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Interest and Charges User Manual

1. 3 17 3 3 6 Maintenance for Prepayment 3 18 3 3 7 Maintaining Rule for Calculating Commission On HDB nee 3 18 4 MAINTAINING SYSTEM DATA ELEMENTS csscsssssssssssscssssssssessssssssesessssssssesssssessssssesssenessessssosees 4 1 4 1 INTRODUCTION iii A sauces EEE 4 1 4 2 MAINTAINING SYSTEM DATA ELEMENTS esproar i nenea aE E Aa EEn EENES EA EENES aE SESE 4 2 4 2 1 Maintaining SDE for Interest Calculation on Daily Average Balance 4 10 4 2 2 Maintaining SDE for Tax Exemptiot 4 10 4 2 3 Maintaining SDEs for Computing TDS Lee 4 11 4 2 4 Maintaining SDEs for Computing Advance Interest ss sms 4 11 4 2 5 Maintaining SDEs for Computing Overdraft Interest ss 4 12 4 2 6 Maintaining SDE for Computing commission on Highest Debit Balance sse 4 12 43 VIEWING CUSTOMER TDS 5 4 13 4 3 1 Maintaining SDEs for Deducting Charges on Dormant ACCOUNTS 4 14 4 3 2 Implications of Working with User Defined Fields ss 4 15 5 GIVING UDE VALUES FOR CONDITION cccsscsscsssssssssssscssssssssssssssssenessssnsesessssssssssesesssssessessessosees 5 1 5 1 INTRODUCTION 5 1 9 11 Implications of Closing Record L sse
2. cesddusssccssddacs scene nE Ni 2 3 2 4 1 Defining General Condition AKIS A b ap EEEE 2 3 2 4 2 Dejiniri Special fossa tens ta ra 2 3 25 SING PREVAILING MARKET RATES ciked 2 4 2 6 COMBINING ACCOUNTS 2 4 2 12 CALCULATING CHARGES ba e e a 2 4 2 6 OTHER PEATURES ini see poet ee pit EE eee ai 2 5 2 9 RETRIEVING INFORMATION e 2 5 3 MAINTENANCE REQUIRED FOR PROCESSING INTEREST AND 3 1 3 1 INTRODUCTION A E JB e R 3 1 3 1 1 E 3 1 3 2 MAINTAINING BRANCH 3 3 3 3 MAINTAINING RULES FOR INTEREST AND CHARGES 3 5 3 3 2 System Elements SD ES a b B p Seeded deacon pe mt 3 7 3 3 3 User Elements i ba ab aes ees 3 7 3 3 4 Attributes Of Formula size iii ie EREE EEE EEEE EEEO A ENEE 3 9 3 3 3 Applying Prepayment Penalties on
3. Charge Describes Basis NUM This is the number of stale cheques for a given account STALE PPAY NUM STOP This is the number of stop payment applied on the cheques PPAY positive pay NUM This is the number of cheques cancelled or closed It includes the CANCL cancellations done for Refunded Refused cheques also PPAY NUM This is the number of cheques which are in replaced status REPLACE PPAY NUM AUT This is the number of positive pay instructions which are issued ISS PPAY automatically or through uploads It can be used to collect calculate using source code of the positive pay instruction In case the source code is not FLXC then it is considered as auto issued NUM MAN This is the number of positive pay instruction issued manually All ISS PPAY positive pay instructions for which the source code is FLXC are considered for this charge basis NUM TOT This is the total issued positive pay instruction for a given account ISS PPAY sum of point 5 and point 6 7 28 ORACLE Charge Describes Basis NUM TEL This number of teller transaction calculated and can apply excess TXN CONS charge for teller transaction on individual customer accounts TRD LIC You can calculate the trade license expiry charge based on the EXP CONS slab maintained TOD RNW The user will maintain charge amount in charge product CHG preference screen that would be applied for rene
4. 7 36 7 6 8 Waiving General Condition for Specific ACCOUNL sse eneennenenennnnnnnnnnn nn nnnnnnnan nanniet ta 7 36 7 6 9 Closing General Conilitiott i ab b p 7 36 11 gt IDEBINING SPECIAL CONDITION pea 7 36 7 7 1 Applying Producton ACCOUNT 7 37 7 7 2 Defining Minimum and Maximum Charge 22 7 38 7 7 3 SDECHVING CHAP LE EE E 7 38 7 7 4 Closing Special Condition ssa e e 7 39 7 7 5 Applying Consolidated Charges as Special Condition ss 7 39 7 7 6 Specifying Status Codes for 7 41 7 7 7 Maintaining of Roles for ACCOUNE 7 43 7 7 8 Maintenance of Event Accounting Entries for Products sse 7 44 7 7 9 Maintenance of Branch and Currency Restrictions sse 7 46 7 7 10 Maintenance of Customer and Category 7 47 7 7 11 SSIA Special Type of Savings 7 48 7 7 12 Transaction Codes for Processing External 7 51 7 713 Booking of External Char gessessen neen irain
5. You can query on records based any one or all of the following criteria e Authorization Status e Record Status e Reference Number e Branch Code e Date of Liquidation Click Search button The system identifies all records satisfying the specified criteria and displays the following details for each one of them e Authorization Status e Record Status e Reference Number 12 7 ORACLE e Branch Code e Date of Liquidation e Refresh Rates from H O 12 5 Processing Online Liquidation for Single Account You can process online liquidation for a single account using the Interest amp Charges Single Account Online Liquidation screen You can invoke the Interest amp Charges Single Account Online Liquidation screen by typing ICDLIQAG in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Interest amp Charges Single Account Online Liquidation Reference No Account No Date of Liquidation Refresh Rates fram HO Maker Date Time Checker Date Time Record Status Authorization Status You can query or modify the account details of the customers whose accounts are permitted to you for the query modification in the Group Code Restriction screen You can specify the following details here Reference Number The system displays the reference number Branch Code The system displays the code of the current branch Accoun
6. interest Statement Required Dr Cr Advices Charge Start Date Charge Booking Account 4 gt Product Details Product O waive User Defined Element Generate UDE Change Currency Advise Open UDE Id Dates E Effective Date OI Interest SDE E User Defined Element Id UDE Id Rate Code 9 3 1 1 Account Details Account In this screen you can view the account number and the branch to which the account belongs for which you are defining special conditions ORACLE Calculation Account Select the Header account to which the Child accounts will be linked By default it will be same as the customer account If you attempt to link a child account to another child account the system will display an error message to report the same The same validation will be performed when you change the structure type to Child with Reallocation On selection of the header calculation account the account currency will be displayed in the adjacent field The currency of the header account can be different only if the customer account currency is a EURO IN currency and when the header account currency is a EURO In this case the option list for the calculation account will consist of accounts in EURO and EURO IN currencies This filter will be done internally by the system Interest Booking Account At the
7. lt MMCB lt AMOUNT1 DAYS RATE1 YEAR 2 MMCB lt AMOUNT2 MMCB DAYS RATE2 YEAR oe ORACLE 6 3 1 Case Result 3 MMCB lt AMOUNT3 MMCB DAYS RATES YEAR 4 MMCB gt AMOUNT 3 MMCB DAYS RATE4 YEAR Tier Structure Formula 1 Non booked Case Result MMCB lt AMOUNT 1 MMCB DAYS RATE1 YEAR Formula 2 Non booked MMCB gt AMOUNT 1 LEAST MMCB AMOUNT2 AMOUNT1 DAYS RATE2 YEAR Formula 3 Non booked MMCB gt AMOUNT2 LEAST MMCB AMOUNTS AMOUNT2 DAYS YEAR Formula 4 Non booked MMCB gt AMOUNT3 LEAST MMCB AMOUNT4 AMOUNT3 DAYS RATE4 YEAR Formula 5 Booked Formula 1 Formula 2 Formula 3 Formula 4 Formula to Calculate Interest on Overdraft Account IC rule is created with formula given below to calculate interest on overdraft account based on value dated balance Formula Case Result Type Cr D no r 1 NET VD INTEREST Booked Dr lt 0 C 100 DAYS YEAR Interest product is created with the above mentioned IC rule and interest is applied on the overdraft account based on rate of interest maintained Example Let us consider a customer with the following details Detail of Linked Inte
8. 14 Annexure A Accounting Entries and Advices 14 1 Accounting Entries for Interest and Charges This section contains details of the suggested accounting entries that can be set up for the Interest and Charges module of Oracle FLEXCUBE The details of the suggested accounting entries are listed event wise 14 1 1 IC Events The following is an exhaustive list of events that can take place during Interest or Charge calculation In the subsequent paragraphs we shall examine the accounting entries and advices for each of the events listed below Event Code Event Description CLIQ Charges Liquidation IACR Interest Accrual ILIQ Interest Liquidation UDCH UDE Values Change 14 1 2 Amount Tags The amount tags listed below are hard coded in Oracle FLEXCUBE Amount Tag Description CHARGE Charges IACQUIRED Acquired Interest Amount IACR Interest Accrual IACR_ADJ Interest Accrual Adjustments ILIQ Interest Liquidation TAX Tax TAX ADJ Tax Adjustments INT PADJ Back valued interest adding to the normal interest INT NADJ Back valued interest reducing the normal interest TAX PADJ Back valued tax adding to the normal tax 14 1 ORACLE Amount Tag Description TAX_NADJ Back valued tax reducing the normal tax In addition to these you can define amount tags as per your requirements 14 1 3 Accounting Roles The following list contain
9. Description Oo Currency Maximum Minimum Discount Percentage Discount Amount Charge Notification Receivable General Ledger Product You must identify the individual charge products for which the applicable charges would be consolidated using the consolidated charge product While linking charge products with a consolidated charge product remember e Only charge products can be linked to consolidated charge products e A charge product can be linked to just one consolidated charge product e charge liquidation periodicity defined for individual charge products linked to a consolidated charge product must be the same as the charge liquidation periodicity set for the consolidated product Charge Currency You can indicate the currency in which the charges would be consolidated either account currency or local currency FaR ORACLE Periodicity and Liquidation Month You must indicate the periodicity at which the consolidated charges would be liquidated for the indicated account class using the consolidated charge product If the liquidation is to take place on a yearly basis you can specify the month during which it would take place As stated earlier the charge liquidation periodicity defined for individual charge products linked to a consolidated charge product must be the same as the charge liquidation periodicity that is set for the consolidated product 7 4 1 1 Account Details Account Class and Cu
10. 5 7 ORACLE 5 1 2 Identifying and Specifying Values for UDES Lee 5 8 5 1 3 Interest Rate Association for Account 5 9 5 1 4 Maintainin Rate Codes 5 15 5 1 5 Defining Effective Date for Rate Code 5 16 5 1 6 Closing Rate for Date e ppt 5 17 5 2 MODIFYING UDE VALUES FOR SELECT CUSTOMER ACCOUNTS cccccssssesssessessssesseesssesseesseeaseessasaseesnaeas 5 17 BUILDING FORMULAE ccsssscssesccnscscenersssnscesssssescssensssssnesscsncssesssssnesesenesscsscssossssssssssnessssnessessessosees 6 1 OL INTRODUCTION oerien SSR a A l 6 1 62 BUILDING BLOCKS OF FORMULAE 6 2 63 BULDING FORMULAE E EREEREER ETENEE ENERET ESEE ENEAS EEEN 6 4 6 3 1 Formula to Calculate Interest on Overdraft ACCOUNt e sse sennennnnnennnenennan near rna sn nsa s na 6 5 DEFINING INTEREST AND CHARGE PRODUCTS ssssnsnenennannnennonnennonnennoneensenoennesteeneneeme ens meea T 1 Tel INTRODUCTION i EEEE E TANE EEE a iets Adee E AP ee 7 1 7 2 DEFINING PREFERENCES FOR INTEREST 7 6 7 2 1 Liquidation Related Details 7 11 7 2 2 Repopulating UDE Values at Rollover 7 19 7 3 SPECIFYING
11. 9 2 8 Identifying and Specifying Values for UDES Loss ens nn ena 9 12 9 3 DEFINING SPECIAL CONDITION B p ea dob EKO EE EE EEEE ESER 9 13 9 3 2 Defining UDE Values for the 9 18 9 3 3 Specifying Effective Date for UDE Value Pickup ss 9 20 9 3 4 Closing Values Applicable for Effective Date 9 20 9 3 5 Recalculation of Interest for Back valued UDE Value 9 20 9 4 ASSOCIATING CUSTOMER ACCOUNT WITH ANOTHER ACCOUNT 9 21 9 4 1 Application of Interest and Charges NOE 9 21 9 4 2 Details for Deposit types ena nn nn ninni nn nsara ran tannar ant ta 9 22 10 CHECKING FOR CONSISTENCY IN DATA sesnosnnoennoennonnonnoseneenneeseees noon oeenoeen sens oenooenosenosene sena 10 1 10 L INTRODUCTION sisa bieb RP Be tubi ET E eb a aie 10 1 10 2 RUNNING MAINTENANCE CONSISTENCY CHECK 10 1 10 2 1 Unauthorized ACCOUNTS ccccccsccccecsceceeseccecssseceeusscecsesaececseseeeeeaeecsesaeeecueaaeesesaeeessesueeecseaaeeeesensesseaaees 10 1 10 2 2 Unauthorized Account 1 10 2 10 2 3 Unauthorized Currency Details ccccccccccccssccessceesseceeseeenseceseceessecseneeeaaeceeneeesceceeeeeeaaecseneeeaaecseneeenaeeees 10 2 10 2 4 Details of Invalid P
12. New 453 Enter Query Calculate From Date B Product Code Account Number Interest Product HEE E Product Code laz Submit Batch 12 12 ORACLE You can query or modify the account details of the customers whose accounts are permitted to you for the query modification in the Group Code Restriction screen You can specify the following details here Calculation From Date You can get the interest applicable for an account over a period Enter the From Date for calculation To Date You can get the interest applicable for an account over a period Enter the To Date for calculation 12 8 1 1 Product Code You can choose a product for which you want the interest applicable in the following manner e All products e Selected products Click against the category you wish to choose Account Number Click on Account Number tab in the Interest amp Charges Multiple Account Online Calculation screen to get below given screen Interest amp Charges Multiple Account Online Calculation New 7 Enter Query Calculate From Date E Product Code Account Number Interest Account E Account Number o Submit Batch You can choose an account for which you want the interest applicable in the following manner e All accounts 12 13 ORACLE e Selected accounts e Selected account classes Click against the category you wish to choose Intrad
13. 10 5 Account No Maker Date Time Checker Date Time Record Status Authorization Status Account Number You can choose to liquidate interest for All accounts that are part of the interest system Selected accounts Selected account classes Click on the buttons adjacent to each option to indicate that you would like to liquidate interest using the option Using these options in conjunction with the options in the Products To Liquidate field you can liquidate interest for All accounts linked to all products in your branch All accounts linked to selected products Selected accounts linked to any product Selected accounts linked to selected products Selected account classes linked to any or specific products Depending on your selection criteria in conjunction with the Products to Liquidate field a list of accounts will be displayed 12 5 ORACLE For example if you choose to liquidate interest for selected accounts and selected products a list of all authorized products will be displayed When you choose a product a list of all the authorized accounts on which the product is applied will be displayed Choose the accounts for which you want to liquidate interest If you choose to liquidate interest for AIl Accounts linked to All Products the list of accounts for which interest is liquidated will not be displayed Interest will be liquidated for accounts linked to any pro
14. 4 2 2 e OD_APPLICABLE Maintaining SDE for Interest Calculation on Daily Average Balance You need to maintain an SDE for interest calculation on daily average balance This SDE gives the difference between the PRINCIPAL EXPECTED and the value dated balance of the CASA account The system calculates interest on the minimum of the PRINCIPAL EXPECTED and the value dated balance of the CASA account If the CASA account balance is greater than the PRINCIPAL_EXPECTED amount the system calculates the savings interest on the PRINCIPAL_EXPECTED amount only For calculating interest on the balance over and above the PRINCIPAL_EXPECTED amount an SDE basis Differential Balance is provided in Interest amp Charges System Data Element Maintenance screen This SDE gives the difference of PRINCIPAL_EXPECTED component in the loan account and the balance in the CASA account CASA Balance USD MO Loan Principal Expected USD CL EXPECTED USD 10000 15000 0 5000 10000 0 15000 10000 5000 8000 8000 0 Example Consider the following details Loan Amount 100 000 USD CASA Balance 500 000 USD EMI 5 000 USD During liquidation the system settles 5 000 USD towards principal and recalculates the tenor of the loan The SDE based on Differential Balance fetches the differential balance i e 500000 95000 405000 USD Similarly you need to create another SDE by name CL_LINKED This SDE
15. Amount 4 gt 5000 10 Rate 4 You would like to liquidate interest for this account class every six months The current liquidation cycle begins on 1 1 98 SETUP PROCEDURE Step 1 You define Monthly Minimum Credit Balance as an SDE in the SDE Maintenance screen You define a rule CRIN to calculate interest based on the monthly minimum credit balance in the Rule Maintenance screen While creating the rule you identified the SDE as Monthly Minimum Credit Balance and the UDEs as Amount 1 Amount 2 Amount 3 Amount 4 Rate 1 Rate 2 Rate 3 and Rate 4 Step 2 You link this rule to a credit interest product that you have defined in the Product Definition screen You apply this product to the Save Money LCY class of accounts in the Product Preferences screen You define the liquidation cycle as half yearly The first liquidation will be in June and the next will be in December since the current liquidation cycle begins on 1 1 98 Step 3 In the UDE maintenance screen you must specify the UDE values as follows Product Code CRIN Account Class Save Money Currency LCY Effective Date 01 01 98 Amount 1 gt 1000 gt 2000 Rate 1 6 Amount 2 gt 2000 gt 3000 Rate 2 7 Amount gt 3000 gt 5000 Rate 3 7 5 Amount 4 gt 5000 Rate 4 10 RESULT Unless you change the UDE values the values that you have specifie
16. Body of the Report The following details are displayed as body of the generated report Field Name Field Description Account Indicates account number of the customer Description Indicates short description specified for the account number Product Indicates Product ID mapped to the account Frm No Indicates reference number for the form CCY Indicates currency code of the account Book CCY Indicates the currency code of the book Book Account Indicates account number of the book Book CCY Amount Indicates amount in the book currency LCY Amount Indicates amount in local currency 15 7 ORACLE 15 5 The Accrual Control List The Accrual Control list provides details of all accruals that were done for a period that you specify in the Accrual Control list options You can invoke the screen by typing the code LIDRPACCR in the field at the top right corner of the Application tool bar and click on the adjoining arrow button Accrual Control Report Selection Criteria Accrual Processing Date This period should be specified by providing the From and To dates of the period Since accruals are normally done at a regular frequency say monthly you should take the report as of which the accrual entries were passed To take the report as of a particular date enter it at both From and to Date prompts 15 5 1 Contents of the Report This report gives the following details for all accounts on
17. Check this box to indicate that force charges should be collected waived during account closure By default this option is unchecked Track Receivable Auto Liquidation and Force Charges during A c Closure fields are applicable only for the charges on the account calculated through the IC module Charge Basis in Oracle FLEXCUBE If the product type is Charges you have to specify the basis on which you would like to levy the charge The following charge basis is available in Oracle FLEXCUBE e Charge Basis for Oracle FLEXCUBE transactions e Charge basis for maintenance types of charges e Charge basis for external charges All three charge basis are explained in detail below Charge Basis for Oracle FLEXCUBE Transactions Non YTD Basis For processing charges for all Oracle FLEXCUBE transactions you can use one of the following non YTD based charge basis Charge Basis Describes NUM ACCT You can fix the number of regular periodic free account STMTS statements for a liquidation cycle For every extra account statement that you issue you can levy a charge NUM CHQ RET Every cheque that bounces is recorded in the Cheques Returned file You can charge a penalty on every bounced cheque NUM CHQ ISS You can fix the number of free cheques that can be issued for a liquidation cycle For every extra cheque leaf issued you can levy a charge NUM STOP You can levy a charge for every stop payment instruction
18. Consolidated Charges Products To set up a charge product that would be used for consolidating charges applicable for accounts under an account class you can select Consolidated Charge as the Product Type in the Interest and Charges Product maintenance screen Slogan Enter a slogan for the product that you are creating In the Slogan field enter a slogan that suitably announces the product to your customers Product Start Date When you create a product you must also specify a date from which it can be used This date is called the product Start Date The start and end dates of a product come in handy when you are defining a product for a scheme which is open for a specific period Product End Date Indicate an expiry date for a product that you create The expiry date is referred to as the product end date You cannot use a product beyond the specified expiry date If you do not specify an End Date the product be used until it is closed Include for TDS Calc If you have enabled the check box Include for TDS Calc for the IC product you can maintain the IC product as a Tax or Non Tax product Choose the Tax option in the Product Type to define the IC product as a Tax product This allows you to calculate deduct and view the TDS for the accounts belonging to this product No accounting entries are available for IACR Interest accrual since no accrual is done for the Tax products The rule
19. For Smart Current Money accounts in your bank you have specified that you would charge 3 debit interest Cavillieri and Barrett Finance Corporation has three accounts under this class Of these you want to charge a debit interest of only 2 5 for one account To achieve this you would define a Special Condition for one account on which you charge 2 5 while the other two fall under the General Condition defined for Smart Current Money accounts The product has first to be linked to the account class to which the account belongs When maintaining an account in the Customer Account Maintenance screen you can opt to define special conditions for it If you opt to define special conditions for an account the general conditions defined for the Account Class to which the account belongs will NOT apply to this account ale ORACLE To define special conditions invoke the IC Special Conditions Maintenance screen from the Customer Accounts Maintenance screen You can invoke the Customer Accounts Maintenance screen by typing STDCUSAC in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Then click Interest button to view the following screen IC Special Conditions Maintenance Account Details Account Calculation Account Interest Start Date Booking Account Interest Booking Account Branch Charge Booking Branch
20. Il 7 12 LIQUIDATING INTEREST noon noon oen sena one 12 1 12 1 INTRODUCTION a eb bed pe ed p bit EEEE EEr EE b e p ERE 12 1 12 2 PROCESSING ONLINE LIQUIDATION 0 0 ss siccccescssesesvadceasessosveeetes ce sevsavsvaseacecesvessesenveececoasesucctecedsevesdebeccatvesse 12 1 123 PROCESSING ONLINE LIQUIDATION FOR MULTIPLE ACCOUNTS ssssssccccecsesssssceeececsesssssseeeeeesenenteaeeeeees 12 3 12 3 1 Select Product 12 4 12 3 2 Authorizing Online Liquidation for Multiple Account ssmmmmesennnnnnnnneznnennzennnenzzznznznznzzznzi 12 6 12 4 VIEWING INTEREST AND CHARGES MULTIPLE 12 7 12 5 PROCESSING ONLINE LIQUIDATION FOR SINGLE 12 8 12 5 1 Authorizing Online Liquidation for Single 12 10 12 6 VIEWING INTEREST AND CHARGES SINGLE ACCOUNT cscesseesseescesseeseceeceseceaecsaecaaecaaeeneeeseseeeeeeeeseeeas 12 11 12 7 CALCULATING INTEREST APPLICABLE FOR 12 12 12 8 PROCESSING ONLINE CALCULATION FOR MULTIPLE ACCOUNTS c ccsscesscesscesecsseceseceeeseeeaeeeeeeeneeeeees 12 12 ORACLE 12 9 PROCESSING ONLINE CALCULATION FOR SINGLE ACCOUNT cccccccsceeesecesececeeecec
21. lt Lien Amount Credit Component Balance Debit Component Balance Overall Balal User Defined Fields 1010 You can query or modify the account details of the customers whose accounts are permitted to you for the query modification in the Group Code Restriction screen You can calculate interest for a specific account for a given date range 12 15 ORACLE Account Number Specify the account number for which you need to calculate the interest Choose the appropriate account number from the option list Close Out To date Maturity Date Choose the date type The following options are available e Close Out e Maturity Calculation From Date The system defaults the account start date when you select the account number from option list Calculation To Date For TD accounts if you have selected Close Out as the date type then Calculate to Date will be defaulted to the current application date If you have selected Maturity as the date type then Calculate to Date will be defaulted to the maturity date of the TD account Name The system displays the customer name Status The system displays the status of the account The possible values are given below e Open e Closed Maturity Date The system displays the TD account maturity date Account Branch The system displays the account branch Account Currency The system displays the accou
22. option is selected for the interest product that is attached to the term deposit account If selected system will refund all the taxes that are levied till date for the deposit This option will be enabled only when you maintain deposit type of interest products Bkval Recalc Flag Check this box to indicate that for all accounts associated with this product the recalculation of interest needs to be done and the difference in interest adjusted during the next liquidation as an interest adjustment entry when an accounting entry is passed into the previous liquidation period Defer Liquidation and Defer Liquidation By Days You may wish to defer the calculation and liquidation of periodic interest on an account for a few days beyond the end date of each interest period This deferment will allow the inclusion of interest adjustments due to back valued entries posted into the account after the period end date In order to avail of this facility you need to enable the Defer Liquidation option and also mention the number of calendar days by which you wish the interest liquidation for a period to be deferred The functionality is explained with the help of the following example ORACLE Example You have enabled the Defer Liquidation option and opted to defer liquidation by 10 days For the period 01 Mar 2003 to 31 Mar 2003 the period code in On 05 Apr 2003 an entry is posted with period code M04 into the CASA for val
