3.1.6 Collateral Revaluation of Non-Market Based Securities

This topic provides information on collateral revaluation of non-market based securities.

Collateral revaluation of non-market based securities is not subjected to market fluctuation. Hence if such collateral values have to be revised then an input file containing the collateral code of all such collaterals and the latest revised collateral value must be sent to the system. The revaluation process takes place online when ever there is a change in the collateral value.

Non market Based collateral Fixed Deposit (having 100% lendable margin) has been linked to a facility on 1st January 2008 owned by a XYZ customer having the liability Symphony Group.

Liability code	Line code	Liability Limit
Symphony Limit	Loans	$1million

Collateral code	Collateral Contribution amount	Cap amount	Pool code	Collateral Pool % linkage	Pool amt
Fixed Deposit	$50,000	$50,000	Pool1	100%	$50,000

Pool contribution to the line

Pool code	Pool CCY	Line code	Line CCY	Pool Line Linkage	Pool contribution amount to line	Line Available amount
Pool1	USD	Loans	USD	100%	$50,000	$1.05million

After one Year on 1st January 2009 the Fixed Deposit amount has increased due to interest earned. Now having a revised value as $55,000. Now the latest value has to be sent to the Oracle Banking ELCM system via input file and then the “Collateral Force Revalue” for this collateral has to be triggered manually.

The revaluation increases the overall limit amount as shown below.

Liability Code	Line Code	Liability Limit
Symphony Group	Loans	$1million
Collateral code			Pool amount Collateral POOL code Collateral Contribution amount Collateral Value Pool % linkage
Fixed Deposit			$55,000 100% Pool1 $55,000 $55,000

Pool contribution to the line

Pool code	Pool CCY	Line code	Line CCY	Pool Line Linkage	Pool contribution amount to line	Line Available amount
Pool1	USD	Loans	USD	100%	$55,000	$1.055million