The product, which is priced at $8,000 for the basic credit rating package is aimed at banks, financial institutions, and corporate treasurers to decide on the pricing they should offer on a proposed debt issue; pension and mutual funds to look for value in a basket of fixed-income securities offered to them. It can also be used by traders to evaluate counter-party risks.

According to Suresh Mahajan, one of the developers of the product, it has been adapted to local conditions as generally accepted accounting principles are not as rigorously complied with in this region as compared to the developed world and the disclosure levels often leave much to be desired.

The pricing of `Riskontrol' has been decided keeping in mind the pockets of the smaller banks and non-banking financecompanies in the region. However, the product provides a complete solution to the organisation's risk evaluation and portfolio management needs at a higher price of $65,000.

`RisKontrol' can manage the credit function at the micro and macro-level. It can generate a risk-rating, evaluate a credit-risk and price it at the micro-level. At the macro-level, it can control portfolio exposures and churns out information for senior managers.

`RisKontrol's studies have revealed that loss-volatilities are local and subject-specific and vary significantly across lenders. Given this, the package has been custom-designed.

`RisKontrol's closest competitors are `CreditManager' from a JP Morgan affiliate, RiskMetrics Group (RMG) and WINFAST from Moody's. For a five-user license, the `CreditManager' comes with a price tag of $80,000. Most of the foreign banks operating in India use their customised software and do not comprise a market for credit risk management software.

Most major US banks today use risk-ratingbased credit-evaluation systems for controlling credit-risks. The pioneers were Bankers Trust in 1984.

Today, most banks have developed proprietary software, which allows them to risk rate a corporate entity, improve the quality of the credit-portfolio and weed out those business transactions, which are likely to result in a loss at a future date.

According to the developers of the software, `RisKontrol' has given the model a predictive capability, which can be used to filter potential non-performing assets (NPAs) at the appraisal stage itself. The system controls portfolio concentrations on the basis of established parameters and, thus, reduces portfolio risks. Estimates can be obtained of the loss-volatility for each creditor and in the aggregate, for the entire portfolio. `RisKontrol' also expedites the credit evaluation process leading to greater organisational efficiencies.