Introduction to Limits

This application defines the parameters that determine the way in which the limit system operates. LIMIT.PARAMETER record can have the ID as ‘SYSTEM’. The LIMIT.PARAMETER application controls the following:

• An indicator to specify if the foreign exchange contracts must be netted before limit comparison.
• A 'number of days' to define how many days prior to Limit Expiry Date and Review Date (can be fixed in the Review Frequency field) in the LIMIT application, the approach of these events must be reported.
• A date and cycle to indicate when the first revaluation occurs and at what frequency thereafter.
• A date and cycle to indicate when a central liability report (including those liability numbers which did not move) must be produced in the back-end process.
• A date and cycle to indicate when the commodity, country and currency reports must be produced.
• A ‘number of days’, administrative Extension Days, define the maximum number of days by which the expiry date of a limit can be ’administratively’ extended before a new expiry date must be assigned to the limit.
• The LIMIT application is defined according to the specific requirements of the bank. The most important feature of this application is that it allows the bank (for each financial application) to define the precise rules applicable to an environment. In this way, the limit verification process can be established by the bank according to a bank’s own set of rules without any program maintenance.

The product group definition that allows the bank to specify the different products, (in bank’s opinion) must be part of the commodity, country and currency exposure.

Creation of Other Record IDs:

The LIMIT.PARAMETER application allows the creation of other record IDs besides SYSTEM. These record IDs can have a valid legacy application (that is, ACCOUNT, LD, MM and FOREX) as ID. The purpose of these records is to move their parametersation, which was initially done in the SYSTEM record, to new individual records for each application to improve system performance.

For example, for the ACCOUNT application, the user can create a new record, which includes all the necessary parametrisation for this particular application.

Configuring Limit Product of External Contracts in Limit Banking Capability

In Limit TBC, the default configuration for LIMIT.PARAMETER is available in the SYSTEM record. The user can update the SYSTEM record with the limit product configuration applicable to external applications such as Lending TBC. The conditions determine the way in which limit products are used to create limits.

The following user actions are allowed in LIMIT.PARAMETER to configure the limit product used by the external contracts,

• The LI.EXTERNAL.CONTRACT, which is an application in the Limit TBC that stores the details of the external contracts, can be configured as a value in the Application field of the SYSTEM record or as a separate record in the LIMIT.PARAMETER application, to map the limit product used by the external contract or application.
• The contract details and limit product details stored in the LI.EXTERNAL.CONTRACT application are validated against the product configurations in the LIMIT.PARAMETER application.

The list of configurations in LIMIT.PARAMETER that is not supported in Limit TBC is given below:

• Product and product group definition for Currency, Commodity and Country.
• Excess limit check for DDA service.
• Default product definition for money market fiduciary deposits.
• Default account limit for overdraft balances.
• Default product definition for deposit contracts in money market and loans and deposits.
• Default product definition for money market fiduciary placements for information.
• Default product definition for nostro accounts.
• Definition for central liability ledger report, commodity exposure report, country exposure report and currency exposure report.
• Definition for processing the outstanding calculation of forex limit products.
• Setup to determine the accounting type for the balance types specified in collateral code.
• Setup to allow limit sharing group.
• Netting definition for foreign exchange contracts.
• Setup to allow sweeping of unutilized account balances to contingent account balances.
• Setup to define external contract application for correspondent bank limits.
• Setup to define whether auto defaulting of collateral right ID is in limit.

The events related to Limit TBC are classified based on the event class definition in the MS.EVENT application as given below:

• Limit products – Events emitted during the limit product life cycle.
• Credit limits – Events emitted during the credit limit life cycle.
• Limit contracts – Response events emitted to the external TBC during the contract life cycle.
• Limit transactions - Response events emitted to the external TBC during the transaction processing.

The following events are emitted by the Limit Banking Capability:

Events Emitted During Limit Product Life Cycle

The table below describes the events emitted during the life cycle of the limit product.