23. charges would be liquidated for the remaining days 16 days in the liquidation period You should necessarily liquidate all charges before you close an account or change its account class Typically you would use the Ad Hoc liquidation function to do this 7 3 3 1 Account Details Account Class Choose the account class on which you would like to apply the Charge product for which you are defining preferences ORACLE Currency Code Specify the currency of the Account Class on which you would like to apply the Charge product Free ltems You can specify the number of items on which you would not like to levy charges as Free Items If the items exceed the value that you specify here a charge would apply You would specify an amount as a Free Item in case you identified the Charge Basis for the product as Turnover For example if you do not want to levy a charge on debit turnovers that do not exceed USD 3000 enter 3000 in this field When charge is calculated on a charge basis other than TURNOVER you would specify the number or items in this field For example if you want to allow two free account statements for the account class on which you apply the charge product enter 2 here Open More than one product may be applicable on an account class at the same time You can temporarily stop applying a product on an account class by closing it You can achieve this b
24. in the Accrual Day field For months with 31 days interest will be accrued on the 31st For months with 30 days interest will be accrued on the 30th and for February interest will be accrued on the 28th or the 29th as the case may be If you enter 30 in the Accrual Day field for example interest will be accrued on the 30 of the month till the 30 For February it will be either 28 or 29 as the case may be If a month has 31 days the accruals for the extra day will be done during the next accrual cycle That is the 31st of the month will be taken into account when interest is accrued for the next month Note that accruals will always be done till the Next Working Day 1 that is upto but not including the next working day 7 2 1 2 Payment Method In case of Term deposits you have to specify whether the payment method for the main interest is to be Bearing or Discounted This cannot be changed at the time of processing a deposit Bearing In case you choose bearing product as the payment method the system books the TD without liquidating the interest for the account The end of day process accrues the interest and at BOD liquidation will occur based on the maturity date Discounted For discounted products e payment of interest is upfront e interest liquidation on maturity date In case of true discounted the payment method is calculated based on the formula maintained in the IC rule definition and the
25. or just an amount that you would want to use in a formula In this field the currency in which the UDE is specified gets defaulted from the interest product Product Accruals In this field the product accrual gets defaulted from the interest product Accrual Frequency The interest on an account can be accrued over a period The term accrual frequency refers to the interval between two successive automatic accruals In this field the accrual frequency gets defaulted from the interest product Rate Chart Allowed The system defaults this preference from account class indicating the system should calculate TD interest based on the LDMM float rate maintained in the LD MM Floating Rate input screen CFDFLTRT If this box is checked then system will pick interest rates based on different tenors minimum amount currency and effective date for a TD Note the following e When you chick Rate Chart Allowed the system does not display the UDE value corresponding to LD MM During IC calculations the system adds the UDE value to the LD MM derived rate and applies the interest accordingly e If Rate Chart Allowed is checked for Web branch transactions during TD account class defaulting you need to maintain LD MM floating rate code for the TD e During partial redemption pre closure the system picks the rate only for TDs having Rate Chart Allowed checked Liquidation Frequency The term liquidation fre
26. tha ORACLE Defining a slab tier structure To recall you can calculate allowance on an SSIA based on the net credit turnover in the account The amount limits minimum and maximum that will be eligible for an allowance a fixed rate decided by your bank can be maintained as a tier or slab structure Example Assume that your bank wants to contribute 1 Euro for every 4 Euros deposited into an SSIA i e 25 on the amount deposited Further the minimum lodgment amount is 12 50 Euro and the maximum is 12 50 Therefore the customer is eligible for a 25 allowance if the deposit amount is between 12 50 and 254 Euros The following slab structure can be maintained Slab 1 0 12 50 0 Slab 2 12 50 254 25 You can define the slab structure in the IC Charge Product Preferences screen 7 7 11 2 Processing Allowance on SSIA At the end of the month the following processing will be done on the account All lodgments to the SSIA will be totaled at the end of the month The allowance amount will be calculated on the deposited amount The following entries are passed Dr SSIA Receivable A C Cr Customer A C The allowance will be recovered from the revenue department by means of a direct debit The following entries will be passed for this Cr SSIA Receivable A C 4 Dr Nostro 4 The SSIA will be set up in the Customer Accounts Maintenan
27. In this field you can view the code of the product for which you are defining customer restrictions SSIA Special Type of Savings Account SSIA refers to a special type of savings account used for promoting savings by customers This scheme was introduced between 1 2001 and April 30 2002 and will last for 5 yrs Though there is no provision to open a new SSIA after April 30 2002 you may transfer an SSIA from one institution to another Depending on the policies of your government you can maintain a minimum and a maximum deposit amount for an SSIA Further you can also assign a fixed allowance rate on the deposited amount if the deposit is within the specified limits The deposit may be made by means of a cash deposit a journal entry or a teller transaction On maturity after 5 yrs you can collect an exit tax on the interest component alone A customer can make a partial or total withdrawal from his SSIA before the 5 year term in which case tax will be applicable on the full amount including the principal When a customer requests for withdrawal of a certain amount from the SSIA the account is debited for an amount that is inclusive of the tax component as well so as to ensure that the customer receives the amount requested for at any point of time before maturity This is illustrated in the following example Example Assume that your customer requests for 7700 00 Euro from his SSIA Further your bank decides to apply a
28. e the minimum and the maximum charge for the product e numeric values of the slab tier the charge amount and the charge rate e the number of free transactions You can apply a product to any number of account classes When you apply a product to many account classes charges for all the accounts belonging to the classes will be calculated in a similar fashion You can also apply several products on an account Product Code The product code for which you are defining preferences is displayed in this field tae ORACLE 7 3 1 7 3 2 Charge Currency Normally you would calculate charges in the local currency However when indicating your preferences for a Charge product you can opt to levy a charge either in e the local currency e account currency All charges due to a product will be applied in this currency In addition any amount involved in the application of charges like the turnover amount the slab and tier amounts a flat charge etc will always be in the currency specified here If the charge currency is defined as the local currency and the product is applied on account class in a foreign currency all the charge values such as the slab tier amounts charge amounts etc will be converted to the account currency from the local currency before the charge is applied This currency conversion will be done at the mid rate for the two currencies Slab Tier When defining your preferen
29. entry For such a transaction you can specify whether you want to use the UDE values as of the period of the back dated entry or that of the current period This can be achieved by closing a UDE value for an effective date The following example illustrates this concept You are on 31 March and you have two UDE values for the following dates 01 March and 15 March You pass an entry back dated to 03 March For this transaction the UDE values applicable will be picked up in the following manner If the record for 01 March and 15 March is open the UDE values applicable for those periods will be picked up If the records for 01 March are closed the UDE values applicable as of 15 March will be picked up Recalculation of Interest for Back valued UDE Value Changes Oracle FLEXCUBE automatically triggers the re calculation and adjustment of the Interest Amounts due to or from the customer account for all back valued UDE value changes made to the customer account This re calculation and adjustment is done for the available account history Moreover the accruals for back valued interest entries are based on the product s accrual frequency The recomputed interest for the previous liquidation periods will be posted separately as a consolidated amount into the customer account However the value date of these entries will be the same as that of the normal interest liquidation date Example You have maintained an IC product with the product co
30. interest product with an account class and define the numeric values for the user data elements linked to the product Refer to the chapter Giving UDE Values for a condition for further details Modifying UDE Values for Select Customer Accounts To recall when you associate an interest product with an account class you have to define the values for the user data elements UDEs identified for the product The values specified for the UDEs would apply on all accounts that are part of the account class However your bank may want to change the UDE values for select accounts Oracle FLEXCUBE allows you to change UDE values for specific accounts based on specified criteria You can modify UDE values in the User Defined Elements Values Maintenance Query screen Invoke this screen from the Application Browser You can invoke the Interest amp Charges User Data Element Amendment screen by typing ICDUDEUL in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button interest amp Charges User Data Hement Amendment Reference Number Branch Product az Currency Account Class aZ Effective Date User Data Elements Query User Data Elements Modifications E User Element Effected Accounts Input By Authorized By Modification Date Time Date Time Number Authorized Open Reference Number Reference number is auto generated by the system First three
31. will be picked up for the purpose of calculation of interest The default value in this field should be specified as 1 However you can enter any date here For example if you want to calculate interest from the 15th of a month enter 15 here Last Day of Calculation You may have a requirement wherein you have to consider the balances or turnovers only during a specific period of the month For example in some countries credit interest for Savings Bank accounts is given for the minimum credit balance in the account during the month between the 10 and 25 of the month To define an SDE that returns the minimum balance between 10 and 25 of the month you should define it as follows Basis Balance Nature Credit Type Value dated Periodicity Monthly Operation Minimum Days from Start 10 Last Day of Calculation 25 The minimum balance between 10 and 25 both inclusive will be returned by this SDE However the number of interest days will be the entire month unless you specify otherwise while defining the interest calculation formulae for an Interest Rule involving the SDE Please refer the chapter Building formulae The following is a list of the SDEs already available in the system e ACCOUNT_LIMIT e ACCOUNT _TOD e LINE AMOUNT e REPORTING AMOUNT e DAYS e MONTH e YEAR e MIN_BAL_REQD e CURRENT_BAL e e AVG CONS 4 9 ORACLE 4 2 1
32. 001 the Rate Code option list will display RTCD1 If he chooses RTCD2 then a configurable override will be displayed Specifying the Product Specify the product for which you wish to print UDE values Select a product from the option list provided Only those products that have already been associated with the selected branch code will appear for selection Maintaining Rate Codes An Interest Rule is made up of SDEs UDEs and formulae refer the chapter Maintaining Rules for details While creating a rule you only identify the UDEs that you would be using to calculate interest UDEs can be of the following types e Amount e Number e Rate You enter the values of UDEs such as Amount and Number in the UDE Maintenance screen The Debit or Credit rate is the rate at which interest has to be calculated for the accounts linked to the Interest Rule These rates can be either e Fixed e Floating If the rates are fixed you can specify their values in the UDE Maintenance screen If you want to apply floating rates you should link the rate type UDEs identified for the interest rule to a Rate Code in the UDE Maintenance screen You can also specify a spread Typically you would apply different rates of interest to different types of accounts For example you would apply different interest rates for current and savings accounts For each currency therefore you will have to maintain different interest rates The following example ill
33. 16 1 ORACLE 1 About this Manual 1 1 Introduction This manual is designed to help you get acquainted quickly with the Interest and Charges module of Oracle FLEXCUBE It provides an overview to the module and provides information on using the Interest and Charges module of Oracle FLEXCUBE You can further obtain information specific to a particular field by placing the cursor on the relevant field and striking lt F1 gt the keyboard 1 2 Audience This manual is intended for the following User User Roles Role Function Back office managers officers Authorization functions Product Managers Product definition and authorization End of day operators Processing during end of day beginning of day Financial Controller Product Generation of reports Managers 1 3 Organization This manual is organized into the following chapters Chapter 1 About this Manual gives information on the intended audience lt also lists the various chapters covered in this User Manual Chapter 2 An Overview of Interest and Charge Module gives vou a bird s eve view of the Interest and Charges sub svstem in Oracle FLEXCUBE Chapter 3 Maintenance Required for Processing Interest and Charges explains how branch parameters and interest rules can be maintained in the Interest and Charges sub svstem Chapter 4 Maintaining Svstem Data Elements describes the process of setting up svstem
34. 3 3 3 System Elements SDEs The first thing that you have to do while defining a Rule is to pick up the System Date Elements that you would use in the rule You can pick up as many of them as necessary only those that are picked up here can be used in the formulae for the Rule subsequently To recall an SDE identifies the principal and the period for which you would like to apply interest or charges The attributes for each SDE is defined through the System Data Elements Maintenance screen In this screen you can only identify the SDEs which you would like to use to build interest rules In order to specify exemption of tax on interest you will have to use the DIRT exempt SDE provided specifically for this purpose Refer to the SDE chapter of this user manual for details of DIRT exemption User Elements UDEs In the same way that you pick up the SDEs applicable for the rule that you are defining you should identify the UDEs which you would be using in the rule The UDEs that you pick up could be any of the following types e Rate e Amount e Number The interest that you charge on a debit balance is an example of a debit rate The interest that you pay on acredit balance is an example of a credit rate A User Data Element will be an amount under the following circumstances e inthe case of a tier structure the upper and lower limit of a tier or a tier amount e inthe case of a charge when it is indicated as a flat
35. Code e Account No e Date of Liquidation Click Search button The system identifies all records satisfying the specified criteria and displays the following details for each one of them e Authorization Status e Record Status 12 11 ORACLE 12 7 12 8 e Reference Number e Branch Code e Account No e Date of Liquidation e Refresh Rates From H O Calculating Interest Applicable for Account At any time during the day you can calculate the interest for an account or accounts That is you can calculate the interest or charges for accounts for a specific period without actually liquidating them You can calculate interest for an account or accounts using the IC On line Calculation screen Using the Interest Calculation function you can calculate interest for any one of the following e a specific account e selected accounts e selected account classes e accounts linked to selected products e accounts linked to all products that is all accounts Processing Online Calculation for Multiple Accounts Online Calculation for multiple accounts can be processed via the Interest amp Charges Multiple Account Online Calculation screen You can invoke the Interest amp Charges Multiple Account Online Calculation screen by typing ICDOCALC in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button interest amp Charges Multiple Account Online Calculation
36. Deposit Transaction Code No of Process Redemption Transaction Redemption Prepayment Code Transaction Code Purging Details Retention Period Next Purge On Next Purge For OD Write off GL Bad Debit expense GL Suspense GL Maker Date Time Checker Date Time Record Status Authorization Status You can maintain the following parameters here Branch Code Branch code of the current branch is defaulted here However you can specify branch code from the adjoining option list if needed Branch Name Name of the specified branch is defaulted here Liquidation Netting Check this box if you need netting for interest charges liquidation Process Till Select a date till which you need to process interest charges from the options The following options are available for selection 3 3 ORACLE e System Date Select if you need to process till system date e Next Working Day 1 Select if you need to process till next working day Deposit Transaction Code Specify a valid deposit transaction code from the adjoining option list No of Process Number of the process is defaulted as 1 here however you can modify if needed Redemption Transaction Code Specify a valid redemption transaction code from the adjoining option list Redemption Prepayment Transaction Code Specify a valid redemption prepayment transaction code from the adjoining option list Purge Details You can maintain the following purging
37. Finance Corporation between 1 March 1998 and 31 March 1998 is USD 50 000 If you choose to apply charges on the basis of the following slab structure Slab 1 0 10 000 5 Slab 2 10 000 25 000 7 5 ORACLE 7 6 4 Slab 3 gt 25 000 10 RESULT The charge levied on Cavillieri and Barrett Finance Corporation would be 10 since the debit turnover in the account falls in the third slab that is greater than 25 000 If you choose to apply charges on the basis of the following tier structure Tier 1 0 10 000 5 Tier 2 10 000 25 000 7 5 Tier 3 gt 25 000 10 RESULT The charge levied on Cavillieri and Barrett Finance Corporation would be as follows For the turnover amount between 0 and 10 000 the charge would be 5 10 000 For the turnover amount between 10 000 and 25 000 that is 15 000 the charge would be 7 5 15 000 For the turnover amount greater than 25 000 the charge would be 10 xxx 25 000 Defining Minimum and Maximum Charge If the charge is a percentage of the transaction amount in the case of charge on turnovers for example you can indicate the minimum and the maximum charge that you would like to levy When charges are calculated for an account on which you apply the product the values that you enter here will determine the actual charge that is applied on the account The following
38. account class es when creating the interest product However since the interest rate or tier structure based on which you want to calculate interest may be unique to an account class you can specify different values for each account class on which you apply the product The implications of applying the same product on several account classes are e Interest will be calculated for all the account classes the basis of the interest rule linked to the product e accounting entries generated will be posted to the GLs specified for the product e frequency with which interest is liquidated and accrued will be the same for all the account classes that defined for the product e You can define different UDE values for each account class on which you apply the product The definition of a general condition would be the most commonly used facility at your bank Defining Special Condition When you define interest attributes for an account itself rather than for the account class to which it belongs it is referred to as a Special Condition When maintaining an account in the Customer Account Maintenance screen you can opt to define special conditions for it If you opt to define special conditions for an account the general conditions defined for the Account Class to which the account belongs will NOT apply to this account Typically you would want to maintain a special interest condition for a special c
39. account class if an account belonging to the account class is unauthorized Example Ms Elizabeth Bennett opens a Savings Bank account on 31 March 1998 You assign the code BNKCUF AU1003 011 to this account On this account you apply a product SAUS that is linked to an Interest Rule CRINO1 While defining the preferences for SAUS you specify that interest should be liquidated on month ends for accounts linked to it The account is not authorized when the auto liquidation process is executed on 31 March 1998 On 31 March 1998 when mark the end of transaction input the IC Consistency Check will report that the account of Ms Elizabeth Bennett BNKCUF AU1003 011 has not been authorized You can liquidate interest for the day only after you authorize the account of Ms Elizabeth Bennett 10 2 2 Unauthorized Account Classes You cannot liquidate interest using the auto liquidation function when a class of accounts is unauthorized When you run the auto liquidation process for the day the IC Maintenance Consistency Check reports all unauthorized account classes which fall due for interest liquidation Before you run the auto liquidation function you must authorize all unauthorized account classes Similarly you cannot liquidate interest for an unauthorized account class using the ad hoc liquidation function 10 2 3 Unauthorized Currency Details You cannot liquidate interest using the auto liquidation function
40. advice for the benefit of the customer when the values of the UDEs defined for the interest rule change Generate UDE Change Advice You can opt to generate an advice for the benefit of the customer when the values of the UDEs defined for the interest rule change If you want to generate an UDE change advice tick the box in this field veld ORACLE 9 3 2 UDE Currency The UDE currency defined for the product in the Interest Product Preferences screen which you apply on the account is displayed in this field Note that the UDE values that you specify for the account in the subsequent fields will be taken to be in this currency Waive Interest More than one interest product may be applicable on an account at the same time You can temporarily stop applying an interest product on an account by waiving it You can achieve this by checking the box adjacent to Waive Interest The interest product that you have chosen in the Product field will cease to be applied on the account If you want to apply the product again on the account uncheck the box adjacent to Waive Interest Open More than one product may be applicable on an account at the same time You can temporarily stop applying a product on an account by closing it You can achieve this by removing the tick for the field open The product will cease to be applied on the account You can make the product applicable again by ticking the open bo
41. apply charges The amount that is charged may be different for different conditions For example you may want to apply charges on every extra account statement that has to be given to the customer When you define a Rule you specify exactly how such data is to be picked up for calculating either the interest or charge A Rule identifies the method in which interest or charges have to be calculated The data required to calculate interest and charges are broadly referred to as data elements Data elements are of two types e System Data Elements e User Data Elements Using the System Data Elements and the User Data Elements that you define for a rule you can create formulae Formulae connect SDEs and UDEs to give a result The result of a formula is the interest or charge that has to be applied on an account To use a metaphor SDEs and UDEs are the pillars on which an arch called formula rests Many arches combine to form a dome called Rule The things that you choose to put under a dome correspond to account classes or accounts themselves to which the rule applies oT ORACLE 6 2 You can build arches formulae to complete the domes rules that you are creating in the Formula Wizard screen Formula Wizard Formula 10f10 1 Ratio Type Condition Elements Functions Braces Operators You can define any number of formulae for a rule Building Blocks of Formulae Element T
42. called System Data Elements 3 1 ORACLE Data elements like the rate at which interest has to applied the tier structure based on which interest needs to be computed etc are called User Data Elements UDEs UDEs fall into three types e Rate e Amount e Number You can specify different values for a user data element For example you can apply different interest rates on the basis of the debit balance as follows e balances less than 0 upto 10 000 5 e balances between 10 000 and 20 000 7 5 e balances greater than 20 000 10 Using the System Data Elements and the User Data Elements you can create formulae to compute interest and charges In other words formulae connect SDEs to the UDEs to give a result which is the interest or charge that has to be applied A Rule therefore is made up of SDEs UDEs and Formula e 3 2 ORACLE 3 2 Maintaining Branch Parameters You can use the Interest amp Charges Branch Parameters screen for maintaining parameters related to Interest and Charges These parameters can be maintained for each branch of your bank You can invoke the Interest amp Charges Branch Parameters screen by also entering ICDBRMNT in the field at the top right corner of the Application toolbar and clicking the adjoining arrow button interest amp Charges Branch Parameters Maintenance Branch Code Liquidation Netting Branch Name Process Till System Date Next Working Day 1
43. can be used to check whether the CASA account is linked to a savings component of a contract for offsetting the interest You also need to define the purpose formula for calculating interest on the excess amount You can use SDE DEPOSIT AMOUNT for displaying the maturity amount based on interest capitalization Maintaining SDE for Tax Exemption Deposit Interest Retention Tax DIRT is payable on interest on deposits and accounts Customers belonging to certain customer categories can be exempt from paying DIRT For maintaining DIRT exemption for accounts you need to use the SDE provided for this purpose 4 10 ORACLE 4 2 3 4 2 4 By attaching this DIRT _TEST SDE to a rule building that rule into an interest product and attaching the product to an account class you can ensure that no DIRT is deducted from the interest on accounts under that account class You have to specify the parameters for this SDE in line with the parameters that you set for the other SDEs that you use to calculate interest in the same rule Maintaining SDEs for Computing TDS Oracle FLEXCUBE provides you the facility to compute TDS Tax Deducted at Source on interest earned for a customer The IC products are classified as Tax and Non tax product Non Tax products are used to compute the credit interest for the account and the Tax products are used to calculate the TDS amount and also book All the accounts belonging to product for which the check
