Account balance definitions for transaction banking
This article explains how account balances are defined in transaction banking, which differs somewhat from the way they are defined in the core platform. On the Pismo platform, a transaction banking account is a debit account, so credit account balances are not relevant. For information about how the core platform determines account balances and limits, see Account limits.
The transaction banking domain leverages the functionality of the core platform's account balance endpoints, acting like a secondary ledger by taking the existing balance data from the core platform and using it in a manner that's more tailored for transaction banking.
On the Pismo platform, the core platform and transaction banking use different endpoints to retrieve account balances.
Core platform
Transaction banking
Here is a list of account balance definitions for transaction banking.
| Term | Definition | Equivalent in core platform? |
|---|---|---|
| Available balance | The available balance refers to the balance used for validating transactions. The available account balance comprises the sum of the account balance and the credit limit that a customer is eligible to use. Available balance can be understood through this formula: book_balance - earmarked_balance + overdraft_limit. | No. However it can be computed by adding available_credit_limit and total_overdraft_limit. |
| Book balance | The book balance, also known as the consolidated balance, is the total amount of all cleared funds. This balance includes earmarked funds, but does not include uncleared funds. It consists solely of funds that the customer owns or those that are provided by the bank. Bank-owned funds, specifically those set aside for losses, are not part of the book balance, as they are not subject to interest accrual. Book balance is calculated as follows: credit_balance - debit_balance + earmarked_balance. | No. However, it can be computed using core balances with the formula: available_credit_limit + held_funds + additional_funds. |
| Credit balance | The aggregate of the remaining balance from all the credit transactions that have been posted to the account. | No |
| Debit balance | The total balance of debit transactions recorded for the account. Any value greater than zero indicates the use of a credit limit. | No |
| Earmarked balance | An amount that has been set aside for future use, but has not yet been debited from the account. Earmarking reduces the available balance and increments the earmarked balance correspondingly. Despite being subtracted from the available balance, it continues to form part of the book balance. Only the actual execution of an earmark results in a debit. When the earmark is executed, the earmarked balance decreases, but the available balance is not affected, although the book balance does see a reduction equivalent to the executed earmark. The earmark balance is computed as follows: SUM(earmark_balance[1],earmark_balance[2],…,earmark_balance[N]) , where N is the number of earmarks applied to the account. | Yes. held_funds. |
| Ledger balance | The net result of all fund movements, both cleared and uncleared. It can be viewed as the cumulative effect of all postings in a given account, irrespective of their clearance status. The ledger balance is calculated as: book_balance + uncleared_funds. | No. Since uncleared funds are absent on the core platform, the balance for future scenarios is not applicable. |
| Overdraft limit | Assigned to the account following an initial risk analysis. As it only serves as a record of the granted limit, it isn't impacted if a transaction exceeds the available account balance. In an ideal scenario, when the account balance is insufficient, the overdraft limit is used and the available balance decreases correspondingly. | Yes. This is equivalent to total_overdraft_limit. See account limits. |
| Uncleared funds | The balance under consideration for future clearing. Uncleared funds are not included in either the book balance or available balance. These funds remain outside these balances until they are cleared. Uncleared funds have a settlement date, which is the date the funds are expected to be confirmed. If they are successfully cleared on the settlement date, the funds transition from the uncleared balance to the available and book balances. This balance often sees changes due to use cases such as checks. It's important to note that the account statement is affected by the clearance of funds on the settlement date. The relevant change is the movement of funds from the uncleared balance to the available and book balances. | No |
| Value dated balance | This balance is the basis for calculating interest accumulation. By default, it starts as the book balance value. If there are no backdated transactions, it remains equal to the book balance. However, if a backdated transaction occurs, the value dated balance is revised, and new balances for credit and debit interest are calculated. | No |
Updated 11 days ago
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