TCCP - LIMIT

LIMIT Question and Answers

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Question: A customer's Limit has to be temporarily withdrawn because of risk worries. How can this be achieved ?

Answer: AVAILABLE.MARKER field in LIMIT should be set as "N"

Question: When is the override "No match with LIMIT.PARAMETER" generated ?

Answer: When Limit reference on the contract is not in accordance with that set in LIMIT.PARAMETER table

Question: How can we stop a customer of a group from enjoying a Limit granted to the Liability customer when limits are NOT set at individual customer level?

Answer: By using RESTRICTED.CUST field in the limit granted to Liability customer

Question: A Bank has defined two limit products 100 and 200 of LIMIT.REFERENCE as risks associated with Loans of Category code 21051 in LIMIT.PARAMETER table. When such a loan is input, which of these risk products would be associated if the Bank has not opted for reporting multiple limit products?

Answer: The first LIMIT.REFERENCE record indicated in LIMIT.PARAMETER for Category code 21051

Question: Which of the following is a valid Id for LIMIT.REFERENCE to define a GLOBAL product ?

Answer: 10000

Question: How many levels of sub products can be defined through LIMIT.REFERENCE?

Answer: Maximum of 10 levels

Question: Which exchange rate is used for revaluation of Limits?

Answer: Rate setup in LIMIT.REFERENCE. Default will be Midrate if no rate is set.

Question: How is a Customer removed from a Customer Liability group ?

Answer: By using LIMIT.CHANGE

Question: In LIMIT.REFERENCE, which could be defined as a valid sub product of a product 4000?

Answer: 4010

Question: Which of the following could be defined as a sub-product at Level 2 in LIMIT.REFERENCE ?

Answer: 4011

Question: What is a FIXED Limit ?

Answer: A Limit with a fixed value, which does not change with change in value of Security.

Question: Where is a risk product linked to a business product in T24?

Answer: LIMIT.PARAMETER

Question: A customer has two accounts enjoying a single limit of USD 50,000. Bank wants to offset credit balance of USD 20,000 of the first account against a possible debit balance on the second account. What is the maximum debit balance that could be allowed in second account?

Answer: USD 70,000

Question: A Customer is engaged in constructing bridges. A Bank wants to give three limits to this customer to cover three bridge construction projects and direct its lending accordingly. Is this possible in T24?

Answer: Yes. Upto 99 different limits can be given to the same customer for the same limit product

Question: Which of the following can be amended using LIMIT.CHANGE?

Answer: Currency of a Limit line

Question: A Bank wants to schedule reduction of USD 50,000 every month to a Limit sanctioned to one of its Customers. How can this be done?

Answer: By using Repay related fields in the Limit sanctioned

Question: How can we cancel a limit that is not needed any more?

Answer: Expiry date can be set to current date and mark available marker as 'No'

Question: If LIMIT.REFERENCE for FX is 300 how should the first FX limit record be defined for customer 77777 who is part of the liability group of customer 56578 ?

Answer: 56578.300.01.77777

Question: What is the purpose of the field INTERNAL.AMOUNT in a LIMIT record?

Answer: Specifies the maximum exposure that the Bank is prepared to take under a limit line.

Question: Customer 100126 has a global product line of 100126.0010000.01. What would be the correct sub product limit for sub-product 117?

Answer: 100126.0010117.01

Question: In LIMIT.REFERENCE table, a product has been classified as DP in FX.OR.TIME.BAND field. Will this trigger any overrides if a Customer has not been sanctioned due limits for this product?

Answer: No. This is only for information purpose and overrides will not be triggered

Question: In the LIMIT.REFERENCE table, the FX.OR.TIME.BAND field has been left blank for a Product. Which of the following statements is true?

Answer: This is a non-forex or non-time banded product

Question: A Variable limit of USD 25,000 is set to need 200% of underlying collateral. How much of this limit could be used when the collateral value is (a) USD 10,000 and (b) USD 60,000

Answer: (a) USD 5,000 and (b) USD 25,000

Question: What is the purpose of using contingent accounts in the case of Limits?

Answer: Utilised or Unutilised portion of a limit can be shadowed using accounting entries on a contingent account that directs calculated interest and charges to a non-contingent of customer

Question: A Bank wants to set LIMIT.PERCENTAGE field as 110% in LIMIT.REFERENCE for a loan risk product. Is this possible?

