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Banking Industry Solutions

Banking Industry Offerings

Collateral Management System

Collateral is legally watertight, valuable liquid property that is pledged by the recipient as security on the value of the loan. The main reason of taking collateral is credit risk reduction, especially during the time of the debt defaults, the currency crisis and the failure of major hedge funds Collateral Management System captures the complete details of the collateral and creates a repository.

Business Challenges

  • Historical collateral data is to be saved for 5 years as per Basel norms.
  • In some of the large credit accounts there are multiple credits and multiple collaterals offered and there is a need for an automated system to maintain these collateral details.
  • In some of the group accounts, there is a need for managing the common collaterals offered.
  • Collateral management has evolved rapidly in the last 15-20 years with increasing use of new technologies, competitive pressures in the institutional finance industry and heightened counterparty risk from the wide use of derivatives, securitization of asset pools and leverage.

What We Offer

Kumaran Systems offers a Collateral Management System which records the details of the collateral received, currency details, margin/haircut details and interest rates payables for cash collateral. Each collateral will be registered as per the federal norms and those details are entered in Collateral registration. The soft copies will be stored in Document management system. Collateral insurance information will be stored separately and reports will be generated from collateral reporting.

Benefits of Collateral Management System

  • Reduced credit risk
  • Economic capital savings: netting counterparty exposures reduces economic capital required to trade
  • Diversification
  • Improved liquidity
  • Higher profits
  • Higher trading efficiency



Nesbitt Burns Inc, Toronto, Canada

Providian Financials, US

Citibank, US

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