Event Name	Description
CreditLimits.CreateProduct.ProductCreated	Indicates the creation of a new Limit product
CreditLimits.CreateValidationProduct.ValidationProductCreated	Indicates the creation of validation limit Product
CreditLimits.CreateUtilisationProduct.UtilisationProductCreated	Indicates the creation of utilisation limit Product
CreditLimits.UpdateLimitProduct.ProductUpdated	Indicates the change in limit product
CreditLimits.CancelLimitProduct.ProductCancelled	Indicates the limit product cancellation
creditLimits.createReservationProduct.reservationProductCreated	Indicates the creation of a reservation product
creditLimits.createIntradayProduct.intradayProductCreated	Indicates the creation of intraday limit product
creditLimits.updateIntradayProduct.intradayProductUpdated	Indicates the change in the intraday limit product

Events Emitted During Credit Limit Life Cycle

The table below describes the events emitted during the life cycle of the credit limit.

Event Name	Description
creditLimits.cancelLimit.limitCancelled	Indicates cancellation of the limit
creditLimits.createBufferLimit.bufferLimitCreated	Indicates creation of buffer limit
creditLimits.createIntradayLimit.intradayLimitCreated	Indicates creation of intraday credit limit
creditLimits.createLimitParameter.limitParameterCreated	Indicates creation of limit parameter
creditLimits.createReportingLimits.customerReportingLimitsCreated	Indicates creation of reporting credit limit
creditLimits.createReservationLimit.reservationLimitCreated	Indicates creation of reservation limit
creditLimits.createSecuredLimit.securedLimitCreated	Indicates creation of secured limit
creditLimits.createUnsecuredLimit.unsecuredLimitCreated	Indicates creation of unsecured limit
creditLimits.limitExpiryDueDate.expiryDue	Indicates limit expiry due date
creditLimits.limitExpiryFailure.expiryFailed	Indicates limit expiry failure
creditLimits.limitReviewDate.reviewDateReached	Indicates review of limit on the review date
creditLimits.limitReviewDueDate.reviewDue	Indicates review of limit
creditLimits.reportLimitBreach.validationLimitBreached	Indicates validation limit breach
creditLimits.reportLimitDecrease.limitDecreased	Indicates decrease limit schedule is processed
creditLimits.reportLimitExpiry.limitExpired	Indicates limit expired
creditLimits.reportLimitIncrease.limitIncreased	Indicates increase limit schedule is processed
creditLimits.updateExpiryDate.limitExpiryDateUpdated	Indicates update of the expiry date of limit
creditLimits.updateIntradayLimit.intradayLimitUpdated	Indicates amendment of an intraday credit limit
creditLimits.updateLimit.limitUpdated	Indicates amendment of limit
creditLimits.updateLimitAmount.limitAmountUpdated	Indicates update of limit amounts
creditLimits.updateLimitAvailability.limitAvailabilityUpdated	Indicates update of limit availability
creditLimits.updateLimitParameter.limitParameterUpdated	Indicates amendment of limit parameter
CreditLimits.CreateValidationLimit.ValidationLimitCreated	Indicates creation of new validation Limit
Creditlimits.CreateUtilisationLimit.UtilisationLimitCreated	Indicates creation of new utilisation Limit
CreditLimits.UpdateExpiryDate.LimitExpiryDateUpdated	Indicates a change in the limit expiry date
creditLimits.updatelimitutilisation.utilisationUpdated	Indicates a change in utilisation amount
CreditLimits.recordUtilisation.UtilisationExceeded	Indicates that limit utilization amount exceeded

Response Events Emitted during Contract Life Cycle

The table below describes the events emitted by the Limit TBC as a response during the life cycle of the external contract.

Event Name	Description
creditLimits.delinkContract.contractDelinked	Indicates the delink contract from the limit
creditLimits.recordContractClosure.contractClosed	Indicates the closure of the limit contract
creditLimits.recordContractLink.contractRecorded	Indicates the contract linkage with the limit
creditLimits.updateContractLimit.contractLimitUpdated	Indicates the change in the limit of the contract
creditLimits.updateContractOwners.contractOwnersUpdated	Indicates the change in the owner of the contract
creditLimits.updateContractProperties.contractDetailsUpdated	Indicates the change in properties of the contract
creditLimits.updateContractTerm.contractTermUpdated	Indicates the change in contract terms

Response Events emitted during Transaction processing

The table below describes the event emitted by the Limit TBC as a response to transaction processing on the underlying contract.

