Historical Movement Matrix Computation

The first step in the Average Transition Matrix computation process is to compute the movement matrix between the MIS Date and the previous Date. After the two dates are arrived at, the accounts under each valid segment are grouped based on the combination of the Previous and Current Rating or DPD Band. After the accounts are grouped, the movement amounts or values are computed between any two Ratings or DPD bands as follows:

• The previous date is inferred based on the Frequency of the Matrix as per the assignment made in the Param table for the given Segment.
• Transition Matrices are generated only for Segments with the TM Compute flag marked as Y in the Param table.
• The Rating or DPD basis is decided per the values assigned in the Param table for the given segment.
• The basis of computation - Number of Accounts or the Outstanding Amount of the Account is decided per the values assigned in the Param table for the given segment.