2.8 Liability Maintenance

This topics describes about the detailed information about the liability maintenance.

Every customer of your bank who enjoys credit facilities should be assigned or linked to a liability which is a borrowing entity. Several customers can be linked to the same Liability Code. Liability linkage can be in three ways.
  • Single Liability linked to multiple customers (that is, a Customer Group)
  • Single Liability linked to only one customer
  • Single customer linked to multiple liabilities

Single Liability Linked To Multiple Customers

Here multiple customers are linked to same the Liability Code and all restrictions/facilities maintained at liability level are shared to all the customers.

Figure 2-22 Single Liability Linked To Multiple Customers


Single Liability Linked To Multiple Customers

Single Liability Linked To Only One Customer

Here a liability is linked to only one customer and all restrictions/facilities maintained at liability level are applicable to that customer alone.

Figure 2-23 Single Liability Linked To Only One Customer


Single Liability Linked To Only One Customer

Single customer linked to multiple liabilities

Here Single customer linked to multiple liabilities all restrictions/facilities maintained at liabilities are applicable to that customer alone.

Figure 2-24 Single customer linked to multiple liabilities


Single customer linked to multiple liabilities

Note:

The fields, which are marked with an asterisk, are mandatory.
  1. On the Home screen, specify GEDMLIAB in the text box and click the Next icon.
    The Liability Maintenance screen displays.

    Figure 2-25 Liability Maintenance


    Description of Figure 2-25 follows
    Description of "Figure 2-25 Liability Maintenance"

  2. On Liability Maintenance screen, click New and specify the fields.
    For more information on fields, refer to the field description table.

    Table 2-23 Liability Maintenance - Field Description

    Field Description
    Liability No Specify the liability number. If the liability number is customer group then all customers under this group should have same liability number.
    Liability Name Specify the liability name with maximum of 255 characters.
    Main Liability Number Click the Search icon and select the required main liability from the list of liability numbers maintained in the system.

    Note: Child liability and parent liability (main liability) can be in different branch.

    During Utilization and block transactions, the utilization and block amounts are tracked for both the specified Liability and the linked parent Liability.

    After the child liability creation, you can change or delink the selected main liability through the Main Liability Change screen GEDMLBCG, if required.

    If the main liability is not selected during child liability creation, you can link the main liability at any time through the Main Liability Change screen GEDMLBCG.

    Note: The child liability's overall limit amount should not exceed the parent liability's overall limit amount.

    Main Liability Name This field is automatically populated based on the selected from Main Liability Number.
    Liability Branch Click the Search icon and select the branch in which liability is associated.
    Liability Currency Click the Search icon and select the currency with which the liability is associated. If Liability currency is different from Limit currency specified in Global Exposure Parameter, then the Liability amount is converted to the limit currency.

    Overall limit amount $1 of the customer liability exceeds the maintained Internal Lending Limit Equivalent Amount $2.

    Note: User can modify the liability currency after authorization if:
    • There are no lines, collaterals or collateral pools linked to the liability.
    • The liability is not utilized.
    • The liability is not the parent liability for another child liability.
    Overall Limit Main line limit cannot be more than overall limit. Limit amount of line reporting to a liability cannot be more than liability level limit amount.

    Only the parent facilities will be considered while validating against the overall limit.

    Note: The system validates the overall limit amount with the internal lending limit equivalent amount. If the overall limit amount is greater than the Internal Lending Limit Equivalent Amount, then the system displays an override message as Overall limit amount $1 of the customer liability exceeds the maintained Internal Lending Limit Equivalent Amount $2.
    Counterparty Appetite Specify the total project limit which can be sanctioned to the customer.
    Note:
    • It is not a mandatory field. Counter party appetite is user enterable.
    • If entered, cannot be less than the overall limit .If not entered it is derived from the overall limit.
    • If entered more than overall limit, then it is not derived from the overall limit.
    Headroom Limit The system displays the future dated headroom available to the customer. The headroom limit is updated based on the limit amount of facilities created under the liability.

