4.3.6 Calculating Operational Amount

The application supports a new methodology to compute the operational portion of the EOP balance of deposits and balances with banks classified as operational deposits. The regulation requires banks to apply the preferential rate only on that portion of the operational deposit balance that is truly held to meet operational needs

The following steps are involved in computing the operational balance:

1. All deposits and balances with banks classified as operational as per regulatory guidelines are identified. This is a separate process in LRM.
2. The EOP balances of eligible operational accounts are obtained over a user-defined historical window including the As of Date. To identify historical observations, the f_reporting_flag must be updated as Y for one execution of the Run per day in the LRM Run Management Execution Summary UI. The application looks up the balance for such accounts against the Run execution for which the Reporting Flag is updated as Y for each day in the past.
   The historical window is captured in the Setup Master as part of the parameter named DAYS_HIST_OPER_BAL_CALC_UPD.
3. A rolling 5-day average is calculated for each account over the historical window.
4. The average of the 5-day rolling averages computed in Step 3 is calculated.
5. 5. The Operational Balance is calculated as follows:
   
   

   

   
   
6. The Non-Operational Balance is calculated as follows:
   
   

   

   
   
7. The Operational Insured Balance is calculated as follows:
   
   

   

   
   
8. The Operational Uninsured Balance is calculated as follows:
   
   

   

   
   
9. The Non-Operational Insured Balance is calculated as follows:
   
   

   

   
   
10. The Non-Operational Uninsured Balance is calculated as follows:
    
    

    

    
    
    The operational deposit computation process is illustrated in the following table, assuming a 15-day historical window instead of 90-days and for the As of Date 28th February 2017. The historical balances for 15-days including the As of Date are provided as follows:

    Table 3-1 Operational Deposit Computation

    Clients With Operational Accounts	Eligible Operational Accounts	Historical Time Window															As of Date
    		2/14/ 2017	2/15/ 2017	2/16/ 2017	2/17/ 2017	2/18/ 2017	2/19/ 2017	2/20/ 2017	2/21/ 2017	2/22/ 2017	2/23/ 2017	2/24/ 2017	2/25/ 2017	2/26/ 2017	2/27/ 2017	2/28/ 2017
    A	10001	102,000	102,125	102,250	102,375	102,500	102,625	102,750	102,875	103,000	103,125	103,250	103,375	103,500	103,625	103,750
    	10296	23,500	23,550	23,600	23,650	23,700	23,750	23,800	23,850	23,900	23,950	24,000	24,050	24,100	24,150	24,200
    B	31652	65,877	59,259	59,234	59,209	59,184	59,159	59,134	59,109	59,084	59,059	59,034	59,009	58,984	58,959	58,934

    The rolling averages and cumulative average are computed as follows:

    Table 3-2 Rolling Average and Cumulative Average Computation

    Clients with Operational Accounts	Eligible Operational Accounts	5-day Rolling Average											Cumulative Average(a)
    		2/18/ 2017	2/19/ 2017	2/20/ 2017	2/21/ 2017	2/22/ 2017	2/23/ 2017	2/24/ 2017	2/25/ 2017	2/26/ 2017	2/27/ 2017	2/28/ 2017
    A	10001	102,250	102,375	102,500	102,625	102,750	102,875	103,000	103,125	103,250	103,375	103,500	95136
    	10296	23,600	23,650	23,700	23,750	23,800	23,850	23,900	23,950	24,000	24,050	24,100	22721
    B	31652	60,553	59,209	59,184	59,159	59,134	59,109	59,084	59,059	59,034	59,009	58,984	56931

    The operational and non-operational balances are computed as follows:

    Table 3-3 Operational and Non-operational Balances Computation

    Clients with Operational Accounts	Eligible Operational Accounts	Current Balance(b)	Operational Balance(c = a – b)	Non-Operational Balance	Insured Balance	Uninsured Balance	Insured Operational Balance	Uninsured Operational Balance	Insured Non-Operational Balance	Uninsured Non-Operational Balance
    A	10001	103,750	95,136	8,615	100,000	3,750	95,136		4,865	3,750
    	10296	24,200	22,721	1,480		24,200		22,721		1,480
    B	31652	58,934	56,931	2,003	58,934		56,931		2,003

    Note:

    • Negative historical balances are replaced by zero for this computation.
    • For operational accounts that have an account start date greater than or equal to 90 historical days including the As of Date, missing balances are replaced by previously available balance.
    • For operational accounts that have an account start date less than 90 historical days including the As of Date:
      1. Missing balances between the account start date and As of Date are replaced by previously available balance.
      2. The rolling average is calculated only for the period from the account start date to the As of Date.