1 Liquidity Management - An Overview

This topic describes the overview about the Liquidity Management application.

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

Customers need to define the account structures which forms 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 follows:

• Sweeping: Physical funds are moved in account structure from child to parent or parent to child.
• Pooling: Funds are not physically moved in and out of accounts. Instead, the account balances are notionally consolidated and interest computations are carried out on such notional balances.

Oracle Banking Liquidity Management application supports a multi-branch and multi-currency liquidity management structure. This enables the system to keep track of balances in accounts in the structure, calculates the interest on the accounts in the structure, and track the history of the sweep/ pool structure.