44. can choose the product that you do not want to apply on the account and choose the Waive Charges option The General Condition will cease to apply on the account Closing General Condition More than one product may apply on an account class at the same time You can temporarily stop applying a product on an account class by closing it You can achieve this by removing the tick for the field open The product that you have chosen will cease to be applied on the account class You can make the product applicable again by ticking the open box This feature is useful when you have to temporarily or permanently stop the application of charges due to a condition Defining Special Condition When you define charge attributes for an account itself rather than for the account class to which it belongs it is referred to as a Special Condition Typically you would want to maintain a special charge condition for a special customer ORACLE 7 74 Example For Smart Current Money accounts in your bank you have specified that you would levy 3 of the turnover as charge Cavillieri and Barrett Finance Corporation has three accounts under this class Of these you want to charge only 2 5 of the turnover as charge for one account To achieve this you would define a special condition for the account on which you charge 2 5 while the other two would continue to fall under the general condition def
45. characters are taken as current branch ORACLE Branch This indicates the branch code for maintaining Interest and Charges User Defined Element Values It gets defaulted to the current branch The branch code is displayed based on the Common Branch Restrictions for ICRATES for your branch The branches that are allowed for your home branch are displayed in the option list for Branch Code This occurs only if ICRATES has been maintained as a Restriction Type in the Common Branch Restrictions screen If not all Branch Codes are displayed including the ALL option If your home branch is HO then the Branch Code option list displays ALL in addition to the list of branches allowed for your Home Branch If you try to maintain a UDE value for a specific branch the system will check if the UDE value has been first maintained with Branch Code ALL If it has not been maintained an error message will be displayed forcing you to first maintain the UDE value for the Branch Code ALL The Rate Code option list will show all the rate codes maintained in the IC Rate Code Branch Availability screen During UDE maintenance for a specific branch if the Rate Code chosen is not available for the specific Branch then a configurable override will be displayed Example IC Rate Code Branch Availability screen Rate Code Allowed branches RTCD1 000 001 RTCD2 002 Common Branch Restrictions screen Home branch Allowed bran
46. class the prevailing rate on the day of liquidation would be used to calculate interest for the next liquidation period of 45 days ORACLE 9 2 3 9 2 4 In case of current and savings accounts if you have selected this option it ensures that interest is applied based on special condition tariff during the first liquidation period and subsequently the latest effective general condition tariff will be applied Post first liquidation period when the general condition tariff is subject to change the revision of general tariff is not applied on the accounts Example Special season savings accounts is generally associated with the interest rate of 3 5 with the privilege that all accounts opened under this product suite will have additional interest rate of 0 5 for the first interest period say monthly Thus accounts opened on 01 Jan 2009 will have special interest tariff of 4 3 5 being general and 0 5 additional until January end Effective from 01 Feb 2009 interest applied on the account will be at 3 5 irrespective of any revision in the general tariff until account status is active i e when the general tariff is changed from 3 5 to 3 or 3 6 revision impact would not be there on accounts opened on 01 Jan 2009 Closing General Condition More than one product may be applicable on an account class at the same time You can temporarily stop applying a product on an account class by closing it You can achieve this by
47. code of the transaction is defined with Include for Account Turnover ADHOC Number of ad Account statements are normally generated at a STMT hoc Account specific frequency If you generate a statement Statements out of this frequency you can levy a charge NET Dr Turnover You can charge a customer on the basis of the TURNOVER debit turnover in an account This will return a DR value if the account is in debit else zero will be returned ORACLE NET Cr Turnover TURNOVER CR You can also charge a customer based on the net credit turnover in the account Sum of all credits the sum of all debits net credit turnover This will return a value if the account is in debit else a value of zero will be returned Turnovers will be applied on an account only if the transaction code associated with the credit entry is defined with IC Balance Inclusion option To recall when creating a product in the IC module you must first specify whether it is an Interest or a Charge product This is called the product type If the product type is Charges you have to specify the basis on which you would like to levy the charge In the Product Preferences screen you have to specify the liquidation related details for the charge product the account classes on which the product should be applied the frequency of liquidation the amount or rate of charge to be applie
48. customer account liquidates the charges on the liquidation ORACLE 7 5 7 6 Applying Charge Product on an Account You can apply a charge product on an account in two ways e linking an account class to a charge product thereby making the product applicable to all the accounts of the class This method of linking accounts is called the definition of a General Condition or e linking an account itself to the product This method of linking accounts is called the definition of a Special Condition Often you may calculate charges for several account classes using the same Charge Basis In such a case you can apply the same charge product on all the account classes In the Charge Product Preferences screen you can link a product to an account class es However since the actual charge values that you wish to apply on each account class may be different you can specify different values for each of the account class Defining General Condition When you apply a product on an account class currency combination in the Charge Product Preferences screen you define a General Condition The attributes that you have defined for the product will apply on all accounts belonging to this account class currency combination In the Charge Product Preferences screen you can also specify different charge values for each account class and currency combination on which you apply the product Thus though you apply the same produc
49. data elements or SDEs ORACLE Chapter 5 Giving UDE Values for a Condition explains the process of specifying actual values for user date elements UDEs for an account class and currency Chapter 6 Building Formulae explains how expressions or formulae can be constructed for the purpose of defining an interest rule Chapter 7 Defining Attributes specific to an Interest or Charge Product explains the definition of attributes specific to an IC product Chapter 8 Floating Rate Codes for IC Module explains how floating rate codes for the IC module are created and applied Chapter 9 Applying Interest Product on Account explains how you can apply an interest product to a customer account or an account class Chapter 10 Checking for Consistency in Data explains the IC Consistency Check Function and reports inconsistencies in maintained data Chapter 11 Daily Processing of Interest and Charges explains the interest and charges batch function which processes liquidations and accruals for each business day Chapter 12 Liquidating Interest Online explains the online interest liquidation function in the Interest and Charges module Chapter 13 Maintaining Interest Statement Details explains the maintenance of details pertaining to interest statements given to account holders Chapter 14 Annexure A Accounting Entries and Advices explains the suggested accounting entries that c
50. data in two ways e As an online query or e As areport When you seek information in the form of a display on the basis of certain parameters you perform a query Typically you would query the system to provide your customer with immediate information such as the interest accrued on an account the interest rates applicable etc 15 2 Online Queries You can access the following information in the form of on line queries e interest applicable on an account for a specific period and e interest rates and other UDE values applicable on an account 15 2 1 The Interest Applicable on an Account The IC online calculation function gives you the amount of interest applicable on an account for the current liquidation period You can get the interest applicable based on the following criteria for accounts in your branch e accounts linked to all products or e all accounts linked to selected products or e selected accounts linked to all products or e selected accounts linked to selected products or e selected account classes linked to all products or e selected account classes linked to selected products pap ORACLE Single account You can invoke the screen by typing the code ICDCALAG in the field at the top right corner of the Application tool bar and click on the adjoining arrow button interest amp Charges Single Account Online Calculation Branch Code Account No Clos
51. dated entry or the rate of the current period This can be achieved by closing a rate for an effective date The following example illustrates this concept You are on 31 March and your rate table has got rates for the following dates 01 March and 15 March You pass an entry back dated to 03 March For this transaction the rate applicable will be picked up in the following manner e Ifthe record for 01 March is open the rates applicable as of 01 March will be picked e Ifthe record for 01 March is closed the rate applicable as of 15 March will be picked ae ORACLE 8 2 2 Uploading IC Rates Oracle FLEXCUBE allows uploading of IC rates During the upload Oracle FLEXCUBE expects the following information to be present in the upload message e Branch Code e Rate Code e Currency If any of these values are missing for any record then the system will raise an error Validations All the validations are performed for the received fields Based on the data it identifies whether the request is creation or amendment For new records new maintenance is created else the details of the existing record are updated During the upload even if one record fails to process entire upload will get rejected a ORACLE 9 1 9 2 9 Applying Interest Product on Account Introduction You can apply an interest product on an account in two ways e By linking an account class to a product thereby making the product applicable t
52. details here Retention Period Specify a valid retention period for interest charges Next Purge On Specify the date from when you need to maintain the accrual details Next Purge For Specify the date till when you need to maintain the accrual details OD Writeoff GL You can maintain the following GL details here Bad Debit Expense GL Specify a GL for posting the debit interest and principal for Write off status of the OD account from the adjoining option list Suspense GL Specify a GL for posting the offset entry for Write off status of the OD account from the adjoining option list 3 4 ORACLE 3 3 Maintaining Rules for Interest and Charges You can define Rules in the Interest and Charge Rule Maintenance screens For a Rule you can define e the System Data Elements applicable e User Data Elements applicable e the formula e In addition to specifying how the SDEs and UDEs are connected through the formulae you also define certain other attributes for a Rule You can invoke the Interest and Charges Rule Maintenance screen by typing ICDRLMNT in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button BA Apply Interest Rule Id C On Account Opening Month Rule Description Primary Element az C On Account Closure Month ILM Parameters Integrated LM Integrated LM Type System Elements User Elements E Us
53. displayed based on the Common Branch Restrictions for ICRATES for your branch The branches that are allowed for your home branch are displayed in the option list for Branch Code This occurs only if ICRATES has been maintained as a Restriction Type in the Common Branch Restrictions screen If not all Branch Codes are displayed including the ALL option If your home branch is HO then the Branch Code option list displays ALL in addition to the list of branches allowed for your Home Branch If you try to maintain a UDE value for a specific branch the system will check if the UDE value has been first maintained with Branch Code ALL If it has not been maintained an error message will be displayed forcing you to first maintain the UDE value for the Branch Code ALL a ORACLE The Rate Code option list will show all the rate codes maintained in the IC Rate Code Branch Availability screen During UDE maintenance for a specific branch if the Rate Code chosen is not available for the specific Branch then a configurable override will be displayed Example IC Rate Code Branch Availability screen Rate Code Allowed branches RTCD1 000 001 RTCD2 002 Common Branch Restrictions screen Home branch Allowed branches 000 000 001 002 001 001 002 002 000 is the HO Branch User 1 with Home branch as 000 The Branch Code option list will display 000 001 002 an
54. each accounting entry with reference to the interest rule that was applied Example Interest Rule DRIN Description Debit Interest on the monthly maximum balance in your account SDE Max_Dr_Bal UDE Rate 1 When an Interest Statement is generated for an account that is linked to DRIN the Maximum Debit Balance on which the interest was applied and the rate of interest that you defined in the UDE Maintenance screen for the rule will be picked up during liquidation If you specified while defining the interest statement that the SDE and the UDE of the interest rule DRIN should be printed in the interest statement they will be printed along with their values Adjustment Transaction Code When maintaining interest statements you can identify the transaction code against which manual interest adjustment entries are posted All entries tracked against the particular transaction code will be reflected in the interest statement that is generated A list of transaction codes maintained in the Transaction Codes Maintenance screen is displayed in the option list positioned next to this field You can select the appropriate transaction code Identifying Values to be Printed An interest rule consists of SDEs and UDEs Using the SDEs and UDEs that you identified for a rule you can build formulae The result of a formula is an amount that is posted as interest or charge to an account When interest
55. following data e the principal the amount for which you want to calculate interest e period i e the number of days for which you want to apply interest e the rate the rate at which you want to compute interest Using the formula PNR 100 you can calculate interest for the account When you define a rule you define exactly how each of these components the principal the period and the rate is to be to be picked up from the account for calculating interest In the case of charges you may have to specify the conditions for which you would need to apply charges For example you may want to apply charges on the basis of the debit turnover in an account When you define a Rule to calculate the charge you have to specify how the debit turnover in the account has to be picked up and how the charge has to be applied 3 1 1 1 Data Elements The components required to calculate interest the principal period and rate are broadly referred to as Data Elements Data elements are of two types e System Data Elements SDEs e User Data Elements UDEs The balance in the account for which the interest has to be calculated the turnover of the transactions on which a charge has to be applied etc depend on the activities that take place in the customer account over a period of time This information is constantly updated in the system and is readily available for computation of interest or charges Data elements of this sort are
56. if a currency that you have maintained is unauthorized Typically such a situation would arise when you modify the financial details relating to a currency in the Currency Maintenance table and do not authorize it before you run the automatic interest liquidation function Authorize the reported currency before you run the automatic liquidation function again Example You have applied an interest product SUS1 to USD accounts in the Smart Save Money class of accounts On 31 March 1998 you modify certain details relating to USD in the currency table You do not authorize the modifications to USD in the currency table You cannot liquidate interest for 31 March 1998 until the changes in the currency table are authorized The IC Maintenance Consistency Check will report USD as an unauthorized currency 10 2 4 Details of Invalid Products or Rules You cannot liquidate interest for accounts that are linked to unauthorized products or interest rules Inconsistencies in data maintained for all product rule combinations will be reported by the IC Consistency Check function Inconsistent data for each combination will be reported under three heads ORACLE e Unauthorized product e Unauthorized rule e Invalid Accounting Entry setup Unauthorized product The IC Maintenance Consistency Check function reports all products that you have linked to an unauthorized interest or charge product You have to authorize any modification o
57. invoke the Interest and Charges Rate Input screen by typing ICDRATES in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button ORACLE Interest amp Charges Rate Input Currency Code 5 Branch Codex Rate Code Rates E Effeciive Date Rate Input By Authorized By Modification Date Time Date Time Number Authorized Open Branch Code If you are maintaining the IC rates for the rate code from the head office branch you can select the branch for which the attributes are being defined If you wish to maintain the rates for all branches you can select the ALL option in the Branch Code field to indicate this If you try to maintain a rate code for a specific branch the System verifies whether the Rate Code has been first maintained with Branch Code ALL If not maintained an error message is displayed forcing you to first maintain the Rate Code for the Branch Code ALL If you are maintaining the rates for the selected IC rate code from a branch other than the head office you can only select those branches that are found in the allowed list of branches for e The IC Rates Restriction Type ICRATES in the Common Branch Restrictions maintenance for the current branch e selected rate code for which rates are being maintained according to the IC Rate Code Availability maintenance In other words the opt
58. levy a debit interest on debit balances and so on Credit interest and debit interest are examples of the products that you can define 2 3 1 Advantages of Defining Product An interest rule is merely built with the logic to calculate interest You still have however to specify the accounts on which the logic has to be applied the types of GLs expense income etc and the GLs themselves to which you would like to post the accounting entries You can define such details for an interest product When you link an interest rule to an interest product and apply the product on an account interest will be calculated for the account using the interest rule and the accounting entries would be automatically posted to the GLs that you specify for the interest product 2 2 ORACLE 2 4 2 4 1 2 4 2 Defining Conditions You can apply an interest product on an account s in two ways e linking an account class to a product thereby making the product applicable to all the accounts of the class This method of linking accounts is called the definition of a General Condition e linking an account itself to the product This method of linking accounts is called the definition of a Special Condition Defining General Condition Often you may calculate interest for several account classes using the same interest calculation method In such a case you can apply the same product to all the account classes You can specify the
59. liquidation e All accounts that have interest due on or before the application date are picked up for processing e Accounting entries are passed as of the Value Date that you specify e verify funds option is not applicable for manual liquidation The System displays an override in case of insufficient funds You have the option of stopping or continuing the liquidation Liquidation both auto and manual will be in the order of the Liquidation Date If any interest is due from the previous period it will be liquidated first Example From To Due On Amount Amount Amount Date Date Due Settled Pending 11 6 ORACLE From To Due On Amount Amount Amount Date Date Due Settled Pending 1 Jan 31 15 Feb USD 100 USD 30 USD 70 Jan 1 Feb 29 15 USD 100 Feb March During the batch processed executed on 15 March the pending USD 70 for the period between 1 January to 31 January is liquidated Next the interest amount due for the period from 1 February to 29 February is liquidated Formula wise prioritizing is not done while processing i e if two debit interest formulae products are due on the same date the System will not follow any specified order in processing them 11 8 2 Processing Write off for the new Status When the status of an OD account changes to Write off then before triggering IC EOD batch the system triggers the status change batch at E
60. on the appropriate icon in the horizontal array of icons in this screen For an interest or charges product in addition to these generic attributes you can specifically define other attributes These attributes are discussed in detail in this chapter You can define the attributes specific to an interest and charges product in the Interest and Charges Product maintenance Main screen and the Interest and Charges Interest Product Preferences screen In these screens you can specify the product type and set the product preferences respectively For further information on the generic attributes that you can define for a product please refer the following Oracle FLEXCUBE User Manuals e Products e Settlements ORACLE Product Code The code of the Charge product for which you are defining preferences is displayed in this field Description Give an appropriate description for the Product Code defined Product Type First of all you should specify the type of product that you are creating You can either create e Interest e Charges Allowances e Consolidated Charges Interest Products If you are creating an interest product you must link the product to an Interest Rule that you have already maintained To recall an Interest Rule identifies the method in which interest is calculated When you apply this interest product on an account or account class interest will be calculated for the account according to the met
61. percentage to arrive at the actual basis amount on which tax needs to be computed The inverse of the same factor would then be applied to the calculated tax amount to arrive at the actual tax amount Booking Book Tax to Expense Account Indicate whether or not the tax on interest and charges should be processed as an Expense type of tax and booked into a Tax Expense account to be paid to the Government Tax Payable Currency Flag Specify the currency in which the tax on interest and charges should be paid Basis Amount Option Specify the rounding option for conversion of the amount to calculation currency It could either be Currency Default or Specific Currency Default indicates that the rounding details would be taken from the rounding parameters defined in the Currency Maintenance screen Specific indicates that the rounding parameter would be defined or picked up from the Tax Rule itself Method This field is enabled only if the Calculation Currency Rounding Option is selected as Specific Select either of the following options e Truncate e Round Up e Round Down e Round Near Truncate indicates that the amount would be rounded to the number of decimals specified for the currency Round Up indicates that the amount would be rounded up based on the number of decimals and the nearest rounding unit for the currency Round Down indicates that the amount would be rounded down based on the number of decim
62. period for which the accounts have a full amount block will not be included for calculation of dormancy days The accounts may be blocked either internally for being linked to loans availed by the customers or specifically at the customer s request For computing charges on accounts with dormant status you need to use the following SDEs available in the system e Ac Dormancv Davs As stated earlier charge will be computed based on the number of days the account was dormant in the current liquidation cycle e Ac Dormant This SDE will indicate whether the account is dormant or not depending on the dormancy period that you maintain You can then attach these SDEs to a charge computation rule maintained through the Interest amp Charges Rule Maintenance screen interest amp Charges Rule Maintenance 9 Enter Query Apply Interest Rule Id Rule Description On Account Opening Month On Account Closure Month Primary Element ILM Parameters F Integrated LM Integrated LM Tvpe z System Elements User Elements System Elements T User Elements Type Get Latest a Input Bv Authorized Bv Modification Number Bi Authorized Open Date Time Date Time Refer to the chapter titled Maintaining Interest Rules of this user manual for more details on defining a rule Subsequent to defining a rule you can create a formula to compute the charges The resul
63. rules that you have maintained in your bank You can choose to retrieve information on all or select rules maintained For generating a report on select rules you should specify the From and To Rule IDs The details of rules falling in this range alphabetically will be generated To retrieve details of a single rule enter its Rule ID in both the From and To fields The Header Branch This is the branch through which you are logged in User ID The user id of the person who is generating the report is printed Module This is the module of the report Branch Date This is the current system date Date and Time This is the date for which you are generating the report The Body The report also includes the following information for each rule Rule ID Indicates the ID of the rule which when applied resulted in the matching of the entries Element This is the description regarding the element Language The selected language for communication Hdr The main header Maker ID The Login ID of the user who has performed the activity or event on the bill Frm No The reference number for the form Single Line This is the description regarding the single line Maker date This is the date on which the clause was entered 15 10 ORACLE stamp Checker ID This is the Login ID of the user who authorized the clause Checker date This is the date on which
