1. User Guide
  2. Staging and Account Classification Process

33 Staging and Account Classification Process

This module discusses the procedure for creating and executing the Staging and Account Classification Process. While creating this process, the user needs to select the modelling set. Based on the modelling set selection Rating Mapping Rule, Stage Determination Rule, Stage Curing Rule and Account Classification Rule will be available for the selection. Users can define Account Classification Rule at the process level. The user can define Rating Mapping Rule, Stage Determination Rule, and Stage Curing Rule at the product, and customer type level and the User can do further customization based on the dimensions which are inherited from the modelling set. Below are the key points for this process:
  • POCI accounts are filtered out from the Stage Determination and Stage Curing. Once the account is identified as POCI then it is always POCI for the life of the account.
  • POCI accounts don't have any IFRS 9 Stages.
  • At the stage table level, if any account is tagged with the POCI flag and IFRS 9 stage then the system will continue with only POCI Flag, the IFRS9 stage won’t get carried forward.
  • At the stage table level, if any account is tagged with particular IFRS 9 stages, then the system won’t recalculate the stage determination and stage Curing. For such accounts, the final stage will be assigned as per the stage table-level data. This IFRS 9 stage can be changed with the Override screen feature.
  • At the stage table level if account classification is null then those accounts get considered for account classification.

Filtering of Fair Value Through Profit or Loss (FVTPL) Asset Accounts from the Staging Process

FVTPL Asset Accounts Filtered out from the Staging Process: Asset accounts that are tagged under FVTPL are filtered from the (IFRS 9) staging process as the primary purpose of staging is to calculate the Expected Credit Loss (ECL). The ECL is not calculated for FVTPL assets. Any changes in the asset's value are directly routed through the profit and loss of the bank (mark to market) and are part of the fair valuation.

FVTPL asset accounts are filtered from the staging process and the stage is applied to assets, Off Balance Sheet instruments with account classification as AMRTCOST or FVOCI.
  1. The Account Classification is tagged to an account in two ways; either through the staging tables or through the Account Classification Process run.
  2. The Account Classification process must be run before the Stage Determination.
  3. If the a stage has been provided through the staging table, then that stage is marked as null if an account is marked with FVTPL
  4. In the end, the stage is marked only to assets with the Account Classification as AMRTCOST or FVOCI.
  5. This in turn improves the performance.