Answer: No. Maximum value allowed is only 100. This should be at the lowest level of Product and sub-products.

Question: A 400 million limit is time banded into 250M maturing within 3 months, 100M within 6 months and 50M within 12 months. The 3 months and 12 months portions have been fully utilised. Into which other time band can the 6 months portion be used?

Answer: Into 3 months band

Question: While defining Risk product 100 in LIMIT.REFERENCE, a Bank has not defined any value in GET.SUB.ALLOC field . Later it wants to sub allocate USD 50,000 from the limit of Customer A for product 100 to limit of Customer B for product 200. Will this be allowed?

Answer: Override will be generated. On due approval, sub allocation will happen

Question: A Bank has not set Limit for Loan product for its Customer. When it gives loans, T24 generates override to this effect and Bank duly approves the override. At what level will the System generated limit be created?

Answer: At Product and Sub product.

Question: A Bank has set 10% as underlying risks for Derivative products in LIMIT.PERCENTAGE field in LIMIT.REFERENCE table. Due to market uncertainties, it would now like to revise this rule as 20%. How can this be done?

Answer: Can change this through LIMIT.CHANGE application

Question: A Bank wants to take charges on the limit amount utilised by its customers. Is this possible?

Answer: The utilised / unutilised portion of a limit can be shadowed using a Contingent account, charges and interest can be calculated

Question: How can you link limit amounts into the Asset and Liability consolidation reporting?

Answer: Set the LIMIT.TO.TAKE field of CONSOLIDATE.COND table

Question: When limit is in GBP and utilisation is in EUR, how is revaluation done? USD is local currency

Answer: Depending on setting in LIMIT.PARAMETER, either mid rate is used or rate combination mentioned in LIMIT.REFERENCE is used

Question: When are currency exposure reports produced?

Answer: Produced as per choice indicated in LIMIT.PARAMETER

Question: All Credit Risk Facility Granted by the Bank are set to expire at the Month End. For Some of the Limits Bank wants to extend the grant by a maximum period of 7 days. How is this possible to Set in Limits?

Answer: It can be extended by entering a date in ADM.EXTENSION.DATE field in LIMIT application

Question: A Bank has not set limit for loans for its Customer. When it gives loans, T24 generates override to this effect and Bank duly approves the override. In which currency would the System generated limit be created?

Answer: Currency defined in LIMIT.PARAMETER

Question: A Bank has not set limit for Account overdrafts for its Customer. When it allows to overdraw the Account , T24 generates override to this effect and Bank duly approves the override. In which currency would the System generated limit be created?

Answer: Default limit will not be created by System for unauthorised overdrafts

Question: While sanctioning Limit to a Customer for loans, a Bank wants to allow USD and GBP and restrict EUR from using SGD limits. Is this possible?

Answer: Either allowed currencies or restricted currencies can be indicated and not both

Question: A customer has several LIMITs which can be used to cover LD deals at the clients discretion. Instead of T24 defaulting the first line that matches, Bank wants its user to select from a list of valid Limits for the deal and client during input. How can this be achieved in T24 ?

Answer: Yes, the FILTER field and it's related fields in LIMIT.PARAMETER can be set to check for valid LIMIT records to match the deals being entered and show only those that match as possible inputs

Question: Can a bank add their own criteria to change the filter process that provides lists of LIMIT records to be used by a deal?

Answer: Yes, the FILTER field allows the use of field names from LIMIT and matching criteria for those fields can be used

Question: Market regulations are increasingly looking at currency risk based on geographic regions. Instead of the bank entering a list of CURRENCY records every time can they create groupings to be used within LIMITs?

Answer: Yes, LIMIT.RANGE can be used to create suitable groupings

Question: A user tries to input a value in field ADM.EXTENSION.DATE in LIMIT application, but is not allowed. What could be the reason for this?

Answer: The field ADM.EXTENSION.DAYS in LIMIT.PARAMETER has been left blank

Question: At setup the LIMIT.PARAMETER field has a value of 31 entered in the field ADM.EXTENSION.DAYS. What effect does this have on the LIMIT?

Answer: This prevents LIMITs from having an extension of expiry date greater than 31 days

Question: When Cross limit structure on a LIMIT has been authorised which of the following will automatically happen?

