In the ever-evolving banking sector, managing interest rate risk remains a critical challenge for financial institutions. Fluctuating interest rates can have a profound impact on a bank's profitability, liquidity, and overall financial well-being. Asset Liability Management (ALM) systems serve as a crucial tool in assisting banks to navigate through uncertainties and make well-informed decisions to effectively mitigate risks. By leveraging ALM systems, banks can enhance their risk management practices and ensure a more stable financial future.

**The Challenges Faced**

In the current economic landscape, interest rates are constantly changing due to a multitude of factors. These fluctuations can significantly impact banks by influencing their net interest margins, cash flows, and the overall value of their assets and liabilities. It is crucial for us to stay informed and vigilant in monitoring these changes to effectively manage risks and make informed decisions. 

By understanding the implications of interest rate fluctuations, we can better position ourselves to navigate through these challenging times and ensure the stability and success of our operations.


![Role of Asset LMS Content.webp](https://server.surya-soft.com/strapi/uploads/Role_of_Asset_LMS_Content_9416381cc3.webp)

**How ALM Systems Help Banks**

Risk Measurement and Analysis: ALM systems enable banks to assess their exposure to interest rate risk by analyzing the maturity profiles and repricing characteristics of their assets and liabilities. By conducting scenario analysis and stress testing, banks can evaluate the potential impact of different interest rate scenarios on their balance sheets.

•	Optimizing Balance Sheet Structure: ALM systems assist banks in optimizing their balance sheet structure to align with their risk tolerance and business objectives. By strategically managing the mix of fixed-rate and floating-rate assets and liabilities, banks can better position themselves to withstand interest rate fluctuations

•	Liquidity Management: In addition to interest rate risk, ALM systems also help banks manage liquidity risk effectively. By monitoring cash flows and liquidity ratios, banks can ensure they have sufficient funds to meet their obligations under different interest rate scenarios.

•	Asset and Liability Matching: ALM systems facilitate asset and liability matching, where banks match the maturity and cash flow characteristics of their assets and liabilities to minimize interest rate risk. This strategy helps banks reduce their exposure to changes in interest rates by ensuring that the repricing of assets and liabilities occurs at similar intervals.

•	Scenario Planning and Stress Testing: ALM systems enable banks to conduct scenario planning and stress testing to assess their resilience to adverse market conditions. By simulating various interest rate scenarios, banks can identify potential vulnerabilities and take proactive measures to mitigate risks

•	Regulatory Compliance: With increasing regulatory scrutiny on risk management practices, ALM systems help banks demonstrate compliance with regulatory requirements related to interest rate risk management. By maintaining accurate records and reporting capabilities, banks can ensure transparency and accountability in their risk management processes.

**Conclusion**

In today's volatile interest rate environment, effective management of Liquidity Risk, Interest Rate Risk, Forex Risk Management, and Regulatory Reports is crucial for sustaining profitability and stability in banking operations. Surya's Asset Liability Management system (BALM) provides essential tools for banks to proactively identify, measure, and manage risk while optimizing their balance sheet structure and liquidity position. By leveraging Surya's ALM system, your bank can navigate uncertain economic conditions with confidence and resilience, enhancing long-term competitiveness and financial performance.



ALM - Asset Liability Management is a strategic approach used by banks to manage their Assets and Liabilities in a manner that ensures both liquidity and profitability while minimizing the risk. ALM involves monitoring, measuring, and managing various types of risks, including interest rate risk, liquidity risk, and market risk.

large_Role of Asset LMS.webp

medium_Role of Asset LMS.webp

small_Role of Asset LMS.webp

thumbnail_Role of Asset LMS.webp

Role of Asset LMS.webp

Role of Asset Liability Management Systems in Banking

#### **Introduction**
As the global economy continues to face constant fluctuations in interest rates, financial institutions are at a significant risk of incurring heavy losses due to the impact of unexpected fluctuations on their balance sheet. Banks, insurance companies and investment firms all face the challenge of managing Interest Rate Risk on Banking Books (IRRBB). The importance of assessing and managing IRRBB cannot be emphasized enough; it is a vital step to ensure the financial health of an institution.
Interest rate risk on the banking book (IRRBB) is a growing concern for banks worldwide, and the Reserve Bank of India has recently released guidelines for its management. These guidelines require banks to measure their risk exposure due to potential changes in interest rates, something that can cause severe losses to banks' balance sheets. One company that has been leading the development of software solutions to manage IRRBB is Surya Fintech. In this blog post, we’ll discuss the key aspects of IRRBB and how Surya Fintech’s software can help banks manage this risk more effectively.

