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News » Press Releases » Intertec speaks on Basel II and why all banks must start implementing Basel II
Last Update: 02/09/2007
With the January deadline fast apptoaching, it is now upto the banks to decide whether they want to implement Basel II or join the ranks of tier II banks.
"If these banks do not move towards the advanced approach, they are going to lose a lot of leverage," said Kothari. "The cost of business goes down, and international banks would prefer to work with banks who have the advanced approach in place.
"They may be treated as second-tier banks if they are using the standard rather than the advanced approach."
Intertec offers FlexFinance, a Basel II solution, but Kothari said that some banks are still trying to manage their risk using only spreadsheets. He says this may be feasible to measure credit risk, but not operational risk.
Banks putting in place the standard approach now are also likely to spend more on implementing their systems, since they will have to go through two implementations, he said.
Kothari estimated that an implementation could cost between US$1 and $5m, depending on the degree of complexity, and could take between three and six months to complete.
However, he said that Intertec has worked with several banks in the UAE, Bahrain and Oman that are well advanced in their preparations.
Intertec Systems is the local partner of Fernbach, which Fernbach manufactures FlexFinance Basel II, which supports parallel calculations so banks can run their Basel II processes in parallel with their old processes for a time to ensure a smooth transition. The solution supports Arabic language too, thus making Fernbach among the first to launch a Basel II compliance solution in the Arabic language.
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