Business Model Test

The Business Model Test is conducted at an aggregated level. This test allows the banks to classify instruments into any of the subcategories of the business model such as Held to Collect (Assets), Held to Collect and Sell (Assets), Held to Sell (Assets and Liabilities), Held to Maturity (Liabilities), and Available for Sale (Liabilities).

To conduct the Business Model Test, various dimensions are considered to assign a business model. You can create Rules that are executed in a specific order and that helps in the categorization. The application is seeded with certain Rules which can be modified or removed.

The Rules around Business Model Test enable banks to design a hierarchy-based Holding Type assessment, that is the Rules help banks to classify their accounts into any one of the holding types, such as Held to Collect, Held to Sell, or Held to Collect and Sell.

Banks can configure Rules based on various available Hierarchies or a combination of hierarchies. For example Portfolio, Customer Type, Product, Branch, Industry, Country, Line of Business, and so on.

The standard product consists of the following rules:

Table 5-1 The Rules of the Standard Product

Source Dimensions	Target Dimension
Product, Customer Type	Holding Type
Product, Capital Exposure Flag	Holding Type
Product, Exposure for Sale Indicator	Holding Type