#### **What is IRRBB?**
Interest Rate Risk on Banking Book (IRRBB) refers to the risk associated with changes in the market interest rates on a bank’s balance sheet. In simple words, the risk of losses that might occur due to changes in interest rates. This risk is evaluated through a metric called Economic Value of Equity (EVE). EVE represents the estimated present value of assets minus the estimated present value of liabilities for a bank. Banks can either face an increase or a decrease in their interest rate exposure depending on the structure of their balance sheet. 
One of the significant steps in managing IRRBB risk is through the classification of all banking contracts. These contracts are segregated into amenable, less amenable, and non-amenability positions, each reflecting different levels of sensitivity to changes in interest rates. The categorization of each contract assists in identifying the interest rate exposure of the institution, thus enabling the bank to take appropriate measures to mitigate the risk.

![Understanding the Importance Content.webp](https://server.surya-soft.com/strapi/uploads/Understanding_the_Importance_Content_7501309b6f.webp)

Given the inherent volatility of interest rates, stress testing is another best practice that banks can employ to manage IRRBB risk. Stress-testing involves assessing the impact of interest rate fluctuations on a bank’s assets, liabilities, and equity. It allows institutions to gauge the potential loss they could incur if a sudden and unexpected movement in interest rates were to occur.

#### **RBI Guidelines on IRRBB**
The Reserve Bank of India has recently released guidelines on IRRBB management, similar to those developed by the Basel Committee on Banking Supervision (BCBS) in 2016. These guidelines suggest a standardized framework for measuring IRRBB and highlight the need for more granular reporting. In response, banks are expected to incorporate IRRBB into their risk management policies and ensure compliance with RBI regulations by June 2023.

#### **Conclusion**
In conclusion, managing Interest Rate Risk on Banking Books is crucial for the financial health of a bank. The volatile nature of interest rates makes IRRBB management an essential aspect of banking operations, and banks must implement best practices to mitigate this risk continually. A proper IRRBB management system promotes stability and ensures that the bank's assets are adequately protected against interest rate fluctuations. RBI has released guidelines that help identify, measure, and manage this risk effectively.
As a banker, it is essential to stay abreast of changes in the interest rate market and assess the bank’s preparedness to manage IRRBB. By employing standard IRRBB best practices and guidelines, banks can be better prepared to handle changes in the economic environment and ensure financial stability.
Surya Fintech's IRRBB Add-on module offers banks an effective tool to manage IRRBB. Surya provides banks with the necessary technology to measure risk accurately, identify areas that require further attention, and help in behaviour analysis. Banks need to consider adopting Surya Fintech's software product to ensure they can manage their IRRBB effectively and comply with the RBI guidelines.



Interest rate risk on the banking book (IRRBB) is a growing concern for banks worldwide, and the Reserve Bank of India has recently released guidelines for its management. 

large_Understanding the Importance.webp

medium_Understanding the Importance.webp

small_Understanding the Importance.webp

thumbnail_Understanding the Importance.webp

Understanding the Importance.webp

Understanding the Importance of Managing Interest Rate Risk on Banking Book

In the intricate world of modern banking, where profitability reigns supreme and understanding the nuances of profitability is very much crucial for sustainable growth and strategic decision-making. Amidst the vast array of financial metrics and performance indicators, Funds Transfer Pricing (FTP) emerges as a powerful tool, with a sophisticated internal allocation and measurement mechanism that serves as a guiding light for banks to delve deep into the profitability landscape and identify their best-performing branches with precision and insight.

**Unlocking Profitability Insights with Funds Transfer Pricing (FTP)**

Funds Transfer Pricing (FTP) is a sophisticated mechanism employed by banks and financial institutions to allocate and measure the profitability of funds transferred between different business units and product lines within the organization. At its core, FTP enables banks to assign economic value to the funds they use and generate, facilitating a granular analysis of profitability across various dimensions, including branches, product lines, customer relationships, and even individual accounts.