64. specify a unique description for the transaction code Specifying the Transaction Type While maintaining the transaction code you can define the following types of transaction codes e Ley Amount the amounts specified for the external transactions will be in the local currency e ACY Amount amounts specified for the external transactions will be in the account currency e Count the system will base the external transaction on the basis of the count ma ORACLE 7 7 13 Booking of External Charges Through the External Transactions screen you can capture the data for NON Oracle FLEXCUBE related charges You can invoke the Interest amp Charges External Transaction Online screen by typing ICDCHONL in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button interest amp Charges External Transaction input Ti New Reference Number ccount Account Currency Transaction Code Description Booking Date Value Date Amount Count Remarks Input By Authorized By Modification Date Time Date Time Number Authorized Open Specifying the Reference Number In Oracle FLEXCUBE the reference number will be generated in a running sequence and is unique for each transaction Indicating the Account Select the customer account number from the option list for which you want to apply the charge The branch and the currency of the account are automat
65. the principal the amount for which you want to calculate interest e period the number of days for which you want to apply interest e the rate the rate at which you want to compute interest When you define a rule you define exactly how each of these components the principal the period and the rate is to be picked up from an account for calculating interest Then using the logic PNR 100 or any other for that matter you can calculate interest for the account Components of Interest Rule The components required to build an interest rule the principal period and rate are broadly referred to as data elements Data elements are of two types e System Data Elements SDEs e User Data Elements UDEs The balance in the account for which the interest has to be calculated depends on the activities that take place in the customer account over a period of time This information is constantly updated in the system and is readily available for computation of interest or charges Data elements of this sort are called System Data Elements Data elements such as the rate at which you would like to apply interest the tier structure based on which you would apply an interest rate etc are called User Data Elements UDEs UDEs fall into three categories 2 1 ORACLE 2 3 e Rate e Amount e Number You can specify different values for a user data element For example you can apply different interest rates on the basi
66. time of creating an IC product you would have already identified the Booking Account Type depending on the IC product type maintained in the Interest and Charges Product Definition screen If you have maintained the booking account type as Interest the Interest and Charge will be liquidated into the Interest Booking account By default the customer s account in the current branch will be displayed here However you can select a different interest account belonging to another branch also All the accounts maintained for the selected Interest Booking Branch will be displayed in the option list provided Select the appropriate interest account from this list Charge Booking Account At the time of creating an IC product you would have already identified the Booking Account Type depending on the IC product type maintained in the Interest and Charges Product Definition screen If you have maintained the booking account type as Charge the Interest and Charge will be liquidated into the Charge Booking account By default the customer s account in the current branch will be displayed here However if required you can select a different charge account that belongs to another branch as well All the accounts maintained for the selected Charge Booking Branch will be displayed in the option list provided for this field Select the appropriate charge account from this list Interest Start Date For the account for which you are defi
67. up from the accounts in the same manner However the numeric value for the rate can be different for each account class You can enter the actual values of the UDEs for each account class to which you link the product in the UDE Values Maintenance screen When interest is calculated for the account classes the principal period and the rate will be picked up in the same manner However the value of the rate that is to be applied on each account class will be different Example You have defined a product SAUSD1 While creating the product you linked it to the rule CRIN For CRIN you specified the SDE as Monthly Minimum Credit Balance and the UDE as Amount 1 Amount 2 Amount 3 Amount 4 Rate 1 Rate 2 Rate 3 and Rate 4 You have two classes of savings accounts Smart Save Money and Save Money You calculate interest for savings bank accounts based on the monthly minimum credit balance In the Product Preferences screen you can therefore apply SAUSDT to both these account classes since the interest calculation method is the same However the interest rates that you want to apply on each account class is different On Smart Save Money accounts you want to pay the following rates of credit interest Amount 1 gt 5000 gt 10000 15 Rate 1 Amount 2 gt 10000 gt 12500 15 5 Rate 2 Amount 3 gt 12500 gt 15000 16 Rate 3 Amount 4 gt 15000 16 5 Rate
68. uses the value you have define in this field to calculate the charge for turnover e Count the system will apply the value maintained in this field to derive the total count while calculation the charge System allows you to maintain negative and positive value in this field Negative value can be maintained for reversing a transaction The system stores the ACY value data only if you have defined transaction type as ACY amount for the transaction code and similarly the LCY value data is stored only when the transaction type is LCY amount Specifying the Remarks You can specify any remarks you think necessary for the external transaction you have defined This will be in free format text a ORACLE 8 1 8 Floating Rate Codes for IC Module Introduction A floating rate code for Interest and Charges rates is created at the head office branch as follows e rate code is created at the head office branch by giving it a unique identification and description in the IC Rate Code Branch Availability screen In this screen the rate code is made available for use in the required branches by maintaining an allowed disallowed list of branches e Atthe required branch in the Interest and Charges Rate Maintenance screen the rate associated with the rate code is specified along with an effective date Maintaining the rate in this screen is subject to whether maintenance of IC rates is allowed for the branch and also whether th
69. your branch all accounts or selected accounts 15 4 ORACLE Specifying the Destination You can direct the information to one of the following destinations e the printer e the screen as a display or e a spool file which can be printed later Select the required destination interest Calculation Details Interest Calculation Details Details For All Accounts O Selected Accounts 15 3 1 Contents of the Report The report provides the following information The Header Bank and This is the name of your bank and the branch through which you branch are logged in User id the user id of the person who is generating the report is printed Account this is the account number for which you are generating the report Number Branch Date this is today s date current Date and Time this is the date as of which you are generating the report Currency the currency of the account is included in the report The Body The report also includes the following information 15 5 ORACLE e every rule id applied on the account e description of the formula e built into each rule applied e the total value of the interest calculated formula wise 15 4 Liquidation Control List The Liquidation Control list provides details of all liquidations that were done for a period that you specify in the Liquidation Control list options You can invoke the screen by typing the
70. 00 e Interest rate 13 5 e Interest Basis Actual 360 e Penalty Interest 13 The interest rate of 13 5 will be applicable from the opening date and will remain constant for the term of the deposit Now we will calculate the interest and tax due on the deposit on a month end basis As on 31 October 2003 Number of days 22 from 10 Oct to 315 Oct Interest ason31 Oct 82500 00 10000000 13 5 22 36000 Tax at 1 825 82500 100 Interest earned 81675 82500 825 As on 30th November 2003 Number of days 30 Interest as 30 Nov 112500 10000000 13 5 30 36000 Tax at 1 1125 112500 100 PU ORACLE Interest earned 111375 112500 1125 As on 31st December 2003 Number of days 31 from 10 Oct to 315 Oct Interest ason31 Oct 116250 10000000 13 5 31 36000 Tax at 1 1163 116250 100 Interest earned 115087 116250 1163 As on 10th January 2003 Number of days 9 from 10 Oct to 31 Oct Interest on day of maturity 33750 10000000 13 5 9 36000 Tax at 1 338 33750 100 Interest earned 33412 33750 338 Total interest booked 341549 81675 111375 115087 33412 Now 5 January Mr Silas Manner decides to close the deposit will be charged a penalty at 13 The penalty is calculated as follows Penalty Interest Deposit Amount Days Penalty Rate 100 Days in year 10000000 87 13 100 365 309863 0
71. 1 Therefore the customer will be charged a penalty interest of 309863 01 due to the preclosure The tax collected till date will be refunded So an amount of 3113 00 825 1125 1163 will be refunded to Mr Silas Manner 7 2 1 4 Generating Customer Notice for Debit Interest Credit interest is liquidated and credited to the account by the System on the liquidation date which may be the end date of the interest period or a deferred date depending on your choice Debit interest is also calculated on the liquidation date If you have specified for an Account Class that debit interest notices have to be generated then the debit interest is not liquidated immediately but tracked in a Receivable GL for manually debiting to the customer account at a future date You need to specify the Receivable GL to be used for this purpose If you do not then interest for a particular period is liquidated with the value date as the first day of the next period irrespective of your preference for deferring liquidation ere ORACLE The functionality of tracking Debit interest in the Receivable GL is explained earlier in this chapter under the heading Receivable General Ledger to store debit interest on Customer Accounts 7 2 2 Repopulating UDE Values at Rollover For the account class and currency you can specify whether you want to repopulate the rates during a rollover of the Term Deposits If you opt for this option the system will use the latest av
72. 12 0 31 Jan 98 13 0 These rates will be applicable for the following periods Period Interest Rate 01 Jan to 13 Jan 98 12 5 14 Jan to 30 Jan 98 12 0 31 Jan to one day before the rate is changed 13 0 Note the following e The Effective Date for a particular rate should be later than the Effective Date of the first rate that you have maintained for the Rate Code e dates from which the debit and credit rates are effective can be different e There can be only one rate for an Effective Date e The same rate cannot be entered for two consecutive dates for a Rate Code e Note that only if you defined the application periodicity for the rule to which you link a product as daily will the changes in rate apply for accounts linked to the product If the application periodicity is periodic the rate as of the liquidation date will be applied ORACLE 5 1 6 Closing Rate for Date 5 2 This feature may be used if you do not want to use a rate for back dated processing done past the date For example you are on 31 March 1998 and your rate table has got rates for 01 March 1998 15 March 1998 and 31 March 1998 If you close the rates for 01 March and 15 March any back dated processing that is done today or subsequently the rates defined for 01 March or 15 March will not be used The rate as of 31 March will be used You will recall that subsequent to the definition of an interest product you will associate the
73. 1998 By checking the box adjacent to On Account Opening Month you can indicate that interest has to be applied from 10 April 1998 the Account Opening Date If you leave the box unchecked interest will be applied only from 01 May 1998 When you do not check the box against the Account Opening Month you indicate that the days in April should be ignored while calculating interest for the account This will be true even if the account was opened on the 01 April That is interest will be applied for the account only from 01 May 1998 The account closure date is 10 April 1998 By checking the box adjacent to On Account Closing Month you can indicate that interest has to be applied upto 09 April 1998 If you leave the box unchecked interest will be applied only upto 31 March 1998 However while processing interest manually you have the option to specify a date till which you want to liquidate interest Maintaining ILM Parameters Integrated LM Choose this option if you want to use the product for Integrated Liquidity Management processing Integrated LM Type Select the type of System Account to which the product ought to be linked from the adjoining drop down list This list displays the following values e Pool Leader Indicates that the Rule will apply to Header accounts in a structure e Pool Reallocation Indicates that the rule will apply to Parent and Child Accounts below the Header Account 3 6 ORACLE 3 3 2
74. 365 days leap and non leap will be 365 If you specify that the actual days in a year should be used for calculation of interest days all calculations will be according to the number of calendar days in the year For example if itis a leap year 366 days will be taken as the total period In case you choose to consider each year as having 360 days all calculations will be based on this assumption Irrespective of the number of days in the relevant year according to the calendar the value will be calculated on the assumption that there are 360 days in the year In conclusion the number of days to be used for calculation of interest can be any of the following combinations e Actual Actual the actual number of days in a month Actual number of days in a year e Actual 360 e 360 Actual e 360 360 e 360 365 The following table illustrates how this is achieved in Oracle FLEXCUBE Days to be Specification in Oracle FLEXCUBE considered Actual Actual Click on Actuals in Days in a Month field Click on Actuals in Days in a Year field Actual 360 Click on Actuals in Days in a Month field Click on 360 days in Days ina Year field 360 Actual Click on 30 days in Days in a Month field Click on Actuals in Days in a Year field 360 360 Click on 30 days in Days in a Month field Click on 360 days in Days ina Year field 3 13 ORACLE Accruals Required Only
75. 4 On Save Money accounts you want to apply the following rates of credit interest Amount 1 gt 1000 gt 2000 9 Rate 1 Amount 2 gt 2000 gt 2500 11 Rate 2 Amount 3 gt 2500 gt 3000 12 Rate 3 Amount 4 gt 3000 14 Rate 4 Now in the UDE Maintenance screen you can maintain separate records for each of these account classes The record that you maintain would contain the actual values of the UDEs for each account class When interest is calculated for Smart Save Money accounts the actual values for Amount 1 Amount 2 Amount 3 Amount 4 Rate 1 Rate 2 Rate 3 and Rate 4 will be picked up from the record that you have maintained for Smart Save Money the UDE Maintenance Screen Similarly when interest is calculated for Save Money accounts the actual values for Amount 1 Amount 2 Amount 3 Amount 4 Rate 1 Rate 2 Rate 3 and Rate 4 will be picked up from the record that you have maintained for Save Money the UDE Maintenance screen GAL ORACLE For each condition defined for a product you should maintain the UDE values If not the system will report an inconsistency in data maintenance Product Code Every product that you create is linked to a rule When you build a rule you identify the UDEs that would be required to calculate interest or charges You do not give the UDE a value This is because you can link a rule to many products and apply a p
76. 8 7 6 9 7 7 If there is no slab or tier structure specifv a big amount in the Slab Tier field in the Amount window and specifv the rate For such a situation it is immaterial whether vou select slab or tier as the amount basis Closing Condition More than one product mav be applicable on an account class at the same time Vou can temporarily stop applying a product on an account class by closing it You can achieve this by unchecking the field open The product will cease to be applied on the account class You can make the product applicable again by checking the open box Waiving General Condition for Specific Account Many General Conditions can be defined for an account class For example you could define a condition by linking two different charge products one for extra account statements generated and another on the basis of turnovers to an account class Both products will be applied on all the accounts belonging to the account class You can however waive a product from being applied on an account This would mean that of all the General Conditions defined for an account class you do not want to apply one or more products to a specific account Continuing with the example for a specific account you could waive the application of charges on turnovers The Procedure In the Customer Accounts screen you need to click on the Charges button You can view the Account Level Charges screen You
77. Adjustment Charge Jan 6 000 6 000 03 180 Feb 4 000 4 000 03 120 10 000 10000 4000 03 180 0 March 5 000 5 000 02 100 15 000 15 000 5 000 02 180 120 100 The rate applied for Month of March is 2 which is determined on YTD amount 15 000 and adjustment is also calculated on the same rate The YTD volume is calculated from start of the financial year maintained at bank level till cycle Liquidation date month end date A ORACLE Specifying the amount tags For YTD type of products you need to maintain the following amount tags for CLIQ event e CLIQ_ADJ the adjustment entries are calculated applying the YTD volume The amount tag will be the same for negative adjustment entries e CLIQ_NADu the adjustment entries are passed only if the adjustment amount is negative and the absolute value is used e CLIQ_PADJ the adjustment entries are passed only if the adjustment amount is positive with CHARGE tag entries you can maintain entries for either for CLIQ ADJ or for CLIQ NADJ and CLIQ PADJ for CLIQ event You cannot maintain entries for both For YTD calculation the system applies only the current rate since there can be a change in the rate All the parameters free items minimum balance etc are applied to YTD volume 7 3 4 2 Charge Basis for Maintenance Type of Charges You can apply different charge basis for positive pay instructions using the following tags
78. CR CREDIT Advices No advices allowed for this event 14 2 8 2 ILIQ Interest Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator ICDB BOOK 2 ILIQ DEBIT ICDB PNL 2 ILIQ CREDIT ICDB PNL 1 ILIQ DEBIT ICDB BOOK 1 ILIQ CREDIT ICDB ACQUIRED 1 IACQUIRED DEBIT ICDB BOOK 1 IACQUIRED CREDIT 14 7 ORACLE Accounting Role Amount Tag Dr Cr Indicator ICDB BOOK 2 IACQUIRED DEBIT ICDB ACQUIRED 2 IACQUIRED CREDIT ICDT ACR ADJ 1 IACR ADJ DEBIT ICDT PNL ADJ 1 IACR ADJ CREDIT ICDT ACCR 1 ILIQ CREDIT ICDT PNL 2 ILIQ CREDIT ICDT BOOK 1 ILIQ DEBIT ICDT BOOK 1 IACQUIRED DEBIT ICDT BOOK 2 IACQUIRED DEBIT ICDT ACQUIRED 2 IACQUIRED CREDIT ICDT ACQUIRED 1 IACQUIRED CREDIT ICDT BOOK 2 ILIQ DEBIT ICDT TPBL 3 TAX CREDIT ICDT BOOK 3 TAX DEBIT ICDX ACR_ADJ 1 IACR_ADJ DEBIT ICDX PNL ADJ 1 IACR ADJ CREDIT ICDX ACCR 1 ILIQ CREDIT ICDX BOOK 1 ILIQ DEBIT ICDX BOOK 1 IACQUIRED DEBIT ICDX ACQUIRED 1 IACQUIRED CREDIT ICMA PNL 1 ILIQ DEBIT ICMA PNL 2 ILIQ DEBIT ICMA BOOK 2 ILIQ CREDIT ICMA BOOK 1 ILIQ CREDIT 14 8 ORACLE Accounting Role Amount Tag Dr Cr Indicator ICMA BOOK 2 IACQUIRED CREDIT ICMA ACQUIRED 2 IACQUIRED DEBIT ICMA BOOK 1 IACQUIRED CREDIT ICMA ACQUIRED 1 IACQUIRED DEBIT ICMI PNL 2
79. E CREDIT Advices No advices allowed for this event 14 2 6 2 UDCH UDE Values Change No accounting entries allowed for this event Advices Advice type Description UDECA 14 5 ORACLE 14 2 7 Charge Basis TURNOVER 14 2 7 1 Accounting Entries CLIQ Charges Liquidation Accounting Role Amount Tag Dr Cr Indicator CHG_BOOK CHARGE DEBIT CHG_INCOME CHARGE CREDIT Advices No advices allowed for this event 14 2 7 2 UDCH UDE Values Change No accounting entries allowed for this event Advices Advice type Description UDECA 14 2 8 Accounting Entries and Advices for Interest 14 2 8 1 Accounting Entries IACR Interest Accrual Accounting Role Amount Tag Dr Cr Indicator ICDT ACCR 1 IACR DEBIT ICDT PNL 1 IACR CREDIT ICDX ACCR 1 IACR DEBIT ICDX PNL 1 IACR CREDIT ICMI ACCR 1 IACR CREDIT ICMI PNL 1 IACR DEBIT ICOD ACCR 5 IACR DEBIT ICOD PNL 4 IACR CREDIT ICOD ACCR 4 IACR DEBIT 14 6 ORACLE Accounting Role Amount Tag Dr Cr Indicator ICOD PNL 5 IACR CREDIT ICQC ACCR 1 IACR DEBIT ICQC PNL 1 IACR CREDIT ICQC ACCR 3 IACR CREDIT ICQC PNL 3 IACR DEBIT ICQC ACCR 4 IACR DEBIT ICQC PNL 4 IACR CREDIT MNS1 PNL 1 IACR CREDIT MNS1 ACCR 1 IACR DEBIT MNS2 ACCR 1 IACR DEBIT MNS2 PNL 1 IACR CREDIT Expense IACR DEBIT Paid in advance IA
80. EN e EE E ER 7 52 FLOATING RATE CODES FOR IC MODULE seesseeseserseeceesosoeseseeceeosoeseseseecesorosoeseeecoeroroeseseseeessoroeseseeeee 8 1 8 1 INTRODUCTION iii ua a na NE EEEE EEE TAEAE ERRE EE OEE 8 1 8 1 1 bovina bis g a sa NE p G ONES EA 8 2 8 2 MAINTAINING FLOATING RATES FOR IC RATE 8 2 8 2 1 Closing Rate nonnii e EEE aa EE E NE EEN ES 8 6 8 2 2 8 7 ORACLE 9 APPLYING INTEREST PRODUCT ON ACCOUNT cscsssssssssssrsssssssrsesssssnsesssssnsessssnsessssnsssssensesseses 9 1 9 1 INTRODUCTION iii eppi fetes aa ses fa yess 9 1 9 2 DEFINING GENERAL CONDITION ii Se 9 1 9 2 1 Waiving General Condition for Specific 9 2 9 2 2 Repopulai 9 2 9 2 3 Closing General Conditio Babe 9 4 9 2 4 toed 9 4 9 2 5 Defining Effective Date for Rate Code 9 5 9 2 6 CLOSING Rate Jor e Sa pe 9 6 9 2 7 Giving UDE Values for General 9
81. ILIQ CREDIT ICMI BOOK 2 ILIQ DEBIT ICMI ACCR 1 ILIQ DEBIT 1 ILIQ CREDIT ICMI BOOK 2 IACQUIRED DEBIT ICMI ACQUIRED 2 IACQUIRED CREDIT ICMI PNL_ADJ 1 IACR_ADJ DEBIT ICMI BOOK 1 IACQUIRED CREDIT ICMI ACQUIRED 1 ICMI ACQUIRED 1 DEBIT ICMI ACR_ADJ 1 IACR ADJ CREDIT ICOD ACR ADJ 4 IACR ADJ DEBIT ICOD PNL ADJ 4 IACR ADJ CREDIT ICOD ACR ADJ 5 IACR ADJ DEBIT ICOD PNL ADJ 5 IACR ADJ CREDIT ICOD ACCR 5 ILIQ CREDIT ICOD BOOK 4 ILIQ DEBIT ICOD ACCR 4 ILIQ CREDIT ICOD BOOK 5 ILIQ DEBIT ICOD BOOK 4 IACQUIRED DEBIT ICOD ACQUIRED 4 IACQUIRED CREDIT 14 9 ORACLE Accounting Role Amount Tag Dr Cr Indicator ICOD BOOK 5 IACQUIRED DEBIT ICOD ACQUIRED 5 IACQUIRED CREDIT ICQC ACR ADJ 1 IACR ADJ DEBIT ICQC PNL_ADJ 1 IACR ADJ CREDIT ICQC ACR_ADu 3 IACR ADJ CREDIT ICQC PNL ADJ 3 IACR ADJ DEBIT ICQC PNL_ADJ 4 IACR ADJ CREDIT ICQGC ACR ADJ 4 IACR ADJ DEBIT ICQC ACCR 1 ILIQ CEBIT ICQC BOOK 1 ILIQ DEBIT ICQC PNL 2 ILIQ CREDIT ICQC BOOK 2 ILIQ DEBIT ICQC ACCR 3 ILIQ DEBIT ICQC BOOK 3 ILIQ CREDIT ICQC ACCR 4 ILIQ CREDIT ICQC BOOK 4 ILIQ DEBIT ICQC BOOK 1 IACQUIRED DEBIT ICQC ACQUIRED 1 ACQUIRED CREDIT ICQC BOOK 2 IACQUIRED DEBIT ICQC ACQUIRED 2 IACQUIRED CREDIT ICQC BOOK 3 IACQUIRED CREDIT ICQC ACQUIRED 3 IACQUIRED DEBIT ICQC BOOK 4 IACQUIRED DEBIT ICQC ACQUIRED 4 IACQUIRED CREDIT 14 10 ORACLE Ac
82. Interest and Charges Oracle FLEXCUBE Universal Banking Release 12 0 May 2012 Oracle Part Number E51527 01 ORACLE FINANCIAL SERVICES ORACLE Interest and Charges Table of Contents 1 ABOUT THIS MANUAL ju cccccescscssccssencsscsssscsesssnsesssnessssnessessesssssssnsssssnessssnessesssssessosenesssssessessessosenese 1 1 1 1 INTRODUCTION fe tn d 1 1 L2 AUDIENCE 1 1 1 3 ORGANIZATION be e see see ta 1 1 1 2 RELATED DOCUMENTS AS EEN VESE 1 2 IG OSSARX OF ICONS E ESERSE AE EES A 1 2 2 AN OVERVIEW OF INTEREST AND CHARGES MODULE sesnosnnsnnznnennseneneenoenneenonneeneemeensemeen 2 1 2 1 INTRODUCTION ong eceectsesecbicsnceveestesdcuesecevestes sa 2 1 2 2 DEFINING INTEREST RULE wes ERKENE SRECE I EREE OESS 2 1 2 2 1 Components Of Interest Rule E EE E 2 1 2 3 WHAT IS PRODUCT scssesscasccscsscsscscscssetacsvasndoveossestastesess vessestaosesscascestensaostssess vestevasecsssesace sasstiocaasestssspuesdsessts 2 2 2 3 1 Advantages of Defining 2 2 2 4 DEFINING CONDITIONS
83. It could be either of the following e Truncate e Round Up e Round Down e Round Near Truncate indicates that the amount would be rounded to the number of decimals specified for the currency Round Up indicates that the amount would be rounded up based on the number of decimals and the nearest rounding unit for the currency 3 16 ORACLE Round Down indicates that the amount would be rounded down based on the number of decimals and the nearest rounding unit Round Near indicates that the amount would be rounded up or down based on the number of decimals and the nearest rounding unit Decimals This field is enabled only if the Calculation Currency Rounding Option is selected as Specific Specify the number of decimals up to which the rounding truncation has to be done The rounding decimals defined here should be less that or equal to the decimals defined in the Currency Maintenance screen Units This field is enabled only if the Calculation Currency Rounding Option is selected as Specific Specify the unit up to which the amount needs to be rounded The unit defined here must be a multiple of the unit defined in the Currency Maintenance screen The expression for the SDEs can be viewed by clicking Formula Wizard button You can build expressions for SDEs using Formula Wizard screen Formula Wizard Formula Wizard Element Functions Operators Logical Operators 3 3 5 A
84. OTI stage When the status of an OD account changes to Charge off then the system processes Write off as follows e Liquidates the interest accrued till date into the OD account e Reverses interest income for the current financial year or reverse income days whichever is least e Marks principal amount as bad debit e Automatically transfers balance amount of OD account if Reporting Line is maintained 11 8 3 Processing Recovery of OD Account To recover OD account then before processing status change batch the system triggers ICSOD at EOTI stage The ICSOD batch updates the paid interest for the recovery transaction done on a day in data store If total recovery is processed for the OD account then you can process online liquidation of the accrued interest and post the recovery transaction on OD account from Online Liquidation screen ORACLE 12 1 12 2 12 Liquidating Interest Online Introduction You can liquidate interest for an account e periodically e hoc basis Monthly quarterly semi annual and annual liquidation of interest are examples of periodic liquidation You can liquidate interest for an account according to the frequency or the liquidation cycle defined for the Product Rule combination to which the account is linked For example if you specified a quarterly liquidation cycle interest would be liquidated once in three months if you specified a monthly cycle intere
