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
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.
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.
Surya has implemented CARE (capital Adequacy and Risk Evaluation) 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
- CARE applications risk calculation rules were customized as per the BASEL II rules of Malawi.
- CARE 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 CARE application with SMERate, Surya’s customer rating application.
- 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
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