TENDER NOTICE

Archive

Dated: 5th July , 2006

Uco Bank invites Request For Proposals (RFP) to set up Functional Derivative Desk

Uco Bank invites Request For Proposals (RFP) to set up within a stipulated time Functional Derivative Desk in the Bank and to put in place proper systems and procedures for its operation. This shall inter alia include drawing up a policy document for derivative operation, defining organizational structures, evaluating man-power requirement , putting in place risk management structures / procedures, preparation of procedures/accounting manual , drawing of business plan etc., implementation and post implementation assistance in all aspects. The role of consultants shall broadly be as under :-

1. Drawing up a policy document for the derivatives operation of the Bank which inter alia to include:

1. The purposes for use of derivatives.

2. The types of proprietary transactions to be undertaken (hedging/trading)

3. The variety of derivatives products to be offered to the clients and procedures to be followed for undertaking client derivatives business.

4. Systems for measuring risks vis-à-vis internal control.

5. Set up limits for Banking Book and Trading Book.

6. The basis for setting up counter party exposure limits.

7. Setting up stop loss limits.

8. Valuation principles.

9. Reporting - MIS, Internal & statutory.

10. Accounting policies

2. Defining Organisations Structure :

1. Segregation of Front, Mid and Back Office defining their roles and responsibilities.

2. Draw line of responsibilities of different tiers.

3. Sanctioning authorities.

4. Designing Workflow.

5. Evaluating Manpower requirement.

3. Preparation of Procedural Manual :

3.1 Front Office

1. Pre deal execution procedures
    
2. Deal execution
    
3. Post deal execution
    
4. Deal ticket samples
    
5. After Office hours trading
    
6. Dealing with brokers
    
7. Front office reports

3.2 Mid Office:

1. Pre deal procedures
    
2. Post deal procedures
    
3. Market data updating
    
4. Reports
    
5. Back testing
    
6. Stress testing
    
7. Typical report formats
    
8. Setting up counter party limits/dealer-wise limit/production-wise limit
    
9. Review of the portfolio

3.3 Back Office :

1. Post deal execution
    
2. Market data updating (Back Office System)
    
3. Settlements
    
4. Monitoring daily inflow outflows
    
5. Regulatory reporting
    
6. Documentation for proprietary/client deals

3.4 Decision making process

3.5 Review procedure

4. Evaluation of the existing pricing /accounting system already in place and suggestion for improvement thereof.

5. Accounting and taxation including formats of books and registers to be maintained.

6. Drawing up a Business Plan.

The Business Plan will include products to be offered to Clients, marketing strategy and Derivatives Strategy. Business plan should define targets and progress parameters.

7.Implementation of the above :

The consultant will also assist in the implementation of the above-mentioned policies and procedures. The consultant shall arrange for training of various levels of staff and selection and training of personnel for front, mid and back office.

8.Post implementation assistance :

The consultant will assist the derivatives desk in structuring the products and will provide product ideas to the desk depending on client requirement vis-à-vis market situation for a period of one year after setting up the derivatives desk. The consultant will also assist the derivative desk in case operational and procedural problem emerges post implementation.

Companies/Firms which are eligible as per the criteria laid down below should submit their Technical Specification as well as Financial bid in separate sealed envelopes within 2 weeks from the closing date of advertisement on the website. Technical Specification should not contain any reference of the price, but to give details of the approach to be adopted by the consultant for setting up the desk as stated above and time frame needed for the same. The bid to also contain the process to be adopted by the consultant in the light of broad requirements of the same. The financial bid to contain price/fees/charges to be charged by the consultant along with the terms and conditions of payment.

Eligibility Criteria:

1. Successful track record of Setting up/advising setting up of Derivative Desk ( in at lease 5 institutions - Banks/PD/FI/Corporates)
     
2. A minimum experience of two years in setting up and advising clients in setting up derivatives desk
     
3. 3.Managing body of the firm should have experience in Forex & domestic market with one of the members having an experience of at least 5 years in the relevant field.
    