85. PAY 2 ORACLE Charge Basis Describes TURNOVER You can charge on the basis of the turnover in an account You can opt to levy charges on turnovers exceeding a certain amount An SDE based on turnovers will be applied on an account only if the transaction code of the transaction is defined with Include for Account Turnover ITEM COUNT If the number of transactions during a liquidation cycle exceeds a certain number you can levy a charge An SDE based on turnovers will be applied on an account only if the transaction code of the transaction is defined with Include for Account Turnover ADHOC STMT Account statements are normally generated at a specific frequency If you generate a statement out of this frequency you can levy a charge NET TURNOVER DR You can charge a customer on the basis of the debit turnover in an account This will return a value if the account is in debit else zero will be returned NET TURNOVER CR You can also charge a customer based on the net credit turnover in the account Sum of all credits the sum of all debits net credit turnover This will return a value if the account is in debit else a value of zero will be returned Turnovers will be applied on an account only if the transaction code associated with the credit entry is defined with IC Balance Inclusion option YTD Basis For processing charges for al
86. PREFERENCES FOR CHARGES 7 19 7 3 1 Specifying Liquidation Related 5 7 22 7 3 2 Liguidating Charges irka sues 7 22 7 3 3 Liquidating Charges Ad BASIS ionainn e ta 7 23 7 3 4 Charge Basis in Ordcle FLEX CUBE 7 25 7 4 PREFERENCES FOR CONSOLIDATED CHARGES PRODUCTS c cccsssssesssessesssseseeesseeaseessecaseessacaseessasaseesiaeas 7 30 7 5 APPLYING CHARGE PRODUCT ON AN ACCOUNT 7 32 7 6 DEFINING GENERAL CONDITION 7 32 7 6 1 Specifying Number of Free Items or 7 33 7 6 2 Specifying Char ge Applicable c cssiesisciiccvivedssiesnoseeiporeduscbeeesicestvevestwssvceevoasedeecbrsetvectoscesstevendeetvaned enys 7 33 7 6 3 Charging on Basis of Slab and Tier Structures ss sseeeneennennnnnzznnnnenzznnnnnzzznnznanzzznnnenazznnzznni 7 33 7 6 4 Defining Minimum and Maximum Charge 2 7 34 7 6 5 Identifying Suspense GL to Store Charges on Customer 7 35 7 6 6 Specifying Charge Values iss u o 7 35 7 6 7 Closing CONAIMON
87. RO1 and CRIN will also be reported as invalid because you have not specified the accounting role and head for the tax entry that would now be generated Solution Authorize the changes to the interest rule CRIN In the Product Accounting Role Definition screen add the following accounting role Tax depends on the name you give your tax scheme Identify the accounting heads as customer account since he would bear the tax e tax payable GL In the Product Events Definition screen indicate that for the event interest liquidation you would debit the tax amount from the customer s account and credit the tax payable GL of the bank Importantly authorize the product PRO1 after you modify the product details 10 2 5 Unauthorized General Conditions All unauthorized changes to any General Condition that you have defined will be reported by the IC Consistency Check You will recall that when you define preferences for a product you can indicate if you wish to apply the product to a specific account or to an account class or classes When a product is applied on an account class rather than a specific account it is referred to as a General Condition ORACLE The account class the currency of the account class the product to which the account class is linked and the unauthorized UDE values will be reported ORACLE 11 1 11 Daily Processing of Interest and Charges Introduction
88. The interest and charges batch function processes liquidation s and accruals for the day This process should be executed after the end of transaction input has been marked for the day for your branch For those accounts marked for auto liquidation and accrual the End of Day process e Passes liquidation entries e Passes accrual entries e Reverses accrual entries if there have been changes to the data relating to interest or charges Maintenance Consistency Checks When you mark the end of transaction input for the day the IC Maintenance Consistency Check reports any inconsistencies in the data that you have maintained The IC Maintenance Consistency Check reports the following inconsistencies in data e unauthorized accounts e unauthorized account classes e unauthorized currencies e unauthorized products e unauthorized rules e invalid account entry setup e unauthorized General Conditions Liquidating Interest Automatically You will recall that you can liquidate interest for accounts either e automatically lt lt onanad hoc basis If you opt to liquidate interest automatically you must specify the liquidation date and frequency for the product in the Product Preferences screen which you apply on the account s On the scheduled liquidation date interest will automatically be liquidated by the IC End of Day process for the accounts If the interest liquidation day falls on a holiday interest for those accounts tha
89. able then the UDE maintained for the ALL record would be used for applying General Conditions during IC calculations IC Rate pickup would search for the IC Rate maintained for a specific branch If this were not available it would search for the ALL record Rate Change Advice would search for the UDE Maintenance for a specific Branch If this were not available it would search for the ALL record 9 4 2 Details for Deposit types of Account Click Deposit tab in the TD Accounts Maintenance screen to specify deposit preferences 5 ORACLE TD Accounts Maintenance New Branch Code Term Deposit Account Number Term Deposit Currency SD User Reference Customer No Customer Name Account Class Nominee check List Dual Currency Deposit Term Deposit Amount Deposit Tenor Computed Amount Mode of Operation Pay In Details 14 lt 10m gt Account z lt C Term Deposit Pay In Option Account Type Auto Rollover Close on Maturity Move Interest to Unclaimed Move Principal to Unclaimed Maturity Date Next Maturity Date Interest Rate Maturity Amount A Percentage Cornoute Offset Branch Offset Account Pay In Option Others Clearing Type Cheque Instrument No Cheque Date Drawee Account Number Routing No Rollover Type Principal Special Amount Interest Principal Interest Rollover Amount Stock Catalog Code Cer
90. account When calculating the debit turnover the credit transactions involving the account would not be considered If there are say two debit transactions in an account in a day the debit turnover for the day would be the sum of the two irrespective of the credit transactions involving the account on that day The same concept applies to credit turnovers also You could have monthly debit or credit turnover also Going back to the example the booking dated debit turnover in the account for the month of March is 130 000 That is the sum of the following debit transactions in the course of the month 03 March 1998 30 000 10 March 1998 50 000 25 March 1998 NIL 30 March 1998 50 000 The booking dated credit turnover in the account for the month of March is 110 000 That is the sum of the following credit transactions in the course of the month 4 5 ORACLE 03 March 1998 50 000 10 March 1998 NIL 25 March 1998 60 000 30 March 1998 NIL The value dated debit and credit turnovers will be calculated in a similar fashion Note that SDE based on turnovers will be applied on an account only if the transaction code of the transaction is defined with Include for Account Turnover Yes Type If you have indicated that the system data element is to be calculated on the turnover of an account you should specify the date to be used for calculation The cal
91. ailable rate maintained UDE for the account class and currency combination at the time of rollover Conversely the system will use the rates maintained initially for the deposit 7 3 Specifying Preferences for Charges Product The following types of charges can be processed on an account NUM ACCT Number of You can fix the number of regular periodic free STMTS Account account statements for a liquidation cycle For Statements every extra account statement that you issue you can levy a charge NUM CHQ Number of Every cheque that bounces is recorded in the RET cheques Cheques Returned file You can charge a returned penalty on every bounced cheque NUM CHQ Number of You can fix the number of free cheques that can ISS cheques issued be issued for a liquidation cycle For every extra cheque leaf issued you can levy a charge NUM STOP Number of Stop You can levy a charge for every stop payment PAY Payments instruction TURNOVER Turnover You can charge on the basis of the turnover in an account You can opt to levy charges on turnovers exceeding a certain amount An SDE based on turnovers will be applied on an account only if the transaction code of the transaction is defined with Include for Account Turnover ITEM COUNT Number of If the number of transactions during a liquidation transactions cycle exceeds a certain number you can levy a charge An SDE based on turnovers will be applied on an account only if the transaction
92. al entries were passed To recall one leg of the accrual entry is passed into a receivable or payable account while the other is passed to a profit or loss account 15 6 The Maintenance for Interest Statements Report You can generate an interest statement whenever interest due to a rule is liquidated In an interest statement you can have the various values reported under specific headings The Maintenance for Interest Statement report furnishes details of maintenance related activities carried out on interest statement headers for interest rules You can invoke this screen by typing the code ICRISFM in the field at the top right corner of the Application tool bar and click on the adjoining arrow button interest Statement Maintenance Report From Record Rule Id Formula Number To Record Rule Id Formula Number In the Interest Statements Maintenance Report screen enter the Rule ID and the Formula Number from which vou want to generate the report and the Rule ID and the Formula Number upto which vou would like generate the report 15 9 ORACLE 15 6 1 Contents of the Report The report contains the following information e formula and the description of the formula e SDE and the UDEs and their values e the language in which the interest statement is printed e the user who maintained the interest statement and the authorizer Printing details of rules You can print the details of the interest
93. ally or automatically This specification is defaulted from the Account Class linked to the account During liquidation ILIQ the Customer Account is debited and the Receivable GL is credited The Liquidation Reference Number is a combination of BRN Prod Currency L Formula number 11 4 ORACLE 11 8 1 1 Auto Liquidation Auto liquidation is performed as part of the IC BOD operations All accounts that have debit interest and or charges due on the application date are processed All pending liquidations are processed All account with interest amount due and or charges due where the Due Date is less than or equal to the Application Date are processed If the verify funds option is enabled for the account class of the account a check to verify the availability of funds is also performed In case there are funds to process the amount partially partial liquidation is also performed Remember to set up the IC BOD processing as a mandatory process It should be executed during the BOD processes for Interest Liquidation as well as Charge Liquidation 11 8 1 2 Manual Liquidation Manual liquidation for either debit interest or charges or both is triggered through the Interest and Charges Single Account Online Liquidation screen available in the Application Browser You can invoke the Interest amp Charges Single Account Online Liquidation screen by typing ICDLIQAG in the field at the top right corner of the Applica
94. als and the nearest rounding unit 3 15 ORACLE Round Near indicates that the amount would be rounded up or down based on the number of decimals and the nearest rounding unit Decimals This field is enabled only if the Calculation Currency Rounding Option is selected as Specific Specify the number of decimals up to which the rounding truncation has to be done The rounding decimals defined here should be less that or equal to the decimals defined in the Currency Maintenance screen Units This field is enabled only if the Calculation Currency Rounding Option is selected as Specific This represents the least amount that can be measured in a particular currency You need to specify the unit up to which the amount should be rounded The unit defined here should be a multiple of the unit defined in the Currency Maintenance screen Tax Amount Option Specify the rounding option for conversion of the amount to tax currency This could either be Currency Default or Specific Currency Default indicates that the rounding details would be taken from the rounding parameters defined in the Currency Maintenance screen Specific indicates that the rounding parameter would be defined picked up from the Tax Rule itself Method This field is enabled only if the calculation rounding option is selected as Specific Specify the method in which the rounding should be done for calculating the actual tax amount
95. amount e amount that can be used in the definition of formula e UDE as a number is typically used for a Rule where interest or charges are defined based on the number of transactions A UDE under this category can also be used to store a numerical value that may be used in a formula For example in the formula you would like to multiply an intermediate result with a certain number before arriving at the final result The certain number in the formula can be a UDE You can enter the actual values of the UDEs like the interest rate the upper limit for the tier etc in the IC User Data Element Maintenance screen This is because you can specify different values for each data element A rule can therefore be applied on different accounts since it just represents a method of interest calculation The following example illustrates this 3 7 ORACLE Example You have different current account classes one for accounts in the local currency CLC1 and one for accounts in GBP CBP1 The method in which you want to apply interest on both types of accounts is the same that is on the monthly minimum credit balance The other conditions that you want to apply on the account classes such as not applying interest for the account opening and closing months are also the same for all the accounts However the interest rates that you want to apply for CLC1 is 5 for CBP1 is 6 You can create one rule RULE 01 for example using
96. an be set up for the Interest and Charges module Chapter 15 Queries and Reports provides a list of queries and reports that can be generated in this module and also explains their contents 1 4 Related Documents e The Procedures User Manual e Settlements User Manual 1 5 Glossary of Icons This User Manual may refer to all or some of the following icons ORACLE Delete row Faz Option KIEN List 1 3 ORACLE 2 1 2 2 2 2 1 2 An Overview of Interest and Charges Module Introduction On the balance type of accounts maintained in your bank you would want to apply interest and charges Savings accounts current accounts nostro accounts etc are examples of balance type accounts Using the Interest and Charges IC sub system of Oracle FLEXCUBE you can calculate and apply interest and charges on these accounts Setting up the Interest and Charges sub system is a one time activity Once set up Oracle FLEXCUBE automatically computes and applies interest and charges on all balance type accounts in your bank In Oracle FLEXCUBE interest is calculated for all accounts using the interest rules that you define You can define the interest rules to suit the peculiar requirements of your bank Defining Interest Rule A Rule identifies the method in which interest has to be calculated For example to calculate interest for an account you would require the following data e
97. any of the following e Values for data elements like the balance in an account on which interest has to be applied e Number of transactions in a day Information such as the ones listed above is constantly updated in the system and is readily available for computation of interest They are therefore called SDEs As acorollary these values will necessarily be picked up by the system while applying interest You cannot for example indicate to the system that a certain amount should be picked up as the balance if that is not the balance in the account On the other hand you can indicate to the system that interest should be applied at a specific rate For a certain period you can indicate that interest should be calculated at five percent While for some other period you can indicate that interest should be applied at six percent Thus the interest rate is a value that you have control on and whose value you can specify Such elements are called User Data Elements UDEs Another example for UDEs is the tier or slab structure based on which interest has to be applied on an account since you would specify the slab and the tier structure SDEs and UDEs are used to build formulae that result in the amount of interest that has to be applied Example You pay interest on the minimum credit balance in a customer s account during the month Monthly Minimum Credit Balance is an example of an SDE You cannot provide the value for a
98. at the combination is for booking only the interest and charges will be calculated for the individual accounts When liquidation takes place the sum of interest and charges for all the accounts will be booked to a specified account Calculating Charges To calculate the charges that you would like to levy on an account you have to specify the basis on which you would like to apply charges For example you may want to apply charges on the basis of the debit turnover in an account When you define a Charge product you have to specify the Charge basis When you apply the charge product on an account or an account class charges for the account will be calculated on this basis The accounting entries would automatically be posted to the GLs that you specify for the charge product You can calculate charges for an account on the following bases e Number of Account Statements e Number of checks returned e Number of checks issued e Number of Stop Payments e Turnover e Number of transactions e Number of ad hoc Account Statements 2 4 ORACLE 2 8 2 9 For any charge basis you can define the number of items that should not be charged Thus you can apply a charge only if the number of account statements given to the customer exceeds a certain number and so on Other Features e At any point in the day can compute and not apply interest for an account or account class This facility enables you to answer an across the coun
99. at you have maintained for Smart Save Money the UDE Maintenance Screen Similarly when interest is calculated for Save Money accounts the actual values for Amount 1 Amount 2 Amount 3 Amount 4 Rate 1 Rate 2 Rate 3 and Rate 4 will be picked up from the record that you have maintained for Save Money the UDE Maintenance screen TE ORACLE You must maintain the UDE values for each account class and currency combination on which you apply a product If not the system will assume all UDE values to be zero Product Code Every product that you create is linked to a rule When you build a rule you identify the UDEs that would be required to calculate interest or charges You do not give the UDE a value This is because you can link a rule to many products and apply a product to many account classes for which interest or charge is calculated using the same method but which have different UDE values For each account class and currency on which you apply a product you should specify the values of the UDEs which you identified for the rule that is linked to the product in the UDE Values Maintenance screen The UDE values that you maintain here for a condition will be picked up when interest or charge is calculated for the account class Example When you create CRIN an interest rule you identify the SDE as Monthly Minimum Credit Balance and the UDE as Rate 1 At this stage you do not define the value of Rate 1 You l
100. automatic accruals should always take place on a month end Liquidation related details e frequency of liquidation e Whether interest should be applied right from the day the account is opened e date on which the first liquidation should be done for accounts linked to the product e Whether automatic liquidation s should always take place on a month end ce ORACLE To invoke the Interest and Charges Interest Product Preferences screen click Preferences button from the Interest and Charges Product Maintenance screen interest Product Preferences Product Code Description Accrual Accrual Day Frequency Cycle Calculation and Liquidation Days Months Year Reminder Frequency ILM Parameters Debit Interest Notification Receivable General Ledger Account Details 1010 Account Class UDE Currency Main interest Rate UDE Product Level Payment Method First Liquidation On Start Date Start From Account Refund Tax on Pre Closure Defer Liquidation Days OD interest reversible g Defer Before Month End Days ILM Product ILM Type Description Currency Special Condition Only Bearing Discounted Amount Block for Discount Liquidation at Month Ends Back Value Recalculation Flag Defer Liquidation Liquidation Before Month End Redemption Advice Required Repopulate atL You can apply a product to any number of accou
101. ay Sequence Number This is like the reference number for each transaction using which the batch processing is done This is getting generated in the back end using a sequence Submit Batch The intraday Sequence Number is also being displayed in the screen for the user to submit the batch When you click Submit button a message conveys that the process has been submitted for batch processing Microsoft Internet Explorer A Batch Submitted successfully for processing Refer the log for the status of the process Once the process is submitted the batch processing happens independently the back end without disturbing other activities in the front end 12 14 ORACLE 12 9 Processing Online Calculation for Single Account Online calculation for a single account can be processed via the Interest amp Charges Single Account Online Calculation screen You can invoke the Interest amp Charges Single Account Online Calculation screen by typing ICDCALAG in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button interest amp Charges Single Account Online Calculation Branch Code Account No Close Out Today Maturity Date Calculation From Date Calculation To Date 10f10 Product Close Out Maturity Formula Number Name Status Maturity Date Account Branch Account Currency Currency Account Summary 10710 0 Principal Balance
102. ays Specify number of days you need to reverse income for the IC product if you have checked Capitalize and Reverse Income check box During status change the system reverses Interest Income either for current financial year or for the reversal income days whichever is least PA ORACLE Accounting Role to Account Head mapping Accounting Roles are tags that identify the type of accounting entry that is posted to an accounting head which in turn refer to the different GLs and SLs maintained in your Chart of Accounts You can select the different heads and roles to which the accruals till date would be posted when the account moves to this status Further accruals will be posted to the account heads specified here if the account heads maintained for the next status is not different from the ones specified for the current status 7 7 7 Maintaining of Roles for Account To invoke Accounting Roles screen click Accounting Roles button from the Interest and Charges Product maintenance screen Accounting Roles Product Code Product Description Class Details Default From Class Class Code Class Description 1015 Accounting Role Role Description Account Head GL Description Product Code The code of the Charge product for which you are defining preferences is displayed in this field Description The description of the product for which you are defining the Accounting Roles and Heads will be
103. ble will also be picked up over this period For the other accounts the interest days would be 30 and the SDE values picked up would be for the entire 30 day period For a product you specify whether the account closing month has to be included for interest application Whether interest will be applied for the current month during ad hoc liquidation on 15 April in our example depends on this parameter for the product Interest for the current month will be applied during ad hoc liquidation only if the definition is that account closing month should be included for interest application If not the next automatic liquidation will process interest for the entire month Start Date The system displays the Start Date based on the First Liquidation Date and the Liquidation Frequency that you specify The Start Date that is displayed is the First Liquidation Date the Liquidation Frequency For example if you specified the First Liquidation Date as 31 January 2000 and the Liquidation Frequency as 1 Month the system will display the Start Date as 1 January 2000 First Liquidation On Once the liquidation frequency has been defined you should specify the First Liquidation Date The frequency and the date will be used to arrive at the first and subsequent dates of liquidation for the accounts linked to the product For example your quarterly liquidation cycle may be March June September and December and the liquidation is as of the month
104. box Include for TDS Calc is enabled will be taken for computing the TDS Three new SDEs are created for this purpose e TDS_AMOUNT e TOT_INT_AMOUNT e INTEREST_AMOUNT For computing TDS on interest earned for a customer you need to use the following SDEs available in the system e TDS AMOUNT the total TDS amount deducted from the customer account e TOT_INT_AMOUNT the total interest amount for the customer for the current financial vear This encapsulates the credit interest accrued across the customers account e INTEREST AMOUNT captures the interest amount for the period for the particular customer account This is the amount used for computing the TDS amount Bv attaching these SDEs to a rule building that rule into an interest product and attaching the product to an account class you can ensure that these SDEs are used in the formula for computing the TDS amount for accounts under that account class Vou have to specifv the parameters for these SDEs in line with the parameters that vou set for the other SDEs Refer to the chapter titled Building Formulae of this user manual for more details on creating a formula Maintaining SDEs for Computing Advance Interest Vou can maintain SDE for advance interest calculation on the withdrawal amount from the customer account All accounts belonging to a product for which the option Advance Interest in Notice Preferences screen is enabled are taken up for computing the A
