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Is it Possible to Add a User Defined Reference Term Under Formula Based Adjustment (Doc ID 2507393.1)

Last updated on APRIL 04, 2019

Applies to:

Oracle Financial Services Funds Transfer Pricing - Version 8.0.6 and later
Information in this document applies to any platform.
Oracle Financial Services Analytical Applications (OFSAA)
Oracle Financial Services Funds Transfer Pricing (FTP)
Oracle Financial Services Enterprise Performance Management (EPM)

Goal

This is with reference to one of the seeded adjustment methods : formula based rate. The method provides the flexibility of choosing reference term along with the interest rate curve (IRC), assignment date etc.

There are following reference term selections :
Repricing frequency
Original term
Remaining term
Duration
Average Life

It is possible to add a new column in the instrument tables and use it as a reference term for computing the liquidity premium (LP) rates under this method?

The business use case as follows:

Liquidity premium is computed based on the original term of the accounts. However the treatment of LP is different for certain products. For example:

Housing loan: Based on the behavioral studies, the bank reduces the Org term of the housing loan portfolio as housing loans normally get prepaid. This reduced org term needs to be computed and looked up in to the IRC to fetch the LP rate.

Non Maturity products : For products coming in CASA, Credit Cards, Credit Cards tables, a special reference term needs to be used as 36 months (CASA) and 12 months (Cards and Credit Lines). LP to be computed based on this reference term.

Overdue accounts: The reference term for such accounts, which is to looked up in to IRC is 42 months.

All these reference terms are dynamic and may change in future as per requirements.

Can a custom column be added to store the reference term as per requirements and get looked up in to the IRC to fetch the LP rate under formula based adjustment rule?

Solution

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In this Document
Goal
Solution


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