaining the controls and risks defined in existing RCM framework? Please elaborate.


b. Timelines for completion of Training & Awareness session- is it end of March 2017?

Please refer Point no 4 Proposed Assignment Phase II and Annexure E and Annexure F

c. Is consultant required to visit all Centralized Operations Centres in Mumbai &Navi Mumbai, please spell out the number of COC and its location

Please be guided by RFP. The details would be shared to successful bidder on commencement of assignment.

13 Annexure-E Compliance testing -March 2017

a.March 2017 compliance certification will be based on RCMs designed in Phase I? Please confirm.

Please be guided by Annexure E of RFP

b. Timelines for completion of March 2017 certification? Kindly let us know the date by which time you require this certification. It would depend on the planning and execution on both bank and our side.

Timelines shall be intimated to the successful bidder.

14 Annexure-E Compliance certification- from June 2017

a. Timelines for completion of March 2017 certification? Kindly let us know the date by which time you require this certification. It would depend on the planning and execution on both bank and our side

Refer query 13 (b)


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15 Information Technology

a. What is the ERP (Core Banking System) currently used for banking operations & accounting

The details will be shared on commencement of assignment.

b.Will auditors be provided with Auditors login with "Read only" access for viewing transactions in ERP


c.Will auditors be allowed to access ERP data of all other locations from a central point ieCorporate office or Zonal office?


d. Where are IT operations conducted from, location of the main/ DRP server?


16

ARTICLE 3

Fees

a.Undisputed fees mentioned in Clause 3.4 (a) includes reimbursement of taxes or not. Please clarify as we would be charging the applicable service tax for fee and out of pocket expenses if any.

Please be guided by Article 3.1 (a) and 3.4 (a)

17 ARTICLE 3 Travelling & Local conveyance reimbursement

a.Is there a specific travelling & local conveyance reimbursement policy for this assignment

Please be guided by Article 3.1 (a)

b.Are limits defined for boarding &lodging, mode of travel etc.?

Please be guided by Article 3.1 (a)


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18 Annexure-E With reference to section Risk Assessment, sub point (i) “document the process” in RFP Document, kindly elaborate the form of documentation expected? Alternatively, are only Risk Control Matrices (RCMs) expected to be prepared and delivered? It is suggested that only RCMs are prepared and flowchart and narratives are excluded from scope. Kindly advise.

Please be guided by the Scope of Work in RFP

19 Annexure-E What are the exact deliverables expected by the Bank?

Please be guided by the Scope of Work in RFP

20 Annexure-E Is Annual Updation of RCMs required? When this updation should be carried out? It is suggested that entire process review and updation may be carried out once in September 2018.

Refer Annexure-E of RFP point B

21

We are considering IDBI Bank Ltd. (the Bank) in the scope and other group entities are excluded from the scope of assignment. Kindly confirm.

The Scope of Assignment is for Bank as defined in Sl No. 6 a) of RFP.

22

Kindly share the no. of Departments, Divisions, Zones and Corporate Units required to be visited for understanding of process and control environment. Alternatively, organisation chart from process coverage perspective may be shared.

Refer Annexure-E for scope of Assignment and query at Serial No:7

23

Kindly share the names of existing processes for which RCMs have been designed by the Bank and no. of controls in each process to be covered for testing for quarter ended March 2017.

Please be guided by RFP


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24

We envisage following stages in the proposed assignment. Kindly confirm our understanding

Please be guided by Annexure-E of RFP

a. Testing based on Existing RCMs of the Bank – Quarter ended 31st March 2017


b. Designing of Framework and Risk Control Matrix Documentation – one time activity with one round of updation in quarter ended Sep 18


c. Operating effectiveness Testing of controls based on new Framework and new set of RCMs


25 Annexure-E Is designing of framework and RCMs need to be done basis existing documentation only or a new set of documentation should be prepared?


26 Annexure-E Walkthrough Testing includes testing of single sample for entire process. Further, this will be carried out at the time of initial designing of proposed assignment (June 17 quarter) and 1 round of updation of RCMs (for Sep 18 quarter). Kindly confirm our understanding.


27 Annexure-E Operating Effectiveness Testing includes testing of Key Controls in the process only. Kindly confirm our understanding.



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28 Annexure-E Testing in proposed assignment includes 2 rounds of Walkthrough Testing (quarter ended June 16 & Sep 18) and 7 quarterly rounds of Operating Effectiveness Testing for all processes till quarter ended March 2019 and including quarter ended March 2017. Kindly confirm our understanding.


29 Annexure-E Kindly elaborate on OE testing strategy in respect of coverage of locations, processes and no. of controls to be covered in each quarterly run as envisaged in Point 10 above.


30 Annexure-E Entity Level Controls (ELC) and IT General Controls (ITGC), if already designed by the Bank, needs to be covered in OE Testing only once in a financial year. Kindly confirm our understanding.


31 Annexure-E Is configuration of controls in a software tool or software expected to be covered in the proposed assignment?