Answer: The sub product limit records will be produced in INAU status and the LIMITS.MODIFIED field in LIMIT for the product will be updated with the sub product limit ids

Question: If the id of LIMIT.CROSS.PARAMETER is 5000 and the number in the field TOP.CROSS.REF is 5029, how many cross limits will be allowed for this product?

Answer: 29

Question: A Bank desires that while inputting a transaction for a customer in T24, the user should be provided with a list of existing multiple limit references of the customer. Which field in LIMIT.PARAMETER can be used to enable this feature?

Answer: REPORT.MULTIPLE

Question: A Bank desires to put through a transaction that has its value date as 31/10/09. The Field LAST.DRAW.DATE in LIMIT application for this transaction is 15/10/2009. How will T24 handle this?

Answer: An override will be generated at the time of committing the contract

Question: Which of the following statements is true with regard to Field TOP.CROSS.REF in LIMIT.CROSS.PARAM ?

Answer: It specifies the maximum value of a CROSS Limit Reference that could be used under the PRODUCT. Limit Reference specified in the Id

Question: Which application needs to be set first to create a Cross Limit?

Answer: LIMIT.CROSS.PARAM

Question: When a CROSS Limit Reference is being estbalished in LIMIT.REFERENCE, the field CROSS.LIMIT is automatically updated with which value?

Answer: PROD

Question: A Bank has set AUTO.RESTORE.ALLOC field to 'N' in LIMIT.SUB.ALLOC application.What effect will this have on the sub allocation?

Answer: The sub-allocation will be allowed until the expiry or until the outstandings are reduced on the receiving Limit so that returning the sub-allocation does not create an excess on the receiving Limit

Question: The field EXPIRY.DATE in the application LIMIT.SUB.ALLOC has been entered with a date that is after the EXPIRY.DATE of the LIMIT, which is being transfered from. What will T24 do?

Answer: T24 will throw error as the Sub Allocation Expiry is Greater then the Limit Expiry.

Question: A Limit is created for a customer in a shared customer set up. Limit currency is USD. A Deal is input for the customer in a Company with Deal currency as GBP which is the local currency. From which company will T24 pick the exchange rates?

Answer: From Customer Company

Question: A Bank wants a setup wherein credit risk monitoring percentages for contracts maturing within 5 years should be 100% and for contracts maturing > 5 years should be 90%. Can this be set in T24?

Answer: Can be set in LIMIT.REFERENCE application

Question: When does T24 do the Currency rate Revaluation of Limits?

Answer: During COB only

Question: A Bank has granted an overdraft credit Limit of 10M for a group concern, wherein customer A (100200) is liable for customer B (100300). Bank wants to Limit customer A to only 7M. How can this be set in T24?

Answer: By setting Limit amount in 100200.100.01.100200

Question: A customer has 3 Accounts which are linked to one Overdraft Limit and he wants that the overdraft amount be calculated based on net total balance of all 3 accounts. How can this be set?

Answer: It needs to be set in respective Account and Limit

Question: In which company will system defaulted Limits be created?

Answer: In the Customer Company

Question: A Customer has been set an Overdraft Limit of 10M at Global level. A user at Bank wants to check how much is utilised. Which is the correct process to get this information?

Answer: By running LIAB enquiry

Question: A customer has a non revolving Loan Limit, a revolving Overdraft and a Forex Limit. These limits have to be monitored for exposure at Global Level. How can this be set in T24?

Answer: Setting 2 global limits, one to monitor the Loan and the other to monitor the rest

Question: A Customer B (100300) has a Sub product Loan Limit. This customer is in a Liability group in which Customer A (100200) is the main customer. What will be the parent record for limit 100200.2010.01.100300?

Answer: 100200.2000.01.100300

Question: What is the purpose of LINK.TO.LIMIT setup in ACCOUNT application?

Answer: To define debit interest rates depending on overdraft Limit amount

Question: A Loan Limit is set for a customer for 10M. A Loan is input for 8M with a Value date of 10 days Future. The Limit is set to sweep the unutilised portion for interest charging purpose. What will be the Amount swept on the date of input of Loan?

Answer: 2M

Question: For a Customer, a Bank wants to automatically increase the Limit amount of a product on a monthly basis by 20,000 for six months. Is this possible to be effected in T24 Limit ?

Answer: Yes, it is possible to increase the limit amount automatically by appropriate input in fields INCREASING.TYPE, INCREASE.FREQ, INCREASE.AMOUNT and INCR.END.DATE in Limit application

Question: A limit is set up for 2 years from Jan 5, 2010. However, Bank wants the Customer to utilize the limit amount before Mar 5, 2010. How can this be achieved in T24 Limit ?

