Cash flow management

The purpose of liquidity risk management in banks is to manage cash balance and inflow and outflow of cash flow. Liquidity risk management is to ensure that the bank has access to the appropriate level of liquidity and quality cash assets in order to fulfill obligations on time, protect the rights of investors and control the reduction of liquidity risk. Following the financial crises of 2008, the Basel Committee has determined the “liquidity coverage ratio” index to control the level of high-quality liquidity in financial institutions. In this circular, the requirements of credit institutions to control and reduce liquidity risk are mentioned.

The requirements include the principles of implementing liquidity management, strategy, organizational structure, internal regulations and creating an information system. According to this circular, the liquidity coverage ratio should be calculated daily in the credit institution (bank or non-bank credit institution) and if it is less than the allowed limit, the required liquidity should be provided according to the policies of the bank’s liquidity management strategy.

  • Responding to the directive of the central bank entitled "Instruction on Minimum Requirements for Credit Institutions' Liquidity Risk Management"
  • Establishing the ability to monitor and fully and comprehensively control the related indicators of the liquidity coverage ratio
  • The possibility of providing all kinds of reports in the field of liquidity risk and responding to the central bank
  • The possibility of presenting various reports in the field of liquidity
  • It is possible to send alerts in the form of SMS, email, etc. to the beneficiaries if the capital adequacy indicators deviate from the desired range.
  • Providing a set of liquidity risk indicators in a historical form and the possibility of comparing these indicators in different time frames.
  • The existence of analytical facilities and the ability to find the root of changes
  • High speed in providing reports and dashboards information
  • Full compliance of the calculations with the instructions of the central bank
  • Appropriate illustration in presenting information