32 Annexure-E Does configuration of Framework and Risk Control Matrices need to be compared and harmonised with any other existing Risk Management Framework system of the Bank?


33 Annexure-E Implementation of suggested controls is expected to be covered by Process Owners of the Bank. Kindly confirm our understanding.



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34 Annexure-E Rating of risks & controls need to be done by respective process owners of the Bank and hence is excluded from Scope. Kindly confirm our understanding.

Please be guided by Annexure-E Scope of Assignment

35 Annexure-E Training has been assigned completion date of March 2017 whereas revised Framework and detailed RCMs is expected to be completed before June 2017. Is training expected to be given on the basis of existing RCMs? Otherwise, training can be arranged once new framework and RCMs have been adopted by the Management of the Bank. Kindly throw some light on target completion dates of training and our understanding about the same.


36 Annexure-A The aim of this RFP is to appoint a „Consultant‟ that can assist the Bank in meeting the requirements of IFCO-FR.As the requirement is not to perform a statutory audit of the Bank, we would request the Bank to consider dropping this eligibility requirement of being a Central Statutory Auditor of a Public Sector Bank / Private Sector Bank. This will enable firms/Consultants with relevant experience and expertise to participate in the RFP

Bidder should comply the eligibility criteria as per Annexure-A


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37 Annexure-A The aim of this RFP is to appoint a „Consultant‟ that can assist the Bank in meeting the requirements of IFCO-FR. The requirement of the bidder to be a firm of Chartered Accountants should be dropped. This will enable Consulting firms like ourselves that have relevant experience and expertise in participating in this RFP.

Bidder should comply the eligibility criteria as per Annexure-A and further the terms of RFP shall prevail.

38 Annexure-B-3

The aim of this RFP is to appoint a „Consultant‟ that can assist the Bank in meeting the requirements of IFCO-FR. The requirement of the bidder to be a firm of Chartered Accountants should be dropped. This will enable Consulting firms like ourselves that have relevant experience and expertise in participating in this RFP.

Please be guided by RFP and further the terms of RFP shall prevail.

39 Annexure-B-4

The aim of this RFP is to appoint a „Consultant‟ that can assist the Bank in meeting the requirements of IFCO-FR. The requirement of the bidder to be a firm of Chartered Accountants should be dropped. This will enable Consulting firms like ourselves that have relevant experience and expertise in participating in this RFP.

Please be guided by RFP and further the terms of RFP shall prevail.


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40 Annexure-G Based on the amendments requested above, appropriate changes to the scoring criteria in Annexure G for S.No. 1 and 2 should be modified. For S.No. 1; The Bank may alternatively consider including marks for implementing Internal Financial Controls at Banks in India. For S.No. 2: The requirement of only being a CA should be relaxed. Instead number of Partners and Professional staff having experience in delivering IFCO-FR services may be considered

Please be guided by Annexure G and further the terms of RFP shall prevail.

41 Annexure-E We would submit our clarification on this requirement of the scope of work for your consideration and clarification:• The Consultant would be required to collect and collate statements / certifications from the respective Business Verticals / Departments. • Quarterly testing of IFCO-FR controls will be performed by the Consultant on a quarterly basis and report on the findings and recommendation on the controls tested will be presented to the Board / Audit Committee of the Board

Please be guided by the RFP and further the terms of RFP shall prevail.

42 Pt A, Annexure-E

Please elaborate whether the 'List of Activities' will include those which have been identified in Phase- I? Will there be a significant revisit of Phase 1?


43 Point 6, Annexure B-1

Is there a specific requirement for the number of people to be deployed on the project

Please be guided by the RFP.


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44 Annexure B-2

The accurate figure in relation to the balance sheet size of the Company during the period of contract with them may not be available with us. Is it ok to provide the balance sheet size for the financial year during which the engagement was conducted?

Please be guided by Annexure B 2

45 Annexure B-2

Is an engagement letter with the client a valid document as a supporting document for the requirements specified in Annexure B2?

Please be guided by Annexure B 2

46 Annexure B-4

Are the details with respect to the partners in the bidder firm refer to all the partners of the firm or only the ones relevant to the engagement?

Please be guided by Annexure A and B 4

47 Annexure B-5

Are the details with respect to the full time professionals in the bidder firm refer to all the full time professionals of the firm or only the ones relevant to the engagement?

Please be guided by Annexure A and B 5

48 Section 19, Page 17

Will the bank provide counter indemnification to the bidder?

Please be guided by clause 18.4 of the RFP

49 Annexure E-Scope of assignment

Other than for Training and awareness session, will any of the activities be required to be performed at the Regional/ branch/ Centralised operations centre locations? If yes, please provide a geographical spread of the theses locations.

Please be guided by Annexure E


Please clarify the Duration of the engagement and any such expectations on the commitment of the consultant during the entire duration of the assignment.



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As part of Phase 1 was testing performed based on the Risk and Control matrices which was drawn up for activities/ processes covered in Phase 1.