**Internal Allocation and Measurement**

Central to the concept of Funds Transfer Pricing (FTP) is the notion of internal allocation and measurement. By assigning transfer pricing rates to funds based on their maturity, currency, and risk characteristics, banks and financial institutions can effectively determine the economic value generated by each lending and borrowing unit within the organization. This granular approach enables banks and financial institutions to assess not only revenue generation but also the associated costs and risks, providing a comprehensive view of profitability.

**Measuring Profitability at the Lowest Level**

One of the key strengths of Surya’s Funds Transfer Pricing (FTP) lies in its ability to provide profitability insights at the lowest level of granularity, down to individual accounts. By assigning transfer pricing rates to funds based on their maturity, currency, and risk characteristics, banks and financial institutions can accurately capture the contribution of each account to overall profitability, regardless of its size or complexity.


![Know Your Best Performing Branches SFTP Content.webp](https://server.surya-soft.com/strapi/uploads/Know_Your_Best_Performing_Branches_SFTP_Content_8da2f487c6.webp)


**Unveiling Best Performing Branches**

In the quest to identify best performing branches, Surya’s FTP emerges as a game-changer, offering banks and financial institutions unparalleled visibility into the profitability drivers at play. One of the primary functions of Funds Transfer Pricing (FTP) is to facilitate the pricing of incremental loans, investments, and deposits within the organization. By applying transfer pricing rates that reflect the cost of funds and associated risks, banks and financial institutions can ensure that pricing decisions are aligned with profitability objectives while taking into account factors such as market conditions, liquidity requirements, and credit risk. From these reports, you can evaluate the performance of each branch in terms of both revenue generation and cost efficiency, enabling them to pinpoint areas of strength and opportunities for improvement.

**Enhancing Performance Management**

Armed with insights from Funds Transfer Pricing (FTP), and by comparing the FTP-adjusted profitability of different business units banks can enhance their performance management practices by aligning incentives and resource allocation strategies with branch-level profitability objectives. By incentivizing branches based on their contribution to overall profitability rather than just revenue generation, banks and financial institutions can foster a culture of accountability and drive sustainable growth across the organization.

**Empowering Strategic Decision-Making**

Ultimately, Surya’s Funds Transfer Pricing (FTP) empowers banks and financial institutions to make informed strategic decisions by providing actionable insights into branch performance and profitability dynamics. Whether it's optimizing branch networks, reallocating resources, or refining product offerings, you can leverage FTP-driven analytics to steer the business towards greater profitability and long-term success.

**Conclusion**

In an era defined by heightened competition and evolving customer demands, the ability to accurately measure and manage profitability is more critical than ever for banks and financial institutions. With Surya’s FTP Module, you can unlock a treasure trove of insights into branch performance, enabling them to identify their best-performing branches, optimize resource allocation, and drive sustainable growth in an increasingly complex and dynamic market environment.
In fact, knowing your best performing branches by Surya’s Funds Transfer Pricing Module isn't just about maximizing revenue; it's about understanding the true economic value generated by each branch and leveraging that knowledge to chart a course towards profitability and success.


Funds Transfer Pricing (FTP) is a sophisticated mechanism employed by banks and financial institutions to allocate and measure the profitability of funds transferred between different business units and product lines within the organization. At its core, FTP enables banks to assign economic value to the funds they use and generate, facilitating a granular analysis of profitability across various dimensions, including branches, product lines, customer relationships, and even individual accounts.

medium_Website (4).png

small_Website (4).png

thumbnail_Website (4).png

Website (4).png

Know Your Best Performing Branches by Surya’s Funds Transfer Pricing (FTP) 

