Provision Matrix Mapping

The Rules associated with this task are the following:

• Provision Matrix Assignment

  Accounts for which cash flow cannot be predicted, or is not available, can be treated with the provision matrix method wherein the provision rate is assigned to an account based on its rating or delinquency days, or both. If Provision Matrix is only rating-based then the delinquency band given at the account level, if any, is ignored, and vice-versa for the delinquency-based matrix.

  The provision rate for the accounts having the same rating or delinquency band may vary across products, customer types, or impairment status. Hence, Provision Matrix is mapped based on the following criteria:

• Impairment Status
• Customer Type
• Product

  This rule is expected to be reviewed and customized based on the data and mapping strategy of the bank.