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'Basel-II an opportunity for tech companies'

DUBAI — Basel-II compliant solutions will fuel huge demand for Information Technology (IT) sector in UAE as many companies within Dubai Internet City as well as companies from outside are targeting UAE for a potential business opportunities.

Jyoti Lalchandani, regional director, Middle East and North Africa, International Data Corporation (IDC), said: "We have observed that many IT companies from India are targetting UAE as developing Basel II compliant solutions will definately open new horizons of business as companies in UAE will have to eventually be Basel-II compliant."

Raman Sapra, regional sales manager, Wipro, Middle East region, said: "Basel-II consulting services and implementing solutions enable customers to become Basel-II compliant. For example we have implemented an enterprise-wide, intranet-based solution that provides a long-term risk management platform for measuring, managing, and mitigating Operational Risk and in addition ensures full compliance with regulatory requirements such as Basel-II and SOX for a leading global financial services firm with operations in more than 50 countries. These services are available for our customers in the Middle East as well. In future more and more financial institutions may seriously consider Basel-II compliance for their operations."

According to a recent survey by the Financial Stability Institute. Middle East countries recognise the importance of implementing the Basel II Capital Accord, and by 2009, 89 per cent of the region's banking assets will be covered by Basel II. The survey showed that 8 out of 9 jurisdictions in the region have started preparatory work for the implementation of Basel II. According to the study, most of the respondents recognise the important role that Basel II will play in the strengthening of their financial systems.

Seven countries from the region intend to implement Basel II starting in the period 2007-09. Three countries indicated that the new capital framework will be adopted in stages, progressing from the simple to the more sophisticated approaches between 2007 and 2009. Only 13 per cent of total banking assets (of locally incorporated banks) will move to Basel II by the end-2006. This figure increases dramatically for the period 2007-09. In 2007-09 period, 89 per cent of banking assets in the Middle East are expected to be covered by Basel ll.