3.1 Definitions

This topic describes about Definitions.

There are 3 parts to it as below.
  1. Set up exposure policies:
    As part of overall credit policy management, you evaluate sectors and industries within the policy and allocate funds (appetite) to them based on the capital available in the bank.
    • For example, user can also set up the allocations towards Fund Based and Non-Fund Based limits against the given sector or industry(say, Manufacturing or Financial sectors).

    For more information, refer to Oracle Banking Credit Facility Process Management Policy Document.

  2. Create Exposure Code and Hierarchies
    You then define exposure codes that are either atomic or hierarchical.
    • Atomic Exposure Codes: These represent exposures without associated hierarchies, such as currency exposures like 'USD' or 'EUR'.
    • Hierarchical Exposure Codes: These represent exposures with associated hierarchies. You can utilize standardized frameworks like the Global Industry Classification Standard (GICS) (for example, Energy [10], Healthcare [35], Financials [40], etc.), which are provided out of the box. Alternatively, you can create custom structures tailored to your organization's needs, such as "Manufacturing – North America".

    For more information, refer to Maintaining Custom Exposures and New Exposures Hierarchy.

  3. Define Limits and Parameters:

    The final step in defining an exposure involves assigning specific parameters to each exposure. These parameters include setting a precise limit, determining the exposure type (such as revolving or non-revolving), and specifying expiry dates. This process ensures that each exposure is accurately characterized and managed within the system.

    For more information, refer to Configure Exposure Limits and Maintain GICS Exposures.

Parent topic: Exposure Usage in OBELM