Question

To mitigate concerns relating to model risk and significant variability in expected credit loss models, the Discussion Paper proposes the following mitigants, EXCEPT:

A Issuing broad guidance by RBI for designing credit risk models

B Requiring independent validation of expected credit loss models

C Specifying a prudential floor for provisions based on comprehensive data analysis

D Allowing banks to use any internal assessment without validation

E Prescribing a non-exhaustive list of disclosures by banks

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