105. calculated for the product After the discounting has been applied the Maximum and Minimum validations are performed oe ORACLE Alternatively the discount if any which is applicable can be specified as a percentage of the calculated consolidated charge amount Discount Percentage You can indicate the discount percentage if any which would need to be applied to the calculated charge After the discounting has been applied the Maximum and Minimum validations are performed The discount if any which is applicable can also be specified as a flat discount amount 7 7 6 Specifying Status Codes for Account At the time of defining an Interest Charge product you can maintain different status codes and specify parameters based on which accrual and application of interest charges will happen for the status of the account Status codes are maintained through the Status Control screen Click the Status Maintenance button in the Interest and Charges Product maintenance screen to invoke it Status Control Product Code Description Status Details 4 100f01 gt Status Description Transaction Code Stop IC Reverse Accrual a Capitalize and Reverse Income Reverse Income days Role to Head Mapping 1010 O Accounting Role x Accounting Head The following parameters may be maintained in this screen i ORACLE 7 7 6 1 Status Details Product Code The code of the Charge product for which you are
106. can charge the customer on the basis of the turnover of external transactions with a charge rate as 1 The turnover is always in the account frequency e ACCOUNT OPENING You can charge the customer at the time of opening an account Deposits The interest that applies on time deposits may vary with every deposit product you offer In Oracle FLEXCUBE interest on a time deposit and balance type accounts is calculated on the basis of the Interest Rules and Interest Products that are associated with the deposit account ORACLE To calculate and apply interest on a time deposit you have to set up an Interest product in the IC module Interest products are set up in the IC Product Definition screen Indicate that the IC product you are creating applies on deposit accounts by choosing the Deposit option in the Product Type For a deposit type Interest product you have to specify the Unclaimed Deposits GLs that should be used to move the principal and interest amounts of unclaimed deposits The Accounting Roles for the GLs are PRN UNCLAIMED and INT UNCLAIMED respectively In the Accounting Role Definition screen you have to map these roles to the appropriate Miscellaneous Credit GLs maintained In addition in the IC Product Events screen you have to specify the accounting entries for the event MAT For this event you have to specify all possible accounting entries that will be passed including the movement of unclaimed de
107. ccording to the interest rule definition For the account for which you are defining special conditions choose the product s that you wish to apply To recall you can define a Special Condition for an account only if the account class of the account has a General Condition defined for the product Thus the picklist from where you select the product for which you want to define a Special Condition will contain products that satisfy the following conditions e aGeneral Condition has been defined for the product and account class combination e product has been defined as a special conditions only product The interest rule that is linked to the product s will determine the interest that is applied on the account You may want to apply more than one interest product on an account For example you may want to pay credit interest on the credit balance maintained in a current account and levy a debit interest if the account lapses into a debit balance In order to achieve this you would have to apply two products one defined for credit interest and another defined for debit interest In this screen you can choose the interest products that you want to apply on an account The UDE currency defined for the product in the Interest Product Preferences screen that you apply on the account is displayed Note that the UDE values that you specify for the account subsequently will be taken to be in this currency You can opt to generate an
108. ccruals F Accrual Frequency PRODUCT_DESCRIPTION Rule I User Element Amounts Currency F RULE DESC F DESCRIPTION 21xi 4 In the screen which appears as shown above select a checkbox to have the corresponding field in the print out Then click arrow seen alongside to view the screen below Product code Account class Currency code Effective date Branch code Maker id Maker date stamp Checker id Checker date stamp Modification number Record status Authorized status Once authorized Interest and Charges User Data Element Maintenance TDAA TIMDPT USD 2000 07 03 ALL wat 2000 07 03 15 15 07 wet 2000 07 03 15 15 08 x 0 gt 2a Interest and Charges User Data Element Maintenance Web Page Dialog 21xi Now once more select Print from the Actions menu in the Application tool bar or click print icon at the top left corner of this screen to print it out 5 13 ORACLE Specifying the Branch Code Specify the branch code for the UDE values you wish to print Select a branch code from the option list provided The branch code is displayed based on the Common Branch Restrictions for ICRATES for your branch The branches that are allowed for your home branch are displayed in the option list for Branch Code This occurs only if ICRATES has been maintained as a Restriction Type in the Common Branch Restrictions screen If not all Branch Codes a
109. ce screen Refer to the Core Entities User Manual for more details You can define custom fields UDFs User Defined Fields to maintain SSIA related information This information will be used for storing information and will not involve any processing The UDFs will be used to communicate the SSIA related information to the revenue department based on which your bank is reimbursed for the allowance made to the customers 20 ORACLE Refer to the User Defined Fields User Manual for more details on defining a custom field 7 7 12 Transaction Codes for Processing External Charges A Transaction Code is associated with each accounting entry in Oracle FLEXCUBE All external charges for billing have to be booked using external transaction codes For this you need to maintain a list of transaction codes that can be used for booking and calculation of external charges You can invoke the External Transaction Code Maintenance screen by typing ICDTRNCD in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Transaction Code Description Input Authorized By Modification Date Time Date Time Number Authorized Open Specifying the transaction code Specify a unique transaction code for external transactions Specify a unique identification for the transaction code you are creating This code will be used for external transactions You must also
110. ces for a Charge product you can opt to levy the charge on the basis of either e Slabs e Tiers Specifying Liquidation Related Details You should define liquidation related details as part of preferences for the Charge product that you are creating You can liquidate charges for an account e periodically e onanad hoc basis Liquidating Charges Periodically Monthly liquidation of charges levied on an account is an example of periodic liquidation If you opt to liquidate charges periodically you will automate the liquidation process The automatic processes that are generated at the end of day will liquidate charges for those accounts that are marked for liquidation Liquidation Periodicity If you opt to liquidate charges periodically you must specify the liquidation frequency The term liquidation frequency refers to the standard interval between successive periodic liquidations ka ORACLE 7 3 3 For the Charge product that you are creating select the liquidation frequency in other words the cycle from the adjoining drop down list This list displays the following values e Monthly e Quarterly e Half Yearly e Yearly Charges for all the accounts linked to the product will be liquidated automatically according to your specifications during the end of day processing on the day the liquidation is due If you opt to liquidate charges on a quarterly half yearly or yearly basis you must also specify
111. ch charges e DD NUM INIT This charge basis is used to tracking the number of new Direct Debit Agreements maintained for an account It is tracked on authorization for New operations for a Direct Debit Agreement that has been maintained e DD NUM AMND This charge basis is used to track subsequent amendments made respect of a Direct Debit Agreement It is tracked on authorization for Modify operations for a Direct Debit Agreement that has been maintained e DD NUM CLOSE This charge basis is used to track Closure of a DD Agreement on authorization e DD NUM REOPEN This charge basis is used to track Re open of a DD Agreement on authorization All of these charge bases are only tracked if the Charge Applicable option has been enabled in the respective DD Agreement maintenances For details regarding the maintenance and servicing of DD agreements refer the Payments and Collections module user manual 11 3 ORACLE 11 7 Processing of Consolidated Charges When the liquidation event LIQD is triggered for charge products linked to consolidated charge products charges are computed depending upon the rule associated but the corresponding entries are not posted Similarly for account classes linked to consolidated charge products charges are computed during liquidation LIQD but are not posted A consolidated entry comprising the charge entries for all linked charge products for all account classes us
112. ches 000 000 001 002 001 001 002 002 000 is the HO Branch User 1 with Home branch as 000 The Branch Code option list will display 000 001 002 and ALL If he chooses ALL the Rate Code option list will display RTCD1 and RTCD2 However if he is doing a specific maintenance for Branch 001 and he chooses RTCD2 then a configurable override will be displayed User 2 with Home Branch as 001 The Branch Code option list will display 001 If he chooses 001 the Rate Code option list will display RTCD1 If he chooses RTCD2 then a configurable override will be displayed oe ORACLE In this screen you can specify that the customer accounts e associated with a particular interest product e belonging to a particular account class e maintained in a specific currency e effective date from which interest rate is picked should be queried and retrieved for the application of new values for calculating interest It is not necessary for you to indicate all the three conditions For example if want to change the interest calculation parameters only for accounts belonging to a particular account class specify only the account class At the time of selecting the account class and currency the system will display only the account classes and currencies associated with the interest product this is only if you have specified an interest product You also need to specify the date from which the new values have to become effect
113. code ICRLIQR in the field at the top right corner of the Application tool bar and click on the adjoining arrow button Liquidation Control List Report From Date To Date Formula Type Report Format Printer At Report Output t Printer Vou can specifv the following parameters here From Date Specify the date from when you want to generate the Liquidation Control report from adjoining calendar To Date Specify the date till when you want to generate the Liquidation Control report from adjoining calendar Formula Type Select the type of formula used to calculate the interest from the adjoining drop down list This list displays the following values e Select if the formula type used is Tax e Select if the formula type used is booked 15 4 1 Contents of the Report 15 6 ORACLE The parameters specified while generating the report are printed at the beginning of the report Other content displayed in the Liquidation Control Report is as follows Header The following details are displayed in the header section Field Name Field Description Branch Indicates Branch Code and Branch Name User ID Indicates User ID Date amp Time Indicates the Date and Time when the report was generated Module Indicates module for which report is generated Period Indicates the from and to date between which the report is generated Formula Type Formula Type Booked or Tax
114. content hereof without obligation of Oracle Financial Services Software Limited to notify any person of such revision or changes All company and product names are trademarks of the respective companies with which they are associated
115. counting Role Amount Tag Dr Cr Indicator MNS1 BOOK 1 ILIQ DEBIT MNS1 BOOK 1 IACQUIRED DEBIT MNS1 ACQUIRED 1 IACQUIRED CREDIT MNS1 ACCR 1 ILIQ CREDIT MNS2 ACCR 1 ILIQ CREDIT MNS2 BOOK 1 ILIQ DEBIT MNS2 BOOk 1 IACQUIRED DEBIT MNS2 ACQUIRED 1 IACQUIRED CREDIT Advices No advices allowed for this event 14 2 8 3 UDCH UDE Values Change Accounting Entries No accounting entries allowed for this event Advices Advice type Description UDECA 14 2 8 4 DEBK Booking Term Deposits for discounted or true discounted deposit Accounting Entries Accounting Role Amount Tag Dr Cr Indicator TD PRINC BOOK TDACCOUNT Cr TD PRINC BOOK TDOFFSET Dr TD INT LIQD TDOFFSET Cr TD INT LIQD TDINTPIA Dr 14 11 ORACLE 14 2 8 5 14 2 8 6 14 2 8 7 Accounting Entries DEBK Booking Term Deposits for Bearing Type of Deposit Accounting Role Amount Tag Dr Cr Indicator TD PRINC BOOK TDACCOUNT Cr TD PRINC BOOK TDOFFSET Dr This event will have additional entries for the discounted interest Accounting Entries DEBK Booking Term Deposits for discounted interest Accounting Role Amount Tag Dr Cr Indicator Paid in Advance TD INT Dr Customer TD INT Cr ROLL Roll Over Of Deposits This event will be defined in the product to give out discounted interest on the extended portion of depos
116. ct SBUS01 individually For Save Money you enter the rate as 5 and for Smart Save Money you enter the rate as 10 Interest for Save Money accounts would be calculated based on the minimum balance in the account for the month at the rate of 5 Interest for Smart Save Money accounts would be calculated based on the minimum balance in the account for the month at the rate of 10 Waiving General Condition for Specific Account Many General Conditions can be defined for an account class For example you could define a condition by linking a credit interest product a debit interest product and an interest for non utilization of credit limit product All the products will be applied on all the accounts belonging to the account class You can however waive a product from being applied on an account This would mean that of all the General Conditions defined for an account class you do not want to apply one or more products to a specific account Continuing with the example for a specific account you could waive the application of debit interest The procedure From the Customer Accounts table you can invoke the Special Conditions screen In the Product Details window select the product that you want to waive for the account and click the waive interest field to waive the General Condition applicable to the account Repopulate at Liquidation If you have created Special Conditions for an account but would like the ge
117. ct will have an automatic interest liquidation on 31 March 98 irrespective of the date on which they were opened Interest for an account opened on or before 01 January 98 will be liquidated on 31 March 98 and so will an account opened for example on 30 March Thus accounts that were opened anytime during this quarter will have varying number of interest days depending on the date they were opened Also the month in which the account was opened will be considered for interest application depending on your definition in the Rule Maintenance screen During subsequent automatic liquidation s interest will be applied for a quarter provided there are no ad hoc liquidation s on an account during the quarter If you have selected both Start from Account Opening and Liquidation at Month End days then precedence is given to Start from Account opening i e Liquidation happens based on the account opening date and not on month ends Liquidation Before Month End While specifying the IC product preferences if you have set the interest liquidation frequency to a monthly yearly quarterly cycle you can choose to liquidate interest a specified number of days before the month end for all accounts linked to the product You have to specify the number of days before which interest should be liquidated The system arrives at the interest liquidation date based on the number of days that you specify TRIR ORACLE Let us as
118. culation date can either be e The Booking dated e The Value date of the turnovers Periodicity The periodicity decides the period over which a balance or a turnover should be considered for interest application This periodicity could be daily monthly quarterly three months semi annual six months or annual When a balance or turnover has to be picked up for interest application it will be picked up for this period An example for a balance with daily periodicity could be the daily net balance in the account Similarly the monthly minimum credit balance monthly maximum debit balance etc are examples of a balance with monthly periodicity Similarly you could consider the minimum credit balance over a quarter for interest application This periodicity is for picking up the value of an SDE It is not the periodicity at which interest is liquidated The periodicity with which interest is liquidated is called Liquidation Frequency Whenever interest has to be liquidated either according to the liquidation frequency or on an ad hoc basis the balance will be picked up based on the SDE periodicity and applied for the entire liquidation period The following example accentuates the difference between SDE periodicity and liquidation periodicity Example The SDE based on which interest has to be applied is Monthly Minimum Credit Balance The SDE periodicity is monthly If the liquidation frequency for an account is quarterl
119. d amongst other details For applying charges on an account you can define a General Condition or a Special Condition Charges thus applied will figure in the Account Statement for the account preferences screen displayed during product definition will be either interest preferences or charge preferences based on the product type 7 20 ORACLE All the other screens are the same for both Interest and Charge products Charge Product Preferences Product Code Account Details Currency int Currer 4 150161 Slab Tier Account Class Periodicity Description Liquidation Month Currency Receivable General Ledger 5 Open Force Charges During Maximum Account Closure Track Receivable Auto Liquidation Free Items Minimum Amount Details Transaction Codes 1015 100 Slab Amount Charge Amount CI Transaction Code x Description While creating a Charge product you will recall you identify the basis on which you would levy the charge You are yet to identify the account classes on which you would apply the product and the following details e currency in which you would like to levy the charge e periodicity with which you would levy the charge and for a non monthly cycle the month from which you would like to begin liquidation e whether you would levy the charge on tier or slab structures e account class currency combination on which you would apply the Charge product
120. d ALL If he chooses ALL the Rate Code option list will display RTCD1 and RTCD2 However if he is doing a specific maintenance for Branch 001 and he chooses RTCD2 then a configurable override will be displayed User 2 with Home Branch as 001 The Branch Code option list will display 001 If he chooses 001 the Rate Code option list will display RTCD1 If he chooses RTCD2 then a configurable override will be displayed Effective Date The Effective Date of a record is the date from which a record takes effect You can maintain different values for a UDE for different effective dates for a condition When interest is calculated on a particular day for the account class the value of the UDE corresponding to the date will be picked up The UDE values of a condition can be different for different dates Typically you would want to open records with different Effective Dates if the values of UDEs vary within the same liquidation period Example REQUIREMENT 1 In your bank you have maintained Save Money LCY as an account class On this class of accounts you want to pay credit interest based on the monthly minimum credit balance You have defined the credit balance in terms of a slab structure and wish to pay a different rate of interest for each slab as follows ORACLE Amount 1 gt 1000 gt 2000 6 Rate 1 Amount 2 gt 2000 gt 3000 7 Rate 2 Amount 3 gt 3000 gt 5000 7 5 Rate 3
121. d by the head office to calculate interest for the account being liquidated 12 3 1 Select Product Code You can choose to liquidate interest for e All products e Selected products Click on the buttons adjacent to each option to indicate that you would like to liquidate interest using the option Using these options in conjunction with the options in the Accounts To Liquidate field you can liquidate interest for e All accounts linked to all products that is for the branch e All accounts linked to selected products e Selected accounts linked to all products e Selected accounts linked to selected products e Selected account classes linked to all or specific products Depending on your selection criteria in conjunction with the Accounts To Liquidate field a list of products will be displayed For example if you choose to liquidate interest for selected accounts and all products a list of all authorized products will be displayed When you choose a product all the authorized accounts linked to the product will be displayed Interest for the accounts that you choose will be liquidated 12 4 ORACLE Click Account Number tab in the Interest and Charges Multiple Account Online Liquidation screen to get below given screen interest amp Charges Multiple Account Online Liquidation Reference No g Refresh Rates from HO Date of Liquidation Select Account Number o 12 3 1 1
122. d in this record will be picked up when you calculate interest for Save Money LCY That is for balances between 1000 and 2000 in accounts linked to Save Money LCY interest will be calculated at the rate of 6 and so on REQUIREMENT 2 one ORACLE Now in April you change the interest rate for the first tier that is Amount 1 You change the rate from 6 to 6 5 The other tier limits and rates remain the same In order that the new rates apply to accounts from 1 4 98 you must maintain a new record for the Save Money LCY SETUP PROCEDURE You must open a record in the UDE maintenance screen with the following details Product Code CRIN Account Class Save Money Currency LCY Effective Date 01 04 98 Amount 1 gt 1000 gt 2000 Rate 1 6 5 Amount 2 gt 2000 gt 3000 Rate 2 7 Amount 3 gt 3000 gt 5000 Rate 3 7 5 Amount 4 gt 5000 Rate 4 10 GRAND RESULT For the same account class currency and rule combination the tier limit has been changed This is effective from 1st April Now the first half yearly liquidation is in June For the first three months January March the values specified in the record dated 01 1 98 will be applicable For the period from April to June the values specified in the record dated 01 04 98 will be applicable Only if the periodicity specified while creating a rule is Daily will the UDE value
123. de ALL If it has not been maintained an error message will be displayed forcing you to first maintain the UDE value for the Branch Code ALL ue ORACLE The Rate Code option list will show all the rate codes maintained in the IC Rate Code Branch Availability screen During UDE maintenance for a specific branch if the Rate Code chosen is not available for the specific Branch then a configurable override will be displayed Example IC Rate Code Branch Availability screen Rate Code Allowed branches RTCD1 000 001 RTCD2 002 Common Branch Restrictions screen Home branch Allowed branches 000 000 001 002 001 001 002 002 000 is the HO Branch User 1 with Home branch as 000 The Branch Code option list will display 000 001 002 and ALL If he chooses ALL the Rate Code option list will display RTCD1 and RTCD2 However if he is doing a specific maintenance for Branch 001 and he chooses RTCD2 then a configurable override will be displayed User 2 with Home Branch as 001 The Branch Code option list will display 001 If he chooses 001 the Rate Code option list will display RTCD1 If he chooses RTCD2 then a configurable override will be displayed Effective Date The Effective Date of a record is the date from which a record takes effect You can maintain different values for a UDE for different effective dates for each account class and currency on wh
124. de UBST with Monthly as the interest liquidation frequency preference You have also indicated that the liquidation date should be a day before the month end and the current tax rate should be made applicable for tax deductions You have associated the account class titled ACLASS5 with this product Let us assume that you open a customer account SB07776 on the 1 of January 2001 The interest rate applicable up to the month of August is 5 In the month of September you reset the interest rate to 6 with effect from 15 July 2001 While liquidating interest on the 29 of September the system recomputes interest for the period between 15 July up to 30 August with 6 as the interest rate and credits the customer account with the differential amount However the 30 of September will be considered as the value date for the interest credit The tax on the interest credited will be applied at the prevailing rate since the tax component UDE is defined as current in this case In addition the system posts a separate liquidation entry for the current liquidation cycle of 31 August to 29 September kd ORACLE 9 4 9 4 1 Associating Customer Account with another Account You can choose to de link a customer account from the class to which it is linked and associate the account with another account class This re association will have an obvious effect on interest calculation since the IC product associated with the former account class ca
125. defining preferences is displayed in this field Status Select the different status codes applicable to the product in this field Use the add button to define each status and the attributes for the same You can use the navigation buttons to move from one status to the other The status codes with status type Account only will be available in the option list provided On selection of the status the associated description will be displayed alongside Transaction Code A Transaction Code is used to identify the nature of the accounting entries posted The code selected here will be used to track the accounting entries resulting from the movement of the account to the status being maintained Stop IC Select this option if you want the system to stop processing Interest and Charges when the account moves to the status that is being defined If not checked interest and charges will continue to be applicable on the account Reverse Accrual If you select this option all the accruals that have happened till date will be reversed when the account moves into this status Capitalize and Reverse Income Check this box to capitalize and reverse an income if you have checked OD Interest Reversible check box at preferences level of the Interest amp Charges Product Maintenance screen If you have checked this box then during the status change the system processes the write off entries for the account Reverse Income D
