5.1.1.1 Cap on Net Due from Banks
If Net due from banks is positive, a certain portion of this amount can be included in the Liquefiable Assets. This portion is limited to 40% of the Qualifying liabilities.
Table 4-2 Illustration – Cap on Net Due from Banks
| Computed Amount | Example 1 | Comments- Example 1 | Example 2 | Comments- Example 2 |
|---|---|---|---|---|
| Net Due from Banks | 1240 | -190 | This sign signifies that the institution’s liabilities exceed its receivables from other banks. | |
| Qualifying Liabilities | 2000 | |||
| Capped Net due from Banks | 800 | This amount goes to the Liquefiable assets and receives the appropriate factor. | ||
| Excess Net due from Banks | 440 | This amount goes to the Qualifying liabilities and receives the appropriate factor. |
If Net due from Banks is negative, then it is only included in the denominator of LMR.
Table 4-3 Illustration – Cap on Net Due from Banks when Net due from Banks is negative
| Institution's one month liabilities to banks | 8600 | This amount goes to the Qualifying Liabilities and receives the appropriate factor. |
| Banks' one month liabilities to the institution | 8410 | This amount goes to the Deductions from Qualifying Liabilities and receives the appropriate factor. |