Event Name	Description
creditLimits.updateExposure.exposureUpdated	Indicates the limit exposure update

Events emitted for Limit Parameter

The table below lists the events emitted during the limit parameter creation and amendment.

Event Name	Description
CreditLimits.CreateLimitParameter.LimitParameterCreated	Indicates the limit parameter creation
CreditLimits.UpdateLimitParameter.LimitParameterUpdated	Indicates the limit parameter amendment

Limit Sub-allocation Events

The table below describes the event emitted during the creation and amendment of limit sub-allocation.

Event	Description
creditLimits.createlLimitSubAllocation.limitSubAllocationCreated	Indicates the Creation of Sub-allocation
creditLimits.updatelLimitSubAllocation.limitSubAllocationUpdated	Indicates the amendment of Sub-allocation
creditLimits.cancelLimitSubAllocation.limitSubAllocationCancelled	Indicates the reversal of Sub-allocation
creditLimits.expireLimitSubAllocation.limitSubAllocationExpired	Indicates the Expiry of Sub-allocation
creditLimits.updateLimitSuballocationGiven.limitSuballocationGivenUpdated	Indicates that Sub-allocation is given from the limit
creditLimits.updateLimitSuballocationTaken.limitSuballocationTakenUpdated	Indicates that Sub-allocation is taken from External limit
creditLimits.restoreimitSuballocation.limitSuballocationRestored	Indicates that sub-allocation is given was restored
creditLimits.revokeLimitSuballocation.limitSuballocationRevoked	Indicates that Sub-allocation taken was revoked

Fed Secured Variable Limit Event

The table below describes the event emitted during amendment of Fed secured variable limit event.

Event	Description
creditLimits.updateSecuredAmount.securedAmountUpdated	Indicates the change of Fed secured limit Amount

Customer Group events

The table below describes the event emitted during the creation and amendment of customer group from Party microservice.

Event	Description
party.createCustomerGroup.customerGroupCreated	Indicates the creation of customer group
party.updateCustomerGroup.customerGroupUpdated	Indicates the amendment of Customer Group
party.closeCustomerGroup.customerGroupClosed	Indicates the Closure of Customer group

Customer Liability Group Limit

The table below describes the event emitted for creation and amendment of customer liability group limit.

Event	Description
CreditLimits.CreateLiabilityGroupLimit.LiabilityGroupLimitCreated	Indicates the Customer Customer Liability group creation
CreditLimits.UpdateLiabilityGroupLimit.LiabilityGroupLimitUpdated	Indicates the Customer Customer Liability group Amendment
CreditLimits.ReverseGroupUnsecuredLimit.GroupUnsecuredLimitReversed	Indicates the reversal of Unsecured Customer libility group limit
CreditLimits.ReverseGroupsecuredLimit.GroupSecuredLimitReversed	Indicates the reversal of secured Customer liability group limit
CreditLimits.ReverseLiabilityGroupLimit.LiabilityGroupLimitReversed	Indicates the reversal of Customer liability group limit

The loans are created in the Lending Banking Capability, an external subsystem.

The following sequence of events take place when the loan is created or updated in the Lending TBC:

1. The Lending TBC emits command events to Limit TBC whenever a contract is created or updated.
2. The adapter microservice converts the events emitted from Lending TBC to a format supported by Limit TBC and emits the events to Limit TBC.
3. The event listener receives the events and sends them to Limit TBC, which evaluates the events and updates the application in Limit TBC that holds the details of the external contracts and transactions.
   1. The LI.EXTERNAL.CONTRACT application is created and updated for all the external contracts that have a link with the limit with the relevant details of the contract.
   2. The LI.EXTERNAL.TRANSACTION application is created and updated for all the transactions on the contract with the relevant details.

The table below describes the list of events received by the Limit TBC from Lending TBC.