126. displayed in this field ORACLE 7 7 7 1 Class Details Class Code In this field you can view the code of the product for which you are defining the Branch and Currency restrictions 7 7 8 Maintenance of Event Accounting Entries for Products To invoke Events screen click Events button from the Interest and Charges Product maintenance screen Events Product Code Product Description Class Details Default From Class Class Code Class Description Event Details 100 Event Code Description lt Accounting Entries You can maintain the following details here Product Code The code of the Charge product for which you are defining preferences is displayed in this field Description The description of the product for which you are defining the Accounting Roles and Heads will be displayed in this field ORACLE 7 7 8 1 Class Details Specify the following details Class Code The code of the product for which you are defining the Accounting Roles and Heads will be displayed in this field Events Details Specify the following details Event In this field you can select the event for which you are specifying the accounting role and account head in other words the GLs to which the accounting entries would be passed When you liquidate or accrue interest or charge the accounting entries will be posted to the specified GL SLs for the event The following are t
127. duct in your branch 12 3 2 Authorizing Online Liquidation for Multiple Account For the transaction to be authorized click Authorize button The following screen will be displayed Authorize Records 10f1 Modification Number Modification Status 1 N IC Remarks Maker Remarks Maker Override Remarks Warnings 101 Warning Code Warning Description First Authorization Status A Maker Date 5 2012 11 07 2 Maker ID DOCUMEN2 Authorization Status Unauthorized First Checker Remarks Checker Remarks i Fields 10f1 f LI FieldName OldValue New Value The IC liquidation processing will be done only during authorization 12 6 ORACLE 12 4 Viewing Interest and Charges Multiple Account You can view the summary of interest and charges for multiple account in the Online Liquidation Single Accounts Summary screen To invoke this screen type ICSOLIQ in the field at the top right corner of the Application tool bar and click on the adjoining arrow button Online Liquidation Multiple Accounts Summary Authorization Status si Record Status si Reference No ai Date of Liquidation G Search Advanced Search Records per page 15 1 Of 1 Authorization Status Record Status Reference No Branch Code Date of Liquidation Refresh Rates from H
128. dvance Interest For computing the advance interest vou have to specifv the preferences as follows e Element ADV_INT_BASIS e Description ADV INT BASIS e Basis Advance Interest 4 11 ORACLE e Periodicity Liquidation Cycle e Nature Net e Type Booking Dated e Operation No operation 4 2 5 Maintaining SDEs for Computing Overdraft Interest For customer accounts where the customer uses the overdraft facility against the collateral lower interest rates are applied initially for the overdraft amount utilized and then the interest rate goes higher The following two SDEs are used to compute the overdraft interest rate e OD INTEREST CALC used to calculate overdraft interest based on value dated balance e OD INTEREST CALC used to calculate overdraft interest based on book dated balances For OD INTEREST CALC INTEREST CALC calculation the lowest interest rate is used first for interest calculation and then it moves towards higher interest rate maintained in Collateral Pool Maintenance screen e DLV NET VD BAL used to get the available balance in the account When customer repavs the overdraft utilized amount the higher interest rate overdraft is repaid before repaving the lower interest rate overdraft facilitv 4 2 6 Maintaining SDE for Computing commission on Highest Debit Balance Vou can maintain an SDE for calculating commission on Highest Debit Balanc
129. e In the example discussed in the beginning of this section the booking dated net balances are as follows 03 March 1998 30 000 Cr 10 March 1998 20 000 Dr 25 March 1998 40 000 Cr 30 March 1998 10 000 Dr 31 March 1998 10 000 Dr The value dated net balances on these days and the other value dates discussed would be as follows 4 4 ORACLE 01 March 1998 Nil 03 March 1998 50 000 Cr 05 March 1998 30 000 Cr 10 March 1998 20 000 Dr 25 March 1998 40 000 Cr 30 March 1998 10 000 Dr 31 March 1998 10 000 Dr If you want to apply interest on an account based on the balance in the account you have to first specify whether you would want to consider booking dated or value dated balances Subsequently you have to specify other characteristics for the balance When you are setting up the SDE you can use normal balance or the balance due to the IC transactions The basis for such SDEs is IC balance If the basis of an SDE is IC balance then by rule the nature of the SDE will be Net the type of the SDE will always be the value dated balance and no further operations will be allowed on the SDE Turnovers The charges that you apply on an account can be based on the turnover in the account Turnovers can either be debit or credit in nature The sum of all the debit transactions in an account in a day is the daily debit turnover of the
130. e Date associated with it The Effective Date of a record is the date on which a record takes effect The Effective Date that you specify for a rate is the date on which the rate comes into effect Once a rate comes into effect it will be applicable till a rate with another Effective Date is given for the same Rate Code and Currency combination The following example illustrates this Example Rate Code SBUSD Currency USD Effective Date Interest Rate 01 Jan 98 12 5 14 Jan 98 12 0 ORACLE 9 2 6 9 2 7 Effective Date Interest Rate 31 Jan 98 13 0 These rates will be applicable for the following periods Period Interest Rate 01 Jan to 13 Jan 98 12 5 14 Jan to 30 Jan 98 12 0 31 Jan to one day before the rate is changed 13 0 Note the following e The Effective Date for a particular rate should be later than the Effective Date of the first rate that you have maintained for the Rate Code e dates from which the debit and credit rates are effective can be different e There can be only one rate for an Effective Date e The same rate cannot be entered for two consecutive dates for a Rate Code Note that only if you defined the application periodicity for the rule to which you link a product as daily will the changes in rate apply for accounts linked to the product If the application periodicity is periodic the rate as of
131. e HDB with following details This SDE gives the highest Debit Balance of the month SDE Name HDB Basis Periodicity Nature Type Operation Balance Monthly Debit Value Dated Maximum 4 12 ORACLE 4 3 Viewing Customer TDS Details You can view the TDS details of the customer in the Interest amp Charges TDS Query screen You can invoke the Interest Charges TDS Query screen by typing TDSQUERY in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button summary Financial Year TDS Amount Customer Interest Amount Advanced Search Reset von stomer Financial Year Interest Amount Amount Customer Account Branc Select the Customer number and the Financial Year The Financial year must be a past year The following details are shown for the current level of TDS interest components for each account of the customer e Interest Amount e TDS Amount The search results display the following details e Branch e Financial Year e Customer e Customer Account e Interest Amount e TDS Amount 4 13 ORACLE 4 3 1 Maintaining SDEs for Deducting Charges on Dormant Accounts Oracle FLEXCUBE provides you the facility to collect charges on customer accounts that are dormant The dormancy period is determined by the number of days the accounts have been inactive in the current liquidation cycle However the
132. e 4 Step 2 You link this rule to a credit interest product that you have defined in the Product Definition screen You apply this product to the Save Money LCY class of accounts in the Product Preferences screen You define the liquidation cycle as half yearly The first liquidation will be in June and the next will be in December since the current liquidation cycle begins on 1 1 98 Step 3 In the UDE maintenance screen you must specify the UDE values as follows Product Code CRIN Account Class Save Money Currency LCY Effective Date 01 01 98 Amount 1 gt 1000 gt 2000 Rate 1 6 Amount 2 gt 2000 gt 3000 Rate 2 7 Amount 3 gt 3000 gt 5000 Rate 3 7 5 Amount 4 gt 5000 Rate 4 10 RESULT Unless you change the UDE values the values that you have specified in this record will be picked up when you calculate interest for Save Money LCY That is for balances between 1000 and 2000 in accounts linked to Save Money LCY interest will be calculated at the rate of 6 and so on ORACLE REQUIREMENT 2 Now in April you change the interest rate for the first tier that is Amount 1 You change the rate from 6 to 6 5 The other tier limits and rates remain the same In order that the new rates apply to accounts from 1 4 98 you must maintain a new record for the Save Money LCY SETUP PROCEDURE You must open a
133. e Account Class Maintenance screen You can specify the Receivable GL only for products linked to rules having debit formulae This feature is applicable only for the debit interest on the account calculated through the IC module Refer the Daily Processing of Interest and Charges for information on End of Day processing for Debiting Receivable GL Passing accounting entries for the refund amount Redemption Advice Required Check this box if redemption advice is required ee ORACLE When a preclosure of a term deposit takes place the original tax entries are not reversed Instead the system will pass a new set of entries for the refunded tax amount The amount tag TAX REFUND will be used to pass the refund entry This amount tag will give the total tax calculated on the interest Accounting Role Amount Tag Dr Cr Indicator LIABGL TAX_REFUND Cr Liability GL for Deposits FRTAXS_PAY TAX_REFUND Dr Tax Payable GL Refer Annexure A of this User Manual for a list of accounting entries and amount tags that you can set up for an Interest product Example The following example will illustrate the manner in which tax is calculated and refunded on preclosure of a term deposit Mr Silas Manner a customer of your bank makes a deposit for a period of three months The details of the deposit are as follows e Openingdate 10 October 2003 e Maturity Date 10 January 2004 e Deposit amount 100000
134. e Out Today Maturity Date Close Out Maturity Calculation From Date Calculation To Date Memo 14 4 10710 gt Product Formula Number Name Status Maturity Date Account Branch Account Currency Tax Amount Currency Account Summary 14 41070 gt Principal Balance Lien Amount o lt Credit Component Balance Debit Component Balance Overall Balai User Defined Fields 14 4 10710 Currency o m 15 2 ORACLE Multiple Accounts You can invoke the screen by typing the code ICDOCALC in the field at the top right corner of the Application tool bar and click on the adjoining arrow button interest amp Charges Multiple Account Online Calculation New Enter Query Calculate From Date B To Date E Product Code Account Number Interest Product HEE E Product Code z Submit Batch Choosing specific accounts to calculate interest If you have chosen to calculate interest for specific accounts or products choose the account or product from the option list Choosing specific account classes to calculate interest If you have chosen to calculate interest for specific account classes choose the account class or product from the option list Choosing a combination of products and accounts or account classes To calculate interest for selected accounts or account classes and selected products sel
135. e an amount under the following circumstances e inthe case of a tier structure the upper and lower limit of a tier or a tier amount e inthe case of a charge when it is indicated as a flat amount e amount that can be used in the definition of formula e ORACLE When you build a rule you will indicate the UDE to be a number if the interest or charge is defined based on the number of transactions or the number of account statements A UDE under this category can also be used to store a numerical value that may be used in a formula Now for each of the UDEs that are displayed you must specify the values If the type of UDE that you have identified for the rule is a Rate element you can either specify a Rate Code or enter a value for the Rate element If you specify a Rate Code for the UDE the value that you have maintained for the rate code will be picked up while calculating interest However if you choose to enter a spread for the Rate Code the appropriate value will be computed A Spread is a positive or negative value that you add or deduct to the value specified for the Rate Code If you do not specify a spread the rate maintained for the Rate Code will be picked up If the type of UDE is an amount the value that you enter will be in the currency that you specified in the UDE amounts currency field in the Interest Preferences screen If you specified the UDE amounts currency as the local currency and
136. e authorized click Authorize button The following screen will be displayed Authorize I Records 10f1 Modification Number Modification Status First Authorization Status Authorization Status Maker ID Maker Date S 1 N A Unauthorized DOCUMEN2 2012 11 07 2 lie Remarks Maker Remarks First Checker Remarks Maker Override Remarks Checker Remarks l Warnings 10f1 C Warning Code Warning Description i Fields 10f1 C FieldName Old Value New Value The IC liquidation processing will be done only during authorization 12 10 ORACLE 12 6 Viewing Interest and Charges Single Account You can view the summary of interest and charges for single account in the Online Liquidation Single Accounts Summary screen To invoke this screen type ICSLIQAG in the field at the top right corner of the Application tool bar and click on the adjoining arrow button Online Liquidation Single Accounts Summary Authorization Status si Record Status si Reference No H Account No Date of Liquidation Records per page 15 si 1 0F1 Authorization Status Record Status Reference No Branch Code Account No Date of Liquidation Refresh Rate You can query on records based on any one or all of the following criteria e Authorization Status e Record Status e Reference Number e Branch
137. e liquidation is referred to as ad hoc liquidation If you opt to liquidate interest periodically you can automate the liquidation process The automatic processes that are generated at the end of day will liquidate interest for those accounts that are marked for liquidation You can perform an ad hoc liquidation on accounts anytime even if the accounts are marked for auto liquidation You should necessarily liquidate interest before you e close an account e change its account class tal ORACLE e change the calculation account 7 2 1 1 Calculation and Liquidation Frequency The term liquidation frequency refers to the interval between successive periodic liquidation s Specify the liquidation frequency for the Interest product that you are creating You can specify the liquidation frequency in e days e months e years Days If you want to liquidate interest every 15 days enter 15 If you want to liquidate interest every 9 days enter 09 Months If you want to liquidate interest every month enter 01 If you want to liquidate interest every quarter enter 03 Years If you want to liquidate interest every year enter 01 Example Assume you would like to liquidate interest every quarter that is in the months of March June September and December You would like to liquidate interest on the 5th day of the month that is on the 5th of March the 5th of Ju
138. e rate code for which the IC rates are being defined is allowed for the branch To recall at the head office of your branch you can create appropriate floating rate codes for the IC rates and make the codes available to the required branches In the Interest and Charges Branch Availability Maintenance screen you can maintain floating rate codes for IC rates which you can make available to desired branches You can do this by maintaining a list of branches for which the use of the rate code is allowed or disallowed You can invoke the Interest amp Charges Branch Availability Maintenance screen by typing ICDRESTR in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button IC Rate Code Branch Availability Rate Code Branch Restrictions A Disallow Branch Specific Rates Description Input By Authorized By Modification Number Authorized Open Date Time Date Time eo ORACLE 8 2 In this screen you must specify the following information Rate Code You must specify a unique identification for the floating rate code you are creating This is the identification that will be used as to identify for the rate code in all subsequent references to it You must also specify a unique description for the code WW After the rate code has been created in the Interest and Charges Branch Availability Maintenance screen the effective rates for t
139. e you liquidate interest for an account or account class you must ensure that inconsistencies in data do not exist The IC Consistency Check function checks and reports inconsistencies in the data that you have maintained Running Maintenance Consistency Check The IC Maintenance Consistency Check is run automatically when the end of transaction input is marked When you liquidate interest on an ad hoc basis the IC Consistency Check function automatically checks for inconsistent data You can also generate the maintenance consistency check report anytime The IC Maintenance Consistency Check reports the following inconsistencies in data e Unauthorized accounts e Unauthorized account classes e Unauthorized currencies e Unauthorized products e Unauthorized rules e Invalid account entry setup e Unauthorized General Conditions Before you liquidate interest for an account manually you must generate the Maintenance Consistency Check Report from the Application Browser 10 2 1 Unauthorized Accounts You cannot liquidate interest for an account that is unauthorized When you run the auto liquidation process at the end of day the IC Consistency Check reports all unauthorized accounts which fall due for interest liquidation for the day Before you can go ahead with the automatic liquidation process you must authorize all accounts that were reported by the consistency check ka ORACLE You cannot liquidate interest for an
140. e you would like the current rates to apply on a deposit that is rolled over You would therefore indicate the UDE value for the general conditions as the value of the fixed deposit rate code IMPLICATIONS On 01 January 1998 the value of the fixed deposit rate code is 10 This would be the UDE value for both the general conditions and the special conditions that you have defined Accounts opened on this day would have an interest rate of 10 for the entire 45 day period Interest for accounts opened on this day would be liquidated on 14 February 1998 On 05 January 1998 the rate changes to 9 5 Interest for all accounts opened on this date would be processed at 9 5 for the entire period of 45 days Interest would be liquidated on 19 February 1998 Note that interest for accounts opened up to 04 January 1998 would be calculated at the rate of 10 Now if the deposit opened on 01 January 1998 is rolled over on 15 February 1998 interest would be calculated for it at the rate of 9 5 for the next liquidation cycle of 45 days if e the interest rates do not change after 05 January 1998 you have indicated that the interest rate should be Repopulated at Liquidation for this account Similarly if you specified while defining the special conditions for each account that interest rates should be Repopulated at Liquidation for accounts rolled over e every account will pick up the prevailing rates defined for the account
141. eceseceeeceeeceeeeeeeseeeeeeess 12 15 12 10 PROCESSING CAPITALIZATION OF OD INTEREST cccccccccecccececececececececscseesececeeecsesceesseeeseeseeesseeseeenss 12 17 13 MAINTAINING INTEREST STATEMENT DETAILS sssennessennnensnnnensnnennnnsnnnnsnnsenenssnennnnseeeennenea 13 1 13 1 INTRODUCTION MS eS RA ce ees ies 13 1 13 2 MAINTAINING INTEREST STATEMENTS cscsccececececeeecseeeeeeeececeeceseeeseeeeceeeceeececececececececeeeeeeseeeeeeceeeeeeeeess 13 2 13 3 IDENTIFYING VALUES TO BE PRINTED secssccevecsossevscveceevecsosvevecboceevecsoveevecvocesvecsoevevecbocvsvecsovesvecvecesvecsees 13 3 134 GENERATING INTEREST STATEMENT ccccccesececeescecececseceseececececeeeceeseececeeeceeeceeeceeecececeeeeeeeeeeeceeececeeeeeeess 13 4 14 ANNEXURE A ACCOUNTING ENTRIES AND ADVICES 2 cccsssssccsssscecssseccessscceesssccesssccseees 14 1 14 1 ACCOUNTING ENTRIES FOR INTEREST AND CHARGES ccccesececececeeeceeececececececececececececeeeeeeeeeeeeeceeeeeeeeess 14 1 14 1 1 TO TEV CTS octets 14 1 T412 AMOUNT ts 14 1 T413 ACCOUNTING Roles R E di 14 2 14 2 EVENT WISE ACCOUNTING ENTRIES AND ADVICES c ccccccecececececscecececeeecececeeeceeececececeeeeeceeeeseseseeeeeeees 14 2 IA 21 Charge Basis ADH OC SIM Tisner deans 14 2 JA22 Charge Basis NUM CHQ ISS xi
142. ect the product list first You can then select the accounts or account classes Specifying the destination You can direct the information to one of the following destinations e the printer e the screen as a display or e a spool file which be printed later on Select the required destination Contents of the report The report provides the following information 15 3 ORACLE The Header Bank and This is the name of your bank and the branch through branch which you are logged in User id The user id of the person who is generating the report is printed Account This is the account number for which you are generating Number the report Branch Date The current system date Date and Time The date for which you are generating the report Currency The currency of the account is included in the report The Body The report also includes the following information every rule id applied on the account description of the formula e built into each rule applied description and values of the SDEs and the UDEs used in calculation the values of the SDEs and the UDEs the total value of the interest calculated formula wise 15 3 Interest Calculation Projected The IC Interest Calculation projected function gives you the projected interest applicable on an account for the current liquidation period You can get the interest applicable based on the following criteria for accounts in
143. ed on the parameters maintained at the product level Branches will be interested to know the interest accrual and the application amount for a whole financial year i e from 1 April to 31 March This information will also be required by the customers for tax purpose Hence you can generate year to date YTD report which details the interest accrual interest received and paid amount This report will generate a savings YTD report for a specified branch for the current financial year The accounts are grouped based on the product You can invoke Savings YTD Interest Report screen by typing ICRSAYTD in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button amp Savings YTD Interest Report Branch Code Account Number Financial Cycle From Date From Customer To Date To Customer Report Format Printer At Report Output Printer You can specify the following parameters here 15 14 ORACLE Branch Code Specify a valid code of the Branch in which report is being generated from the adjoining option list Account Number Specify a valid account number maintained in the specified Branch for which you wish to generate report from the adjoining option list Financial Year Specify a valid financial year for which you wish to generate the interest accrual report from the adjoining option list From Customer Specify a valid customer ID from whom the intere
144. ement Summary LDRPACCR Accrual Control Report STDACUDE Account Class amp Rate Association Maintenance STDCUSAC Customer Accounts Maintenance TDRLNKOD TD Linked to OD Account Report TDSQUERY Interest amp Charges TDS Query ORACLE Interest and Charges May 2012 Version 12 0 Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores CA 94065 U S A Worldwide Inquiries Phone 1 650 506 7000 Fax 1 650 506 7200 www oracle com financial_services Copyright 2012 Oracle Financial Services Software Limited All rights reserved No part of this work may be reproduced stored in a retrieval system adopted or transmitted in any form or by any means electronic mechanical photographic graphic optic recording or otherwise translated in any language or computer language without the prior written permission of Oracle Financial Services Software Limited Due care has been taken to make this document and accompanying software package as accurate as possible However Oracle Financial Services Software Limited makes no representation or warranties with respect to the contents hereof and shall not be responsible for any loss or damage caused to the user by the direct or indirect use of this document and the accompanying Software System Furthermore Oracle Financial Services Software Limited reserves the right to alter modify or otherwise change in any manner the
145. en The Debit or Credit rate is the rate at which interest has to be calculated for the accounts linked to the Interest Rule These rates can be either ma ORACLE e Fixed e Floating If the rates are fixed you can specify their values in the UDE Maintenance screen If you want to apply floating rates you should link the interest rule to a Rate Code You can do this by specifying the Rate Code instead of entering the actual value in the UDE Maintenance screen For each currency you can maintain different interest rates The following example illustrates this Example You have the following types of accounts in your bank e Savings Bank accounts and e Current accounts The accounts are in the following currencies e USD the local currency e GBP e JPY Now the rate of interest that you pay on savings accounts in USD would be different from that which you pay on current accounts in USD In the Rates Maintenance screen you can maintain different rates of interest for the same currency You must assign the different rates that you maintain for a currency unique Rate Codes For example for savings accounts in USD you can define a Rate Code such as SBUSD When you calculate interest for USD savings accounts linked to the rate code SBUSD the rate that you maintain here will be picked up 9 2 5 Defining Effective Date for Rate Code Each rate that you maintain for a Rate Code and Currency combination should have an Effectiv
146. ences for the product if you specified the accrual frequency interest will be accrued by the End of Day process according to the frequency you have specified Accruals will also be performed whenever there is interest liquidation For an account on which a liquidation is done out of turn an ad hoc liquidation when a periodic liquidation is not due accrual entries will be passed till the date of liquidation Entries will be passed to the accrual accounts that you specified while creating the product that you have applied on the account If you specified that accrual entries have to be passed for a product rather than for individual accounts a consolidated entry will be passed for the product If not an entry will be passed for each account on which you have applied the product ad hoc liquidation of interest an account defined for auto liquidation will liquidate interest till the date that you have specified The subsequent accrual of interest will be from the date of the ad hoc liquidation The details of accruals for each account will be available in the Accrual Control Journal a report generated whenever accruals are performed as part of end of day processing End of Day processing for Tax Non tax IC products In case of IC product maintained as a Tax product or non tax product the EOD processing occurs in the following manner The system applies the existing formula for calculation the credit interest for all accounts o
