The Full Form of ICAAP is Internal Capital Adequacy Assessment Process.

This Guideline outlines OSFI’s expectations with respect to an institution’s internal capital adequacy assessment process as described in Part 3 of the Basel II Framework. ^Footnote1 It applies to banks, bank holding companies and to federally regulated trust and loan companies, collectively referred to as institutions.

OSFI’s Capital Adequacy Requirements (CAR) guideline establish minimum standards for calculating minimum or target regulatory capital requirements.

OSFI’s supervisory review process evaluates the inherent risk within each significant activity undertaken by an institution and then evaluates the quality of the risk management applied to mitigate these risks. OSFI’s assessment of an institution’s ICAAP supplements its independent assessment of inherent risk and risk management, and can result in fine-tuning of these assessments.