Liquidity reporting in India – Time for a strategic approach

Inside View | Liquidity

July 12, 2016 – By Sumit Basu, Product Manager (APAC)

Banks in India are increasingly facing complex challenges in terms of compliance, operations and analysis.  Challenges however in data management, slow change implementation and system performance are endemic.  The limitations of a tactical approach, spreadsheet-based or otherwise, will be exposed even further over the coming months as banks prepare for the more intensive reporting regime.  This includes a daily Liquidity Coverage Ratio (LCR) calculation and the Net Stable Funding Ratio (NSFR) in 2018.


Gone are the times when banks can copy and paste spreadsheets or run scripts to extract data for scenario simulations and report generation. The significant increase in data volumes and the additional complexity that comes with daily reporting all point to automation.  Technology should therefore take over as much as possible of the disclosure preparation i.e. putting the number in the box, allowing regulatory specialists to transition to a fuller focus on analysing and making sense of numbers to be submitted.  
 
The “reactive” approach taken by many firms to each regulatory iteration has proven to be costly, repetitive and ineffective:  too many resources and too much time spent on data preparation and aggregation.  It’s time for banks to start taking a strategic approach, to look towards a comprehensive solutions partner who is able to respond to the full Reserve Bank of India (RBI) data, calculation and disclosure requirements.  When looking at a LCR solution, it has become increasingly important to carry out multiple data management and analytics functions in addition to fulfilling local reporting requirements.  Leveraging on existing systems and processes to consolidate source data of varying levels of granularity without conversion will save your bank both time and money. The ability to enrich existing data, supplement and capture what is needed to quickly provide full data coverage including cash-flow generation will indubitably help you achieve greater efficiencies as a firm.
 
In this respect, AxiomSL is increasingly accepted as the provider of choice to support financial institutions’ responses to ever-changing regulatory requirements.  A prime example of our capability to quickly respond to change is the LCR solution for RBI. AxiomSL first delivered its LCR solution for RBI in August 2014, just two months after the publication of the RBI Basel III Framework on Liquidity Standards. It was recently updated and delivered to our Indian clients in response to RBI’s new requirements in just one month.  Our RBI Liquidity solution includes calculations and monitoring tools covering BLR 1-7 at entity and consolidated levels as well as a presentation layer which can both render an XBRL taxonomy or be configured by the user to automatically generate XBRL instances.