4.4.1.2 Calculation of Net Cash Outflows (NCOF)

As per the US Federal Reserve, the net cash outflow calculated on a cumulative basis on the last day of the liquidity horizon is taken as the denominator value in case of the modified LCR calculations. The liquidity horizon prescribed by the US Federal Reserve for the calculation of modified LCR is 30 calendar days.

Numerical example for Net Cash Outflow Calculation – Modified LCR: The table below illustrates the modified LCR approach. For computational convenience we have taken the liquidity horizon as 10 days instead of 30 days.

Table 3-10 Net Cash Outflow Calculation – Modified LCR

Calculation Day	Non-Maturity Cash Outflows	Cash Outflows with Maturity equal to Calculation Day	Cash Inflows with Maturity equal to Calculation Day
Day 1	200	100	90
Day 2	200	20	5
Day 3	200	10	5
Day 4	200	15	20
Day 5	200	20	15
Day 6	200	0	0
Day 7	200	0	0
Day 8	200	10	8
Day 9	200	15	17
Day 10	200	25	40
Total	200	215	200

Cumulative Cash Outflows = 200+215 = 415

Net Cash Outflows = 415 – Min (0.75* 415, 200) = 215