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 60 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
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.
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
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.
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
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