2. Integrated Liquidity Management - An Overview

2.1 Introduction

Liquidity Management refers to the services your bank provides to its corporate customers thereby allowing them to optimize interest on their checking/current accounts and pool funds from different accounts. Your corporate customers can, therefore, manage the daily liquidity in their business in a consolidated way.

Customers need to define ‘account structures’ which form the basis of liquidity management. The account structure reflects the hierarchical relationship of the accounts as well as the corporate strategies in organizing accounts relationships.

Liquidity management services are broadly classified as under:

● Sweeping - where physical funds are moved in account structure from child to parent or parent to child.

● Pooling - where funds are not physically moved in and out of accounts. Instead, the account balances are notionally consolidated and ‘interest computations’ carried out on such notional balances.

The Oracle Global Liquidity Management application supports a multi-branch, multi-currency liquidity management structure using architecture of ‘System Accounts’. This enables the system to keep track of balances in accounts in the structure, calculate interest on the accounts in the structure as well as track the history of the sweep/ pool structure.

Note

System accounts are internal accounts created by the system based on the role played by an account in an Account Structure.

This document is broadly classified into the following sections:

● Cash Concentration Methods

● Notional Pooling

● MBCC

● System setup required for GLM

● Building and Maintaining the Structure.

● Balance Build

● Batch Processing

● BVT Handling

● Simulations

● Dashboards

● Reports

● SMS