Untitled__259___80_px___4_-removebg-preview.png

011-HDFC Bank

Axis_Bank_logo.svg

012-Axis Bank

Indian_Bank-removebg-preview.png

013-Indian Bank

Untitled__259___80_px___5_-removebg-preview.png

015-Saraswat Bank

2560px-RBL_Bank_SVG_Logo.svg-removebg-preview.png

016-RBL Bank

image_2024_07_16T10_46_43_068Z.png

017-Nabard

Untitled__259___80_px___9_-removebg-preview.png

018-NPCI

Untitled__259___80_px___13_-removebg-preview.png

019-Aditya Birla Capital

images.png

021-CSB Bank

Shivalik_Bank-removebg-preview.png

022-Shivalik

IMG_20200519_205000-removebg-preview.png

024-Tata Capital

download__1_-removebg-preview.png

025-AU small finance bank

DCB_Bank-removebg-preview.png

026-DCB Bank

image_2024_07_16T10_49_10_905Z.png

027-Capital Small Finance Bank

image_2024_07_16T10_49_45_866Z.png

028-The Cosmos

image_2024_07_16T14_34_27_524Z.png

029-Brac Bank

DB-LOGO-300.png

030-DOHA Bank

image_2024_07_16T10_51_05_149Z.png

031-Oman Arab Bank

Untitled__259___80_px___11_-removebg-preview.png

032-NBQ

Untitled__259___80_px___8_-removebg-preview.png

033-IBK

download (1).png

034-CUB 

Untitled design (12).png

035-IZB

image_2024_07_16T10_51_59_294Z.png

036-Al Masraf

Untitled__259___80_px___3_-removebg-preview.png

037-FDH

CDH_Investment_Bank.jpg

038-CDH

image_2024_07_16T10_52_59_353Z.png

040-Bank Of Kigali

image_2024_07_16T10_53_44_754Z.png

041-Afrexim Bank

image_2024_07_16T10_53_57_273Z.png

042-Mau Bank

image_2024_07_16T10_54_20_962Z.png

043-Utkarsh Small Finance Bank

Untitled__259___80_px___12_-removebg-preview.png

044-First Capital Bank

Karur_Vysya_Bank.svg

045-KARUR VYSYA BANK

download (2).png

046-Belstar Bank

Untitled__259___80_px___10_-removebg-preview.png

047-Edelweiss

Untitled__259___80_px___2_-removebg-preview.png

048-NKGSB

Zanaco Logo_Client.png

053-ZANACO

Know more about the valued clientele from across industries that we service with our comprehensive solutions.

CLIENTS SERVED

Axis Bank is one of the three largest private sector banks in India, providing services to customers from SME, Agriculture, Retail Business Segment and Large & Mid Corporates, the bank has a growing asset size of above 100 Billion USD. The Bank has a large footprint of around 2400 domestic branches. The overseas operations of the Bank are spread over seven international offices with branches at Singapore, Hong Kong, DIFC (Dubai International Financial Centre), Colombo and Shanghai and representative offices at Dubai and Abu Dhabi.

# Implementation of BALM
**Background**
After opting for a new core banking solution, Axis Bank was looking for an Asset Liability Management solution to manage and mitigate their financial risk as per the ALM guidelines from Reserve bank of India.

### Challenges
Bank didn’t have a system in place for ALM and all the reports were generated manually.

- The main challenge was to retrieve large volumes of data from Core banking and Treasury systems (Finacle Core, Finacle Treasury and FinnOne)
- The time taken to extract data and generate report manually was too long
- Segregation of ALM products into multiple sub products was not easy due to complex mapping between ALM products and General ledger accounts
- It was difficult for bank to meet the increased demand of additional reports from Regulatory authorities
- Lack of data and tools for fine tuning the Asset Liability Management system

### Solution
Axis chose Surya’s BALM as a best fit solution for asset liability management including ability for regulatory compliance and ease of use and maintenance. BALM resolved the main concern of the bank for centralization for effective and timely assessment of risk.

### A Brief on BALM implementation
BALM was implemented in Axis Bank in 2002. The project was completed in a span of 3 months. Application has been upgraded to newer version twice in last 10 years in the bank. The minor upgrades are provided periodically whenever there is demand from Central bank for new reports.

### BALM at Overseas branches
BALM is also implemented at five overseas operations of the Bank in the year 2013 – 14

- Axis Bank – Srilanka
- Axis Bank – Dubai
- Axis Bank – Singapore
- Axis Bank – Hong Kong
- Axis Bank – Shangai
The implementation of overseas operations was quick and completed in a span of 3 Months.

A BALM consolidator application is also implemented in Axis Bank India to give a consolidated view of Domestic as well as overseas ALM reports.

