How to create a Limit in DOKA and the Different Limit statuses available in DOKA

A bank is exposed to different type of risks when dealing with its customers.
Setting a limit, for a client/party allows the bank to control the exposure to that party and also monitor its own overall position. Since limit is a risk perception of the parties, limit products could be grouped differently from business products of a bank.

To book limits in Doka go to -> Static data >> Accounts/Limit >> Limit (Technical Name - DBILSB).

In Doka, Limits can be booked under different categories.

Limit per Party.
Limit per Headquarter.
Limit per Country.
Limit per Pairing Buyer/Supplier.
Limit per Party/Facility.
Limit per Party/Facility/Business Sector.

The following Limit statuses are available in system,

Blocked -This limit (line of credit) was stopped or blocked. For any reason, currently transactions for this object must not be settled. No new business transactions are allowed.
No Limit - No business transaction involving a liability can be carried out; A warning message will appear during processing.
Normal - A limit with currency and amount is associated to an object.
Unlimited - The customer has an unlimited line of credit. Thus, the system does not perform any checks.

Facility Limits:

Facility/Agreement/Commitment could be created according to the bank's need/situation and this allows the bank to monitor its exposure to that party at each Facility level.

For instance, facility could be created for import Business as a whole or facility could be created exclusively for short term loans, thereby allowing the bank to monitor and control its exposure with respect to its risk perception.

How to use Facility Limits in Doka:

To set up a facility limit, an existing Party limit is mandatory. Hence, party limit becomes the parent node and facility limit becomes the child node. So first the user should create the party limit set up.

Liability per Party

Liability per Party/Facility

Facility limits can be set up by the Banks under the Party limit. This allows further break-down or split-up of limits into different levels to better monitor the risk exposure. For example; the bank can decide to split the limits for Domestic and International business or can set up a limit for the Past Due Loans or for Sight and Usance L/C per party as different facilities.

The user needs to select first the party for which the facility limit needs to be defined, then details such as Facility ID , Facility Name, Expiry Date, Status, Limit amount etc. can be added.

Liability per Party/Facility/Business Sector

Facility limit can also be setup per Business sector under the Party facility limit.

For each facility, limit can be defined at a business sector level.

To define a business sector limit, existing party and facility limit is mandatory. Hence, party limit is the parent node, facility the first level child node and business sector becomes the second level child node.

More than one limit for the same business sector can be defined under the same facility. This creates a new sequence for the business sector limit and acts as a unique limit key.

Limit Tree Overview

Once a facility node is added to the Party limit, the limit tree overview becomes active. This provides a nice overview of how the Limit tree looks like. It also provides a quick view of the limit utilization along with the type of Limit.

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