Mapping a Borrower Entity 

Use

You can use this procedure to group together persons, groups, or organizations in borrower entities in accordance with paragraph 19 section 2 of the German Banking Act.

Borrower entities are formed for the following business partners in particular:

·        All companies belonging to the same company group

·        Commercial partnerships and each partner assuming personal liability, as well as partnerships and each partner

·        Persons and companies on whose account loans are taken out, and those who take out loans under their own name

This grouping of borrowers in borrower entities plays an important role in regulatory reporting for large-scale and multi-million loans in accordance with paragraphs 13 and 14 of the German Banking Act.

Borrower entities represent single-level hierarchies.

Prerequisites

You have made the following settings in Customizing for the SAP Business Partner for Financial Services:

·        You have made the necessary settings, where applicable, under General Settings ®Business Partner Relationships

·        You have defined the identification number category borrower entity under Settings for Financial Services ® General Settings ® Additional Partner Numbers ® Define Identification Number Category.

·        You have set the identification number category borrower entity under Settings for Financial Services ® General Settings ®Additional Partner Numbers ® Set up Identification Number Category, and have determined that multiple usage is not permitted for the identification numbers.

Procedure

The system displays the Maintain Business Partner screen.

Creating the head of the borrower entity

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       1.      You create a business partner of the category Group in the BP Role Borrower Unit as the head of the borrower unit. In so doing, you can use an existing business partner belonging to the Group category, and add the role of Borrower Entity to this business partner, or create a “virtual” business partner that acts as an anchor for real business partners, linked by relationships.

You can also assign the group type Borrower Entity to this business partner on the Control tab page.

       2.      You define the borrower entity number as the external identification number for the borrower entity in this business partner on the Control tab page under Additional Business Partner Numbers.

Linking the members of the borrower entity

·        Link all persons, organizations, or groups belonging to the borrower entity directly, as independent business partners, to the head of the borrower entity using the relationship category Is a Member of a Borrower Entity.

Persons, organizations, or groups belonging to the borrower entity can be members of several borrower entities. You can determine the percentage and the amount of the capital investment in the shareholding data for the relationships, and indicate whether a controlling relationship exists.

You create the relationship Is a Member of a Borrower Entity in addition to representing relationships from a company law perspective, as Is the Parent Company of, or Is a Shareholder In, for example.

·        You can assign additional business partners to a borrower entity using the relationship category Is a Member of a Borrower Entity. You can remove individual members from the borrower entity either by limiting the validity period for the relationship, or by deleting the relationship from the borrower entity.

·        You can disband borrower entities. To do this, you limit the validity periods for existing relationships between members and the head of the borrower entity, or delete the relationships. You can archive, but not delete the head of the borrower entity.

Result

You have formed borrower entities from persons, organizations, or groups according to various criteria, in accordance with paragraph 19 section 2 of the German Banking Act, by linking them to one another in relationships.

You can search for members of a borrower entity using the business partner search function Partner by Other ID Numbers, by specifying the identification number category Borrower Entity and the identification number for the borrower entity.

Example

See Examples of Three Borrower Entities