### Results
Surya’s solution has given Axis Bank with detailed analysis at consolidated and granular level for better decision making especially in time constrained activities.

- BALM handles large volumes of data each day with quick transformation and calculation throughput
- The entire process of data upload and report generation takes less than 4 hours in domestic operation
- For Overseas operations, data interface execution takes less than 1 hour
- With a successful interface mapping between BALM and General Ledger codes, bank is able to create new ALM products and bifurcate the existing products into multiple ALM products on its own
- For entire Term loan portfolio of bank, Loan cashflows are generated in BALM interface for segregating outstanding loans into appropriate buckets
- With consolidated BALM application in place, bank is able to get a consolidated view of domestic and overseas operations’ ALM position. The consolidator not just provides basic ALM reports but also gives all other analytics of Liquidity and Interest Rate risk at consolidated level
- The consolidation of domestic and overseas operation takes less than 10 minutes. Consolidation is done after executing individual operations
- Apart from regulatory reports, Bank is able to analyze and monitor Net Interest Income, Duration, Market Value of Equity, Several balance sheet Ratios etc.
- Compliance with regulatory norms has been enhanced with increased accuracy and consistency of data and assumptions

For more information please write to sales@surya-soft.com

Axis Bank is one of the three largest private sector banks in India, providing services to customers from SME, Agriculture, Retail Business Segment and Large & Mid Corporates, the bank has a growing asset size of above 100 Billion USD.

Client Image.jpg

Implementation of BALM - Bank Asset Liability Management at Axis Bank

NBQ was using Microsoft excel for all its ALM needs but the excel based process and reporting was not sufficient to meet their management and regulatory requirements, thus NBQ sought to implement an integrated ALM solution.

**Problems Faced**

Bank didn’t have a system in place for ALM and all the reports were generated using excel by collecting data from various source systems manually. Since it was done manually there were quite a few challenges, like:
- Time taken to compile data and generate regulatory reports was very high
- ‘What if’ scenarios could not be modelled
- Computation of various Balance Sheet Ratios, setting up and monitoring of risk tolerance level and threshold limits on an on-going basis was tedious.
- It was not possible to prepare requisite Gap Reports on daily basis

**Surya's Approach**

The National Bank of Umm Al Quwain (NBQ) faced a significant challenge in generating reports using Excel, as it required collecting data manually from various source systems. Recognizing the bank's needs and the difficulties they were encountering, Surya stepped in to offer a tailored ALM solution. This powerful tool enabled NBQ to generate reports quickly and efficiently, greatly reducing the time and effort required for this crucial task. As a result, NBQ was able to streamline its operations, optimize its reporting capabilities, and ultimately enhance its overall performance. Below are the  reports which are used by the Bank:
• Liquidity Risk Measurement
• Interest Risk Measurement
• Scenario Analysis
• Ratio Builder
• Ratio & Trend Analysis
• MIS & Regulatory Reports

**Benefits of Implementing Surya's ALM**

- BALM has enabled interface with all data sources thus reducing significantly the time required to upload, aggregate and validate data.
- Liquidity & interest risk analytical are available every day before start of the Business.
- CXO’s are now enabled to precisely analyze the impact of a wide variety of business decisions on the bank’s balance sheet.
- Users are not only able to measure changes in Net Interest Income & Margin with changes in macro-economic factors but can also forecast the NII and Margin.
- Scenario Analysis helps to simulate various ‘what if’ situations by applying multiple transformation functions on native and scenario data.
- Key Ratio Builder enables users to create & monitor tolerance limits of multiple ratios.
- Automation of MIS reports for both management and statutory reporting
- Compliance with regulatory norms has been enhanced with increased accuracy and consistency of data and assumptions

NBQ is a Public Shareholding Company incorporated in Umm Al Quwain. The bank is engaged in providing retail and corporate banking services through a network of 11 branches in U.A.E. The Bank carries out Islamic banking operations through Islamic Banking window established in 2005 across its branch network.

Role of Asset LMS Content.jpg

Implementation of Surya Asset Liability Management (BALM) Solution at National Bank of Umm Al Quwain (NBQ)

# Implementation of BALM
**Background**

Doha bank was in search for an ALM solutions with flexibility in defining ALM Products which can handle multiple country operations. One of the main concerns for the bank was interface execution time. Because of banks earlier experience of unsuccessful ALM implementation, bank requested Surya to execute a proof of concept (POC) before finalizing Surya’s System. Surya team executed POC in 2 weeks and the project was awarded to Surya.