Answer: Possible to achieve with appropriate input in field LAST.DRAW.DATE in LIMIT application

Question: A Bank wants to enquire on contracts which have hit a particular limit product for a Customer. Is this possible in T24 Limits?

Answer: It is possible to view all contracts that hit a limit product using the enquiry LIM.TXN

Question: Customer A is the liability customer of Customer B. Is it possible to change the Customer Liability of B to himself from Customer A online ?

Answer: It is possible to change the customer liability of Customer B from A to himself online using LIMIT.CHANGE application

Question: Customer A (123456) is the liability Customer of Customer B (654321) and Customer C (123123). A Bank desires to set up an overall revolving overdraft Limit (assume the limit reference is 100) of USD 300,000 for the entire group. However, it would like to set the maximum limit of 200,000 each for Customers A, B and C. In that case, what will be limit id for setting a limit of 200,000 for Customer A ?

Answer: 123456.100.1.123456

Question: A Bank desires to have a local reference field as part of Limit product set up in LIMIT.PARAMETER. Is this possible in T24?

Answer: Yes, it is possible to have local reference fields as part of Limit product set up in LIMIT.PARAMETER

Question: Which of the following statetments is correct with respect to LIMIT.CHANGE application?

Answer: Using LIMIT.CHANGE, it is possible to change the Currency of existing Limit line.

Question: A Bank wants to update the Limit Online for the Cash type collaterals like Accounts, Deposits, securities and fiduciaries. Which of the following statements is correct on Online updation of Limit ?

Answer: It is possible to update the limit online provided the field ONLINE.UPDATE is set as YES in LIMIT, COLLATERAL.PARAMETER and COLLATERAL.TYPE applications

Question: A bank wants to charge 1% for the undrawn portion of a limit. What is the best way to set this up in Limits?

Answer: Setup a contigent account in UNUTIL.ACCT field in the limit record and setup interest on the account

Question: Where would you find the amount that a limit was originally granted for on a reducing limit facility?

Answer: Check the LIMIT record

Question: A bank desires to give a customer a 3M credit limit, but wants only 1M used for short term loans and the rest used only for long term loans. How can this be achieved?

Answer: Use the time band feature on the limit record

Question: A bank has sub-allocated 100K from a loan limit allocated to one of its customers to cover his overdrafts for the period of one year. The bank wants to ensure that the sub-allocation is not reversed if the overdraft has been utilized. How can the bank configure the system to ensure this?

Answer: AUTO.RESTORE.ALLOC field in LIMIT.SUB.ALLOC has to be set to 'Y'

Question: A bank wants to monitor a limit from being utilized for any new transactions beyond the end of the month. How does the bank set this up?

Answer: Setup LAST.DRAW.DATE field to month end date in the LIMIT record

Question: Which of the following statements is true with respect to field ONLINE.UPDATE in the LIMIT record?

Answer: Collaterals are revalued Online when the limit is utilized, subject to settings in COLLATERAL.PARAMETER, COLLATERAL.TYPE and the LIMIT record

Question: What type of account is opened for consolidating customer wise utilised and unutilised portion of limits?

Answer: Contingent Internal account using Category code defined in ACCOUNT.CLASS

Question: What is the valid structure for a sub product under a global limit? Where G = Global, P = Product, S= Subproduct

Answer: GGGPPSS

Question: Which field in Limit is used to specify the time sub-divisions of a LIMIT?

Answer: TIME.CODE

Question: Which of the following is not an accepted value in the field FX.OR.TIME.BAND in LIMIT.REFERENCE?

Answer: AC

Question: Limit records are not expired even after expiry date, what might be the reason?

Answer: All of the above

Question: Limit is sanctioned for 100T & loan is granted for 60T, reducing limit is set to "Y". What is the available limit?

Answer: 40T is available after approving the loan

Question: Bank wants to know all limit lines attached to a customer, which file you will refer to?

Answer: LIMIT.LIABILITY

Question: Bank wants to know the child limit & parent limit structure of all lines, which file you will refer to?

Answer: LIMIT.LINES

Question: Bank defined a global line for 100M, under which two sub products are defined with a limit of 75T & 50T.Is it possible to use this type of defintion of valid?

