What is liquidation measure in SAP FS-CMS - Collateral Management System?

SAP Term: liquidation measure

• Component: FS-CMS

• Component Name: Collateral Management System

• Description: A measure initiated by a bank to receive compensation for the open financial obligations of a customer. Note Normally, the bank liquidates the collateral object of the customer to receive compensation. In the scenario for guarantees, a bank can liquidate the collateral agreement.

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• Key Concepts: 
  Liquidation measure is a term used in the FS-CMS Collateral Management System (CMS) of SAP. It is a process that allows a lender to take action against a borrower who has defaulted on their loan. This action can include seizing and selling the borrower’s assets to recover the loan amount. 
  
  How to use it: 
  In the FS-CMS, liquidation measures are initiated by the lender when a borrower defaults on their loan. The lender will then assess the borrower’s assets and determine which ones can be seized and sold to recover the loan amount. The lender will then initiate the liquidation process, which includes notifying the borrower of their intent to seize and sell their assets. 
  
  Tips & Tricks: 
  When initiating a liquidation measure, it is important to ensure that all legal requirements are met. This includes ensuring that all relevant documents are in order and that all parties involved are aware of the process. Additionally, it is important to ensure that all assets are properly valued before they are seized and sold. 
  
  Related Information: 
  The FS-CMS Collateral Management System also includes other features such as collateral monitoring, risk management, and reporting. Additionally, SAP offers other software solutions for lenders such as loan origination systems and credit risk management systems.