### Challenges
Bank didn’t have a system in place for ALM and all the reports were generated manually by collecting data from various source systems manually.

- Collection of source data from CBS and treasury system to analysis risk and identifying maturity profile to bucket source data
- Time taken to compile data and generate statutory and other management reporting for individual countries and at group level
- Time taken to generate BASEL III reports for reporting requirement of consolidated currency, significant currency for different countries’ operations as per respective central bank guidelines.

#### Solution
Surya has implemented its ALM solution, BALM at Doha bank at its individual geographic operations and consolidated operation. BASEL III module of the application automated the statutory reporting requirement. This project was executed in the span of 2 months.

### A Brief on BALM implementation
BALM implementation was started in the month of June 2014 and was completed for its Doha, Kuwait, UAE and consolidated operations within 2.5 months. Implementation of BASEL III module for Qatar central bank reporting was implemented in the span of 1 month. Surya implemented BASEL III for Kuwait after Kuwait central bank finalized the guidelines in March 2015.


### Results
- Liquidity and interest risk analytical functions for individual country operations and at group level
- Automation of MIS reports for both management and statutory reporting
-  Generation of BASEL III reports based on each country central bank directions with audit functionality of drill down
- Entire interface processing from data generation is automated to run daily. Entire data processing interface processing takes less than an hour in contrast to previous execution time of more than 24 hours.
- Automated alerts are provided to alert users on status of execution of interfaces
- Tools are delivered to users for the reconciliation of BALM report values with source system
- Tools are provided to users to maintain the interface configuration parameters
- Surya has delivered custom MIS reports which allows bank to analyse country wise, sector wise exposure analysis


Doha bank started its operations in India in March 2015. Bank is planning for BALM implementation in Indian operation after completing implementation of core banking solution.

Incorporated in 1978, Doha Bank is one of the largest commercial banks in the State of Qatar.  Doha Bank serves individuals, corporate and institutional clients across Qatar and internationally. The Bank has total asset of USD 20.36 billion with its loan portfolio of USD 13.96 billion and deposit portfolio of USD 12.42 billion. Doha bank has banking operations in Kuwait, UAE and recently started its operations in India.

DB-Tower-2020.jpg

Implementation of Asset Liability Management (BALM) Solution at DOHA Bank

First Discount House (FDH) is a fully owned subsidiary of FDH Financial Holdings Limited and was licensed as a discount house by the Reserve Bank of Malawi on 20 July 2001. Operational since April 2002, the bank has grown into one of the strongest and most reliable Financial Services Houses in the country. 

# Implementation of CallRpt

### Background

Banks in Malawi are mandated to follow Basel II frame work as per Reserve Bank of Malawi (RBM) guidelines. Banks are requested to identify Risk weighted assets based on credit risk, operational risk, liquidity risk, interest rate risk and market risk. Based on this, capital requirement for the bank is identified. RBM also requested all the banks to submit a set of reports (Call Reports) which includes different reporting schedules for Capital, Credit risk, operational Risk, Market risk, Liquidity risk, Interest rate risk and other financial information to central bank. In total of there are around 48 reports to be submitted by the banks to central bank.

#### Challenges

Preparation of the reports as per the central bank reporting format was a challenge for the bank due to complexity of data requirement. Some of the data required were not captured in core banking or treasury systems.

Manual calculation of risk, using Basel II rules was challenging, bank used to spend weeks to calculate the risk and compile central bank reports.

#### Solution

Surya has implemented CapAd Solution (Capital Adequacy) and has used Risk Reporting Package (RRP) to support Basel II risk calculation and central bank reporting requirement. Flexible rule definition module of CARE, helped to setup Malawi specific BASEL II rules with lesser effort and the project was completed within 3 months.

### A Brief on CallRpt implementation

- CapAd applications risk calculation rules were customized as per the BASEL II rules of Malawi.
- CapAd application is interfaced with Surya’s ALM solution, BALM which was implemented earlier to identify liquidity    and interest risk.
- Risk report package allowed Surya to configure complex call reporting requirements of the bank. Due to unavailability of customer rating information in the core banking system, Surya interfaced CapAd application with SMERATE, Surya’s customer rating application.