Answer: Yes, this is valid defintion

Question: Bank wants to Grant a Limit to a set of Customers who is not a part of any Liability group. How is this possible in T24?

Answer: Group can be formed by setting up LIMIT.SHARING.GROUP

Question: Bank Wants to Create a Limit for a Customer and give an Additional Limit for a Group of Customer. Is is a possible to set in T24?

Answer: Yes .This is possible by Setting up a Limit sharing Group.

Question: Which application is used for setting up Group Customer Limits.

Answer: LIMIT.SHARING.GROUP

Question: Bank Wants to set a Global Limit with a Reducing Product and a Non Reducing Product. How will they set the GLOBAL Limit?

Answer: Non Reducing Global

Question: Bank wants to set Priority between Individual and Group Limits in utilisation. Where can we set in T24?

Answer: Set in LI.LIMIT.DEFINE.PRIORITY

Question: Bank wants to produce a Report for Group Limit Utilisation. Where will they get the information?

Answer: LI.LIMIT.GROUP.ALLOCATION

Question: Bank has setup a Customer Limit for Account, Loans and Forex exposures. It wants to get addition Limit for the Customer for the Overdraft and Lending products alone. Is this posssible.

Answer: Yes. By setting a Group Limit for Overdraft and Lending.

Question: What is the Product Limit in a CROSS Limit Structure Called?

Answer: PROD

Question: On reaching the EXPIRY.DATE set in limit record, Which of the conditions need to satisfied for the Limit to move to history in COB?

Answer: All of the above

Question: Apart from excess override based on ONLINE.LIMIT amount, bank needs a separate override based on INTERNAL.AMOUNT also. How can we achieve it?

Answer: Bank has to setup field ADDITIONAL.VAL in LIMIT.PARAMETER to INTERNAL.

Question: Is it possible to monitor the country exposure during online through overrides or enquiry?

Answer: Country exposure can be monitored only using the cob report “LIMIT.COUNTRY.EXPOSURE

Question: How can a bank have separate FX limit netting setup for each counterparty?

Answer: By setting LIMIT.NETTING.PARAM record with id as counterparty customer id.

Question: A bank wants to update the outstanding in limit for LD contracts based on a setup in local table. How can we achieve it?

Answer: Bank has to develop a local routine with logic to refer the local table and decide the outstanding amount and link this routine in the field LIMIT.SUBROUTINE in corresponding LIMIT.REFERERNCE record for LD contracts.

Question: A customer is part of three groups M000000001, M000000002 and M000000003 and groups are created in the same order. Also this customer is having his own limit. Allocation priority is set in the order OWN, M000000001, M000000002 and M000000003. On inputting a transaction, which limit system will utilize?

Answer: OWN

Question: Which application can be used to define allocation priority for a customer in LIMIT.SHARING.GROUP?

Answer: LI.LIMIT.DEFINE.PRIORITY

Question: Which statement is correct regarding LIMIT.SHARING.GROUP application id?

Answer: Both A and B

Question: For a customer already allocation priority has been set as OWN and M000000001. Which application can be used to change this allocation priority as M000000001 and OWN.

Answer: LIMIT.CHANGE

Question: A customer is part of LIMIT.SHARING.GROUP M000000001. Allocation priority is set as M000000001 only. Limit available at own limit and group. But group limit doesn’t have enough limit amounts for the transaction. Then on inputting the transaction how will system utilize the limit?

Answer: full transaction amount will be utilized from the own limit.

Question: User wants to create a MAIN group with multiple products. Which value given below can be inputted in the field CREDIT.LINE in LIMIT.SHARING.GROUP.

Answer: 10000

Question: Which statement regarding LIMIT.SHARING.GROUP is more correct?

Answer: LIMIT.SHARING.GROUP can be set for more customers and more products

Question: Bank has Set a Customer Limit for 10M and a Group Level Limit for 15M. Customer has an Exposure of 15 M. How will T24 Limits will be Utilised by Default?

Answer: Customer Limit 10M and Group Limit 5M

Question: Bank has a Non Reducing Product Limit of 10M under a Non Reducing Global Limit of 15M. It Utilises 10M and Repays 8M. What will be a Available Limit at Global Level.

Answer: 15M

Question: Bank has a Reducing Product Limit of 8M under a Non Reducing Global Limit of 15M. It Utilises 8M and Repays 6M. What will be a Available Limit at Product Level.

Answer: 0M