LIQUIDITY MANAGEMENT

Why Liquidity Management ?

• Liquidity Management is a product range or service provided for
corporate customers to achieve any of the following benefits.
• Holistic view of a group of accounts to take funding or investment descisions
• Minimize overdraft charges on individual account balances
• Enhance customers return on funds management
 The most common techniques

• Target Balancing (TB)

• Notional pooling (NP)
 Scheme types that can be used

• ODA
• SBA
• CAA
• CCA
 Target Balancing (TB)

• Support multilevel pooling

• Setup sweeps and reverse sweeps among the pool members
• Sweep options help customers manage the liquidity position among the
pool accounts to minimize the overdraft interest outflow
• Setup rules for sweep and reverse sweep options amongst the pool
members
• Shadow accounts opened automatically during the opening of target
balancing accounts help keep track of the sweep operations using
suspense placeholder
• Shadow accounts created based on the linkage between accounts
• Interest application is based on a separate interest table for the shadow
balance accounts and the sweeping options set
 Notional pooling (NP)

• Supports better interest returns on the balances

• Single level pool
• Single shadow balance account
• Interest calculation happens on the net balance of all accounts
belonging to the customer and defined in the structure. Hence,
sweeping as a functionality is not seen in notional pooling accounts
• Entries are separate for each day and values cannot be carried
forward
• Interest calculation is based on the interest method selected
Target Balancing – sweep one way
Shadow Account
Interest Application
Interest Allocation
Target Balancing – Reverse sweep
Notional Pooling
Business Process
HLMMAS
HLMGRP
HLMSWP
HLMSWPID
HLMRST
HLMRSWP
HLMACCR
HLMINT
HLMALLOC
Batch Jobs