### Results


- Generation of reports with a click of a button, with options to maintain and extract history reports from the system
- All Call reports are downloaded into a single MS Excel with each report in different work sheets as required by RBM. Downloaded reports are compatible for uploading into RBM website without any manual intervention.
- System is interfaced with core banking system (T24). An entry/upload system also delivered to capture manual data classification.
- Interfaced system with BALM for liquidity risk and interest rate risk
- Interfaced system with customer rating system (SME Rate) to get internal rating of the customer
- Entire processing of call report interface, rules and report batches are completed within 45 minutes
- Bank can now measure its risk weighted assets in better way which helping bank with better accurate classification of Tier I and Tier II Capital
For more information please write to sales@surya-soft.com

First Discount House (FDH) is a fully owned subsidiary of FDH Financial Holdings Limited and was licensed as a discount house by the Reserve Bank of Malawi on 20 July 2001.

Navigating Financial Storms Content.webp

Implementation of Capital Adequacy and callRpt at FDH Bank, Malawi

First Discount House (FDH) is a wholly owned subsidiary of FDH Financial Holdings Limited and was licensed as a discount house by the Reserve Bank of Malawi on 20 July 2001. First Discount House is currently the only Discount House in Malawi. Operational since April 2002, the company has grown into one of the strongest and most reliable Financial Services Houses in the country. Bank has an asset size of around 112 million USD.

# Implementation of SMERATE
**Background**
Malawi doesn’t have any external rating agency which provides customer rating to banks. Basel II implementation at Malawi, required banks to have an internal rating of its customers. Bank also wanted to bring an efficient loan proposal sanction process which will cater the process from proposal request, to rating till approval. This will bring down operational risk involved in proposal sanction process.

### Challenges
Developing a rating model for different types of customers is challenging due to unavailability of data for various type of customers. Manual processing and sanction of proposal usually takes many days as the document has to flow from remote branches to credit officer in the head office. Customer ratings were done manually and were not uniformly maintained for same type of customers

### Solution
Customer scoring model (SMERATE) of Surya allows customer rating based on both qualitative and quantitative parameters. System allows to build multiple scoring models in the system and different types of customers can be rated using the different models. System can be setup to have credit work flow during the sanctions of credit proposals.

### A Brief on SMERATE implementation
Surya implemented SMERATE along with its work flow engine in FDH. Capturing of customer rating input parameters are automated and are fed into the system when proposals are received. In addition to entry of customer, system also provided facility for the branches to upload original documents submitted by the customers and provide easy audit facility by credit offers.

Surya also helped bank to do one time rating of all its existing customers through a migration process during implementation.

### Results
- System brought efficiency in processing of proposals of both existing customers and new customers.
- Customer rating mechanism is standardized and hence brings uniformity and allows bank to take better decision
- All the supporting document for a sanctions are upload against the proposal and auditing became hassle free.
- Better control on the sanctions, as high volume sanctions are configured to have multi-level approval in the workflow.

For more information please write to sales@surya-soft.com

First Discount House (FDH) is a wholly owned subsidiary of FDH Financial Holdings Limited and was licensed as a discount house by the Reserve Bank of Malawi on 20 July 2001. First Discount House is currently the only Discount House in Malawi.

download (1).jpg

Implementation of SMERATE at FDH Bank, Malawi

Indo Zambia Bank (IZB) is a leading financial services provider in Zambia, providing retail banking services to the communities it serves. The bank was founded in on 19 October 1984 by the Government of Zambia, and three state owned Indian banks Bank of Baroda, Bank of India and Central Bank of India IZB was using Microsoft excel for all its ALM needs but the excel based process and reporting was not sufficient to meet their management and regulatory requirements, thus IZB sought to implement an integrated ALM solution. As part of the selection process multiple ALM solutions were evaluated and BALM, Surya’s ALM solution, was shortlisted by IZB for implementation. 