4. Team Leader should have experience of working with reputed organization in the field of forex/domestic/derivatives ( list of institutions and name of contact persons to be supplied).
     
5. Members of the team that shall work for the Bank should have at least 2 years experience in forex and domestic market and head of the team should have 5 years experience in the above field.
      
6. The firm should have expertise in formulating Derivative/Risk Management policies for different institutions.
     
7. Firm should have expertise in imparting training in the field of derivatives.
     
8. Firm to have annual turn over of Rs. 50.00 lacs with a minimum Net worth of Rs. 100.00 lacs.

Selection Process:

Based on the technical proposals received from applicants , the Bank shall shortlist qualified bidders. Such short listing shall be based on eligibility criteria as defined above.

The short listed bidders would be invited by the Bank to make a presentation on their capabilities and abilities to execute the project within a given time frame.

The technical bids will then be evaluated for preparing a final short list of bidders.

The interested parties may submit their applications containing technical and financial of bids as per the prescribed format (annexed) by post/courier/hand delivery to the under noted address so as to reach before 5.00 p.m. on 28-07-06.

The General Manager,
Treasury & Investment Management Department,
UCO Bank,
Head Office,
7th floor, 10, BTM Sarani,
Kolkata - 700 001.

No request received after this date and time shall be entertained.

Other important instructions:

1. Incomplete responses or responses not in tune with the above deliverables as stated in the RFP will be rejected.
     
2. The bank reserves the right to reject any or all of the responses to this advertisement/RFP without assigning any reasons.
     
3. Offer shall be submitted only for the full Schedule of Requirements. Offer for part schedule will not be considered.

Technical Proposal : The consultant must submit one hard copy and one soft copy for this part. One of the hard copies should be marked as original. Cover containing technical proposals should be super scribed as "RFP-DER-TP" in bold letters.

Financial Proposal : Financial bids must be enclosed in a separate sealed envelope. The consultant should provide only the hard copy. Cover containing financial proposals should be super scribed as "RFP-DER-CP" in bold letters.

The best and firm price should only be quoted. All prices should be in Indian Rupees and should be inclusive of all applicable taxes. However, the consultant should provide break up of the base price, taxes and duties for the consultation.

Escalation in price quoted is not permitted for any reason whatsoever. Prices quoted must be firm till complete execution of contract.

An Indian Agent on behalf of the Foreign Principal or the Foreign Principal directly can bid in a tender but not both.

All disputes and differences of any kind whatever arising out of or in connection with the RFP/Purchase order shall be subject to jurisdiction of Kolkata Courts.

Notwithstanding anything contained hereinabove , in case of any dispute , claim and legal action arising out of this RFP, the parties shall be subject to the jurisdiction of courts at Kolkata, India only.

Use of this RFP : This document or any other document related to this RFP or any portion thereof shall not be used for any other purpose , except for submission of the proposals in response to this RFP.

Bank information security and confidentiality : The consultants should maintain secrecy standards consistent with the secrecy of the Bank. These include, but are not limited to, strict control of access to data and maintaining confidentiality of information gained from this RFP, or while gathering further information from the Bank. Information pertaining to the Bank obtained by the consultant as a result of participating in this project is confidential and must not be disclosed without a written authorization from the Bank.

General Conditions :

No costs incurred by applicant in making this offer in providing clarification or attending discussions, conferences, making presentations or site visits will be reimbursed.

The Bank reserves the right to cancel the bid in case it is found at a later date that the details furnished by the bidder are false and also to take action against such bidders for any damages that may be caused to the Bank.

The Bank will have the liberty to short-list suitable firms who meet the Bank's requirements, from the responses received.

The Bank reserves the right to shortlist consultants, based on the requirement of the Bank and consider them for the next stage of evaluation. The decision of the Bank in this regard shall be final.

The Technical Bids will be opened in the presence of bidders who choose to attend the meeting . The Time Schedule for submission and opening of the bid shall be as under :

REQUEST FOR PROPOSAL (REP)

BASIC INFORMATION:

* Attach certificate from a Chartered Accountant certifying the Net Worth & turn over of the Partners/ Firm/ Company

Back