3.2.2 Use Head Office Exchange Rate
This topic provides the information on Use Head Office Exchange Rate.
The ‘Use Head Office Exchange Rate’ option enables branches to apply the exchange rates set and maintained by the bank’s head office, rather than using locally maintained branch specific rates for currency conversion operations.
Purpose and Business Use Case:
- Standardization: Ensures consistency and uniformity in all foreign currency conversions across the bank’s network, especially important for multi-branch or international banks.
- Centralized Control: The head office can centrally update and manage exchange rates. Subsidiaries and branches will use these rates for transactions like entity utilizations, and other cross currency calculations.
- Compliance and Audit Trail: Facilitates easier compliance with regulatory or internal policy requirements concerning rate usage and simplifies audit tracking since all branches are referencing the same centrally maintained rates.
Working:
- When the flag Use Head Office Exchange Rate in Create
External Branch Parameters maintenance screen is checked at branch
level, the rate pickup will refer the flag and return the appropriate rate as
below:
- If the Use Head Office Exchange Rate flag in Create External Branch Parameters maintenance screen is enabled at a branch level, the exchange rate will be picked from the Head office branch.
- If the Use Head Office Exchange Rate flag in Create External Branch Parameters maintenance screen is not enabled at a branch level, the exchange rate will be picked from the current branch in which the transaction is posted.
Parent topic: Specific Cross Currency Enhancements