**The Problems:**
- Bank didn’t have a system in place for ALM and all the reports were generated using excel by collecting data from various source systems manually. Since it was done manually there were quite a number of challenges, like:
- Collection of source data from CBS and treasury system to analysis risk and identifying maturity profile to bucket source data 
- Time taken to compile data and generate regulatory & other management reporting was very high
- It was not possible to prepare requisite Gap Reports on daily basis
- ‘What if’ scenarios could not be modelled
- As most of the reports were being prepared manually, there was a high possibility of human error, and the time taken to generate these reports was unduly long. 
- All these challenges and problems made monitoring liquidity and interest rate risk an up-hill task.




**Solution Proposed**
Surya’s proposed to implement its Bank Asset and Liability Management (BALM) application, a comprehensive solution which addresses both regulatory & management 
reporting requirements. The solution is highly parametrized & has host of features like:

### **KEY DIFFERENTIATORS**

**DATA HARMONIZER**                                                                                                                                                                              
At the core of BALM solution is the Data Harmonizer platform, which provides the key handshake with external host systems. Data Harmonizer ensures data extraction, reconciliation, cash flow generation, dynamic data addition for scenario creation & finally the aggregation.

**IMPLEMENTATION APPROACH**                                                                                                                                                
Surya’s customer centric approach and agile implementation methodology ensured successful delivery and resulted in project go-live a month ahead of schedule. The entire implementation team had good knowledge of domain and business requirements.


- Surya ALM Suite addressed both regulatory & management reporting requirements. The solution being highly parametrized and with host of friendly features like ratio builder, which enabled users to create their own control mechanisms, analysis etc.
- Surya’s Data Harmonizer Platform being extremely fast engine reduced the processing time dramatically while running on commodity hardware. This enabled the bank to submit reports to regulators on T+1 basis while bringing down the total project spends.
- Automation of MIS reports for both management and statutory reporting
- Entire interface processing from data generation is automated to run daily. Entire data processing interface processing takes less than an hour.
- Surya’s products being shipped with a Run Control system that makes running batch jobs very easy. This has helped reduce IT involvement, while maintaining a high quality of service to users.
- Tools are delivered to users for the reconciliation of BALM report values with source system.

Indo Zambia Bank (IZB) was finding it difficult to meet their management and regulatory requirements with their existing manual process that allowed the risk of human error and led to excessive expenditure of time. Learn how our ALM solutions made all the difference.


Bank Reconciliation System.webp

ALM Suite – Meeting Management & Regulatory Requirements of IZB Bank

Customer Stories | Surya Fintech

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud

Surya's operational risk product offers a comprehensive solution to manage operational risks in financial institutions. It includes modules for Incident Register, Risk & Control Self-Assessment, Key Risk Indicator and Issues & Action Management

BV 1.png

Incident Register

KC 2.png

Risk & Control Self-Assessment (RCSA)

KC 3.png

Control Testing

KC 4.png

Key Risk Indicators (KRIs)

KC 5.png

Issues & Action Plan

KC 1.png

Centralized capture and analysis of operational loss events, ICT incidents, Near-Misses etc.

BV 2.png

Structured assessment of inherent, residual risk, and control effectiveness across risk categories including operational, ICT etc.

BV 3.png

Continuous monitoring through KRIs and thresholds

BV 4.png

Timely identification, remediation, and closure of risk issues

large_Operational Risk.webp

medium_Operational Risk.webp

small_Operational Risk.webp

thumbnail_Operational Risk.webp

Operational Risk.webp

Governance, Risk & Compliance (GRC) is an integrated framework that enables financial institutions to operate responsibly, manage uncertainty, and comply with regulatory and internal standards. Governance defines policies, structures, and accountability. Risk Management identifies, measures, and mitigates enterprise and operational risks. Compliance ensures adherence to regulatory requirements and internal controls. By integrating these disciplines, GRC provides a single source of truth for risk and compliance management—enabling informed decision-making, reduced risk exposure, and improved regulatory readiness.

Governance, Risk & Compliance

Operational Risk Management

Contact Us

Download

Reach out to know more

One of the Best in Class solution provider for Financial Risk Management and Balance Sheet Management Suite.

About

Leadership

Journey

Clients

Insights

Customer Stories

Resources

White Papers

Blog

Careers

Culture

Jobs

FinTech

Digital

Contact

Sitemap

Cookie Policy

FAQ