    Headroom limit will be updated as counterparty appetite.

    Headroom limit should be shown as ZERO if it is negative. However internally it will be tracked and suitably updated if any linked facility is closed.

    Note: Facilities created under a child liability will update only the headroom limit of child liability. Update on the headroom limit of child liability will not affect the headroom limit of the parent liability.

    Sub-lines will not update the headroom limit.
    Utilization Amount This field displays the utilized amount for that liability ID at any point in time. User cannot edit this display.
    Block Amount Specify the block amount.
    Review Date Specify the date on which your bank would want to review the limit for the liability. The limit check continues irrespective of the date maintained here. The revision date must be greater than the start date and can also be left blank.
    Credit Rating The primary credit rating maintained in the credit rating sub-screen is displayed.

    Note: These details are maintained only for information and have no processing impact.

    Internal Credit Rating The internal credit rating maintained in the credit rating sub-screen is displayed.
    Overall Score Specify the overall credit score for the liability. The given credit score is supplemented by the multiple credit score details, if any entered in the Credit Score sub-screen.

    Note: These details are maintained only for information and have no processing impact.

    User Defined Status Click the Search icon and select the status of liability. (For example, NORM for normal, BLOCKED,and so on).
    Liability Category Click the Search icon and select the liability category from the list available here. The Category entered in Category Maintenance screen is displayed.
    Liability Clean Risk Limit This limit is captured in the Customer Maintenance screen (STDCIF). This field is populated only when the liability is created using Auto liability Creation option in Customer Maintenance screen.

    Note: This field is only display field and no other validations as such are supported.

    Secondary Clean Risk Limit This limit is captured in the Customer Maintenance screen (STDCIF). This field is populated only when the liability is created using Auto liability Creation option in Customer Maintenance screen.

    This field is only display field and no other validations as such are supported.

    Secondary Pre-Settlement Risk Limit This limit is captured in the Customer Maintenance screen (STDCIF). This field is populated only when the liability is created using Auto liability Creation option in Customer Maintenance screen.

    This field is only display field and no other validations as such are supported.
    Unadvised

    Switch to ON for this feature to be enabled.

    Switch to OFF for this feature to be disabled.

    For any transaction involving an unadvised liability, you are notified.
    Netting Required

    Switch to ON for the netting amount to be defined.

    Switch to OFF for not defining the netting amount.

    This is only for information purpose and not for processing.

    User can have the Facility to display the Netting Amount in the Netting Contribution screen. For more details on this feature, refer the Including Netting Amount in Facility's Netting Contribution topic.

    Note: Limits tracking at liability level is based on liability tracking at the parametrization level.
    • If the liability tracking is enabled, then the system allows you to track the limit at the liability level.
    • Disabling liability tracking does not allow tracking limits at liability level.
    Tanked Utilization The system computes and displays the utilization amount that can be set in the Tanked Utilization field.

    As part of EOD process, the utilization amount is set in the Tanked Utilization field.

    After BOD process, this utilization amount is updated for the liability which is linked to the transaction as per the contract and the amount is cleared from the Tanked Utilization field.

  3. Click Save to save the record.
  • Account Balance for Netting
    This topics describes about the detailed information about the accout balance.
  • Netting Contribution
    This topis describes about the detailed information on netting contribution.
  • Liability Score
    This topics describes about the procedure to specify score for a liability.
  • Credit Rating
    This topics describes about the procedure to specify credit rating for a liability.
  • Linked Customers
    The topic describes about the detailed information on the linked customer.
  • Change Log
    The topic describes about the detailed information on the change log details.
  • Merging Liabilities
    This topics describes about the procedure to merge liabilities.
  • Liability Notifications
    This topics describes about the procedure to select candidate for liability notification.

Parent topic: Limits and Collateral