52 Point 2, Eligibility Criteria

Rationale for the requirement - "Bidder being a Central Statutory Auditor (CSA) of a Public sector bank (PSB)/ Private Sector Bank, whose minimum balance sheet size should have been Rs. 50,000 crores"


53 Point 1, Eligibility Criteria and Point d), Section 6: Definitions

Point 1 of the Eligibility criteria allows 'Private Limited Companies'. However, the definition of Partner as per definitions in Section 6 is 'a professional sharing profit in a chartered accounting firm/ LLP as defined under Limited Liability Partnership Act, 2008'. Please clarify in case of Private Limited Company. Further, please confirm if names of Executive Directors/ Directors can be given in case of Private Limited Companies.

Please be guided by Eligibility Criteria Annexure A

54 Annexure I Will IDBI accept any changes in the present draft of the engagement contract as per Annexure I. We request the opportunity to discuss and agree the key terms of the contract such as limitation of liability, release and indemnification, restriction to use, management's responsibility, service provider's responsibility, terms related to the deliverables which may not be discussed in the tender document.

Please be guided by clause 18.4 of the RFP


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Also if the contract is awarded to us, will IDBI be ready to enter into any service agreement/ side or supplementary agreement to the contract draft which is available in the tender document?

Please be guided by clause 18.4 of the RFP. RFP terms prevail.

55

Whether the firm will get indemnification from IDBI for any third party claims for damages/losses caused to them directly or indirectly for the services rendered by us to you which is caused not as a result of any professional misconduct or gross negligence on the part of the firm but due to inaccurate/ incomplete data or intentional misconduct by management. We would like an opportunity to discuss and agree this indemnification at the time of entering into an engagement letter.

Please be guided by RFP and the RFP terms prevail.

56

Clarification on sub contracting - The proposal is silent about the term "sub contracting" . Clarify to IDBI Bank that PW India network of assurance firms consist of 11 firms and we may make use of services of employees from other network firms within India hence this should not be construed as transferring/ sub contracting the right/ responsibilities under the contract by the firm to some one else. Also ensure to clarify that the liability for the services limited to the 1X fees will be bourne by the contracting firm only and no other firm is liable or can be sued by the client for the services. Ensure to mention this in the cover letter along with the document of proposal prepared by the team.

Please be guided by clause 10.7 of the Agreement in RFP. RFP terms prevail.


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57 Point e), Clause 20

Please clarify reason for the same. RFP terms prevail.

58 Annexure A - Eligibility criteria - Sl No. 1

IDBI has requested to share the LLP agreement and experience/ client credentials. Due to confidentiality reasons certain sections of this document may need to be redacted.

RFP terms prevail.

59 Article 5 on page 49 - point 5.3.

Please clarify reason for the same. RFP terms prevail.

60 Article 7 - page 51 - point 1.2 (i) and (ii)

We would appreciate the opportunity to discuss and agree on the same.

RFP terms prevail.

61 Page 66 - clause on indemnity

We would appreciate the opportunity to discuss and agree on the same.

RFP terms prevail.

62 Section 6: Definitions point e)

Please clarify if qualifications other than Chartered Accounts (MBA/CISA/ FRM etc) be considered.

RFP terms prevail.

63 Annexure E - section C

Need more clarity in the Certification requirement. We would appreciate the opportunity to discuss and agree the contents/ coverage of the same.

RFP terms prevail.

64 Annexure-E Please provide details of all the Departments, Products, Verticals and Systems, which are intended to be covered,

All the products of the bank and all systems are to be covered.


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65 Please provide details of all the Departments, Products, Verticals which were covered in First Phase of Review

please be guided by RFP

66 Expected Locations to be covered Please be guided by the Scope of Work in RFP

67 List of existing framework/ Risk control matrices in place covered in Phase I

Work/ Activites covered under Phase 1 would be shared to successful bidder on commencement of the assignment.

68

List of Business Verticals/ Departments at Corporate level and zonal levels


69 Design and Implementation review to be conducted for all framework existing and newly formed? Extent of checks to be performed on quarterly basis


70 List of offices along with location of where operations/ departments are located


71 List of business verticals/ departments for whom Framework needs to be defined, along with mapping of Business coverage either corporate or zonal or both.


72 List of systems which are used by Bank Details, if required, would be shared on commencement of assignment.

73

Count/ No. of awareness training to be provided, mode of training, minimum number of training to be provided


74

Project Management Officer will be appointed separately or needs to be part of team



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75

Timeline for submission of certificate on quarterly basis


76

Frequency of conducting operating effectiveness? Please be guided by RFP

77

Time periodicity for submission of quarterly report/quarterly compliance certificate.


Documents

IDBI Bank Limited Response to pre-bid queries to Request ... · Opp NSE, Next To SBI, BKC, Bandra E Mumbai Pin :400051 Maharashtra ... Guidance note issued by ICAI or any other model