147. end For such a cycle you should indicate 31 March as the date of first liquidation during the year The subsequent dates will be automatically fixed by the system based on the frequency and the first liquidation date Similarly If you want to liquidate on a half yearly basis that is June and December and on month ends you should specify the date of first liquidation as 30 June 1999 If you want to liquidate interest every two months that is February April June August October and December at the end of month you should specify the date of first liquidation as 29 February 1999 If you want to liquidate interest annually that is every December on 31 December you should specify the first day of liquidation as 31 December and so on The First Liquidation Date thus determines the date on which the first liquidation should be carried out for all accounts linked to a product Subsequent liquidation dates will be fixed based on this date and the frequency of liquidation Start From Account Opening We have seen how periodic liquidation s can be fixed to begin on a particular date First Liquidation Date and happen at a definite frequency Instead of giving a First Liquidation Date and bringing all the accounts linked to the product to the same liquidation cycle you could opt to liquidate interest for accounts periodically according to a frequency determined by the Account Opening Date ce ORACLE For example the liquidatio
148. eport the details of products you have maintained in your bank In the Select Records to Print option you can specify the products that you would like to include in the report For generating a report on selected products you should specify the From and To Product IDs the details of products falling in this range alphabetically will be generated To retrieve details of a single product enter it in both the From and To fields The Header e of the bank and branch e current system date e userid e date for which you are generating the report The Body The report includes the following details e product code e product description e product start date e product end date e product group e product slogan e product remarks e the interest rule associated with the product e liquidation days e liquidation month e liquidation start date e liquidation end date e accrual frequency e if accrual at product level or contract level e accrual month e accrual day e if accrual at end of month e if interest is to be applied from account opening date e according class and currency on which the product is applied 15 12 ORACLE e accounting roles and heads to which accounting entries would be posted e whether entries generated should be netted e the advices to be generated 15 9 Report on Interest Calculation Details The Interest Calculation Details reports all the interest calculated of your branch T
149. ept using the interest rates maintained for ACLASS2 UBSW combination If the interest has already been accrued the relevant entries will be reversed Case Il Let us assume that on the 1 of January 2001 you have opened the account SMSB008 This account has been linked to the account class ACLASS1 On the 15 of August 2001 you decide to de link the account SMSBOO8from account class ACLASS1 linked to product UBST and re associate it with the ACLASS2 linked to the product called UBSW The system auto calculates the interest for the respective liquidation cycle i e from the 1 to the 30 of August with the interest value date of 31 August On the 16 of August 2001 you post back valued entries for the month of June In this case you will have to perform a manual liquidation for the back valued entries that have been posted Application of Interest and Charges A note IC Special Condition The Rate Code option list in the IC Special Condition screen would display the Rate Codes maintained in the Interest and Charges Rates Maintenance screen i ORACLE MIS Refinance Rate Pickup In case the MIS Refinancing is based on an IC Rate Code the rate maintained for the specific branch would be picked up If the rate maintained for the specific branch were not available the rate maintained for the ALL record would be picked up IC Processing would search for the UDE maintained for a specific Branch If this were not avail
150. er Elements Type Get Latest Amount i Use Effective Input By Authorized By Modification Date Time Date Time Number Authorized Open Rule Identification Assign each Rule that you define a unique code This code should ideally represent the type of interest or charge that you are defining When you want to link a product to a Rule it should be possible for you to identify the Rule with only the code you have assigned it Description Enter a short description of the Rule indicating the type of interest in the Description field This will be used by the system for all display and printing purposes Enter at least three characters for the description of the Rule 3 5 ORACLE 3 3 1 1 Primary Element Select the System Data Element SDE that must be deemed as the principal component for the interest rule you are defining This is typically done for rules defined for prepayment penalty application for time deposits The SDE maintained to pick up amounts withdrawn before the maturity date is typically set as the primary component for such rules Apply Interest By default interest will always be applied from the day an account is opened till the day before it is closed However you have the option of excluding the month in which the account is opened or closed from being considered for interest application e Account Closure Month e On Account Opening Month Example An account is opened on 10 April
151. erest due to a formula for all the accounts linked to the product will be consolidated and a single entry posted for the product The details of accruals for each account will be available in the Accrual Control Journal a report generated whenever accruals are performed as part of end of cycle processing Cycle If the frequency with which you choose to accrue interest is e quarterly e semi annual e annual Specify the accrual cycle vis a vis the months For example a quarterly cycle may be March June September and December indicating that the accrual should take place in these months For a half yearly cycle you would specify June and December Accrual Day For a non daily accrual frequency the Accrual Day indicates the day of the month on which the accruals have to be carried out For example an Accrual Day of 25 indicates an automatic accrual should be done on 25 of the month as per the frequency ORACLE Accruing only on month ends If you have specified that you would like to accrue interest for accounts linked to a product in cycles of a month or more that is every month quarter six months or year you can indicate if the interest is to be accrued on the last working day of the month If you opt to accrue interest on a month end accruals will be carried out every month on the last working day of the month Normally you would want to accrue interest on month ends To accrue interest on month ends enter 31
152. est for all the accounts in your bank even though the interest liquidation cycle falls due on 30 June 1998 Solution In the On line Liquidation screen choose All Accounts Interest for all the accounts in your bank would be liquidated for the period between 01 January 1998 and 31 April 1998 Similarly if you want to liquidate interest for accounts linked to PRO1 choose Selected Products Interest for all the Save Money accounts will be liquidated for the period between 01 January 1998 and 01 April 1998 If you want to liquidate interest for specific Save Money accounts linked to PRO1 choose Selected Accounts and Selected Products Choose the Save Money accounts for which you want to liquidate interest 12 9 ORACLE Interest will not be applied for the current month when you run the ad hoc liquidation function if you specified that interest should not be applied for the Account Closure Month when defining the rule If you have specified that interest should be applied on Account Opening Month interest will be computed for the first day of the month on which the account was opened Remember that when you run the ad hoc liquidation function inconsistencies in maintenance data if there are any will be reported by the IC Consistency Check Rectify the inconsistencies before you run the ad hoc liquidation function 12 5 1 Authorizing Online Liquidation for Single Account For the transaction to b
153. etup The other inconsistencies reported as invalid account entry setup could be caused when Original Changed Product setup to be changed Formula Formula Type Type Non Booking Booking Accounting Role and Head and the accounting entries to be posted for the event not defined Non Booking Tax Accounting Role and Head and the accounting entries to be posted for the event not defined os ORACLE Original Changed Product setup to be changed Formula Formula Type Type Booking Tax Accounting Role and Head and the accounting entries to be posted for the event not defined When an invalid accounting entry setup is reported for a product rule combination rectify it in the product screens Example You define an interest rule CRIN and link it to a product PRO1 You apply this product on an account class Save Money US On 31 March 1998 you learn that a previously non existent tax has been levied on USD accounts You therefore build a tax formula for the rule CRIN Now you do not authorize this modification yet when you initiate the processing of interest liquidation for 31 March 1998 Also you do not specify the Accounting Role and Account Head to which the result of the formula should be posted for the product The IC Maintenance Consistency Check will report that the following are unauthorized e PRO1 e CRIN The accounting entry setup for P
154. example illustrates this Example You create a product CHG1 The Charge Basis of this product is Turnover You would like to levy charges in rates according to the following slab structure Slab 1 0 10 000 2 5 Slab 2 10 001 25 000 5 Slab 3 gt 25 000 7 5 However you specify the Maximum Charge Limit as USD 3500 for CHG1 Assume you apply CHG1 on the account of Cavillieri and Barrett Finance Corporation The debit turnover in this account is USD 50 000 When charges are calculated only USD 3500 will be charged on the debit turnover of USD 50 000 even though the actual amount that should be levied on the debit turnover should be USD 3750 USD 50 000 falls into the third slab for which you have specified that charge should be calculated at 7 5 Gi ORACLE 7 6 5 7 6 6 Identifying Suspense GL to Store Charges on Customer Accounts Before applying charges on personal current accounts you can choose to notify your customers through Charge Notification messages In the interim period charges are debited from a Receivable before actually debiting the customer account While specifying preferences for Charge products you can identify the Receivable GL that is to be used for storing charges on a temporary basis Charge notification preferences are specifies for an account class through the Account Class Maintenance screen This feature is applicable only for the charges
155. f a rule before you attempt to liquidate interest for the accounts on which you have applied the rule Unauthorized rule The IC Maintenance Consistency Check will report an unauthorized interest or charge rule Invalid accounting entry setup If you have defined a product with an imperfect account entry setup the IC Maintenance Consistency Check will report it Typically the IC Maintenance Consistency Check reports an invalid accounting entry setup when you modify an interest rule and do not make the required changes to the products on which you have applied the rule It is vital that when you create or make changes to an interest rule you change the corresponding details for products linked to the rule If you have allowed accruals for an Interest rule but have not maintained the Accounting Roles and Heads for the accrual entries while defining the product on which you apply the rule the Maintenance Consistency check will report this as an inconsistency Similarly if you have disallowed accruals for an Interest Rule but have specified accounting roles and heads for the product the maintenance consistency will report this as an inconsistency For example if you modify or create a new formula for a rule the accounting entries setup for the products to which you have linked the rule would change If you do not make the required changes for the product the maintenance check will report the inconsistency as an invalid account entry s
156. f all the UDEs that you identified for the interest rule The value that you specify here will be used to calculate interest for the account All the UDEs that you have identified for the rule to which the product is linked will be displayed here The UDEs that are displayed here can be of four types They are e Credit Rate e Debit Rate e Amount e Number The interest that you charge on a debit balance is an example of a debit rate The interest that you charge on a credit balance is an example of a credit rate A User Data Element will be an amount under the following circumstances e inthe case of a tier structure the upper and lower limit of a tier or a tier amount e inthe case of a charge when it is indicated as a flat amount e amount that can be used in the definition of formula e When building an interest rule you may have indicated the UDE to be a number if the interest or charge is based on the number of transactions or the number of account statements A UDE under this category can also be used to store a numerical value that may be used in a formula Now for each of the UDEs that are displayed you must specify the values individually If the type of UDE that you have identified for the rule is a Rate element you can either specify a Rate Code or enter a value for the Rate element If you specify a Rate Code for the UDE the value that you have maintained for the rate code will be picked up while calcula
157. f the Non Tax products The processing of all Non Tax products is done first The system calculates accrues and liquidates these accounts and then subsequently processes the Tax products 11 2 ORACLE You need to maintain the formula for Tax products in the given format e TOT_INTEREST_AMOUNT gt TDS LIMIT e INTEREST AMOUNT TAX RATE The TDS amount is deducted from the customer account and the relevant accounting entries will be posted for all Tax products However no accounting entries are posted for Non Tax products For the Event IACR Interest Accrual no accounting entries are posted for Tax products The following accounting entries for the TDS amount will be passed when the ILIQ event Interest Liquidation event is triggered e Dr Customer e Cr Tax payable Reversing Accrual Entries Some changes in IC maintenance may necessitate the reversal of accrual entries already passed These reversal entries are passed by the IC Daily functions Some of the situations that require a reversal of accruals are e Closure of a product to which an account is linked e Delinking of an account from a product Charges Applicable for Creditor or Debtor Agreements Charges applied for maintenance and amendment of Creditor Direct Debit DD or Debtor DD agreements in the Payments and Collections module are tracked and computed by the IC End of Day process and applied to the relevant accounts The following charge bases are used to compute su
158. for calculating the interest for TDS and booking is computed using the following two formulas Formula 1 Non Booked No accruals required TOT_INT_AMOUNT gt TDS_LIMIT INTEREST_AMOUNT TAX_RATE Formula 2 Booked no accruals GREATEST FORMULA1 TDS_AMOUNT 0 You have to maintain the TDS_LIMIT and TAX_RATE UDE s at the rule level for each product account class currency and effective date combination In case you have defined the IC product as a Tax product then the Deposit check box will be disabled ad ORACLE In case the Tax check box is left unchecked the IC product for which you have enabled Include for TDS Calc option will be treated as a non tax product The credit interest for the account will be calculated and booked using such non tax products For details on setting SDE s for computing TDS refer to the section Maintaining SDE for TDS under the chapter Maintaining System Data Elements in this Interest and Charges user manual Charge Basis If you are creating a Charge product you must specify the basis on which you want to apply the charge You can choose to apply charges on the basis of any of the following e NUM ACCT STMTS Number of Account Statements You can fix the number of free account statements for a liquidation cycle For every extra account statement that you issue you can levy a charge e NUM CHQ RET Number of cheques returned Every cheque that bounces is recorded in the Cheque
159. fy For the account for which you are defining special conditions choose the product s that you wish to apply You may want to apply more than one charge product on an account For example you may want to levy a charge for additional account statements and for debit turnovers in the account In order to achieve this you would have to apply two products one built on the basis of Number of Account Statements and another built on the basis of Turnover In this screen you can choose the products that you want to apply on the account The charge currency defined for the product in the Charge Product Preferences screen that you apply on the account is displayed Note that the charge values that you specify for the account subsequently will be taken to be in this currency g ORACLE 7 7 2 7 7 3 Defining Minimum and Maximum Charge In this screen you can indicate the minimum and the maximum charge that you would like to levy on the account When charges are calculated for the account the values that you enter here will determine the actual charge that is applied on the account The following example illustrates this Example You create a product CHG1 The Charge Basis of this product is Turnover You would like to levy charges according to the following slab structure Slab 1 O 10 000 2 5 Slab 2 10 001 25 000 5 Slab 3 gt 25 000 7 5 However you specif
160. hat are available for users in the current branch according to the IC Rate Code Branch Availability Maintenance Currency Code In the Interest and Charges Rates Maintenance screen you define the rates for each rate code branch and currency combination You can select the currency for which the rates are being maintained in the Currency field Effective Date for a Rate Code Each rate that you maintain for a Rate Code Branch and Currency combination should have an Effective Date associated with it The Effective Date of a record is the date on which a record takes effect The Effective Date that you specify for a rate is the date on which the rate comes into effect Once a rate comes into effect it will be applicable till a rate with another Effective Date is given for the same Rate Code Branch and Currency combination The Effective Date for a particular rate should be later than the Effective Date of the first rate that you have maintained for the Rate Code e dates from which the debit and credit rates are effective can be different e There can be only one rate for an Effective Date e The same rate cannot be entered for two consecutive dates for a Rate Code Closing Rate for Date An entry passed into an account for with a value date prior to the booking date is called a back dated entry For such a transaction you can specify whether you want to use the rate as of the period of the back
161. he Interest Charge Booking Branch from the option list available The accounts maintained in the selected Booking Branch will be available in the option list provided for Interest Charge Booking Account You can select the account from this list Interest Charge will be liquidated into the selected account Interest Statement Indicate if you would like to generate an interest statement for the account The Interest Statement will furnish the values of the SDEs and UDEs and the interest rule that applies on the account oie ORACLE Dr Cr Advices Indicate whether you want to generate an interest liquidation advice for a customer account Check the Debit Credit Advices box to indicate that the system must generate payment advices when interest liquidation happens on an account The advices are generated in the existing SWIFT or and MAIL format No advices will be generated if you leave this box unchecked The preference you have made in the Customer Account Class screen will be defaulted here However you can choose to change your preference to generate or suppress these Advices 9 3 1 3 Product Details Product To calculate interest for an account you must apply an interest product on the account To recall every interest product that you create is linked to an interest rule The logic to calculate interest is built into an interest rule When you apply an interest product on the account interest for the account will be calculated a
162. he Product Preferences screen select the accrual frequency from the adjoining drop down list This list displays the following values e daily i ORACLE e monthly e quarterly e semi annual e annual e on liquidation accrues only when you liquidate interest Periodic accruals for all formulae for which interest has to be accrued will be done during the end of day processing for each account linked to the product Entries will be passed to the accrual accounts that you have specified while creating the product If you have specified that accrual entries have to be passed for a product rather than for individual accounts a consolidated entry will be passed for the formula for all the accounts linked to the product If not an entry will be passed for each account individually Accruals will also be performed whenever there is interest liquidation For an account on which a liquidation is done out of turn an ad hoc liquidation when a periodic liquidation is not due accrual entries will be passed till the date of liquidation The next accruals for the account will be done from the next day onwards Product Level If you choose to accrue interest for each account linked to the product an accrual entry will be posted for each account individually The account for which the accrual entry is passed will be shown when you retrieve information about an entry If you opt however to accrue interest at the Product Level the accrued int
163. he code must be defined in the Interest and Charges Rates Maintenance screen Branch Restrictions You can maintain a list of allowed branches that is the rate code will be available for use in the allowed list of branches or disallowed branches the rate code will not be available for use in the branches in the disallowed list To recall the IC rates for the code are maintained in the Interest and Charges Rates Maintenance screen for a rate code branch and currency combination Maintaining IC rates in this screen for a branch is subject to whether maintenance of IC Rates is allowed for the branch and also whether the rate code for which attributes are being defined is allowed for the branch For details about the Common Branch Restrictions refer the Security Management System user manual Example You have created the following Common Branch Restrictions Home Branch Restriction Type Allowed Branches 000 ICRATES 000 001 002 005 001 ICRATES 001 006 The administrator of branch 000 can create modify and delete IC rate codes in the branches 000 001 002 and 005 but not for 006 Maintaining Floating Rates for IC Rate Codes To recall after an IC Rate Code has been created the rates for the rate codes must be defined for different branches and currencies in the Interest and Charges Rate Input screen This maintenance of rates is done at the different branches You can
164. he events available for an interest product e ILIQ interest liquidation e Interest accruals e UDCH Change of UDE values For a charge product the following are the events available e Interest liquidation e UDCH Change of UDE values For further information on Accounting Entries and Events that you can define for a product please refer Product Definition User Manual fo ORACLE 7 7 9 Maintenance of Branch and Currency Restrictions To invoke Branch and Currency Restrictions screen click Branch amp Currency button from the Interest and Charges Product maintenance screen amp Branchi Currencv Restriction Product Code Product Description Class Code Default From Class Class Description Branch Restrictions Disallowed Currency Restrictions Disallowed Allowed Allowed Branch Code Currency 10710 100 Branch Code Branch Name Currency Code Currency Name Product Code The code of the Charge product for which you are defining preferences is displayed in this field Description Enter a brief description of the product This description will be associated with the product for information retrieval purposes 7 7 9 1 Class Details Class Code In this field you can view the code of the product for which you are defining the Branch and Currency restrictions 7 7 9 2 Currency Restrictions First of all you must specify the list type that you want to maintain U
165. his report also indicates the rule id that that is used to match the entries in the case of the entries that were automatically matched 15 9 1 Selection Options You can invoke this screen by typing ICRIP in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button Click OK button to generate the Interest Calculation Details report click Exit to return to the Reports Browser interest Calculation Details Interest Calculation Details Details For All Accounts Selected Accounts You can calculate the interest with following options e forall accounts e selected accounts The calculations are displayed based on the type of detail selected 15 9 2 Contents of the Report The contents of the report are discussed under the following heads 15 13 ORACLE Header The Header carries the Branch of the report information on the branch date the ID of the user who generated the report the date and time at which it was generated and the module of the report Body of the report Account This is the description regarding the account Currency The currency of the external account Rule Id Indicates the ID of the rule which when applied resulted in the matching of the entries Branch Branch of the respective account 15 10Savings YTD Interest Report System accrues and applies interest for savings and current accounts bas
166. hod specified for the Interest Rule When you link an Interest Rule to the product the description of the rule will be displayed Additionally you have the option to specify whether the interest product has to be considered for TDS Tax Deducted at Source calculation or not To indicate that the product is to be used for computation of TDS click Include for TDS Calc in the Product Definition screen for the Interest product you are maintaining In case you do not want to use a particular interest product to compute TDS leave the box unchecked Charges Allowances Products If you are creating a Charge product you must specify the basis on which you want to apply the charge Refer the section Charge Basis in Oracle FLEXCUBE in this manual for more details on various types of charge basis available in Oracle FLEXCUBE After you have specified the basis on which you would like to levy the charge you have to specify the liquidation related details for the charge product the account classes on which the product should be applied the frequency of liquidation the amount or rate of charge to be applied amongst other details You specify these details in the Product Preferences screen The preferences screen that will be displayed during product definition will be either interest preferences or charge preferences based on the product type All the other screens are the same for both Interest and Charge products cs ORACLE
167. ically displayed by the system You cannot change these values Indicating the Transaction Code The transaction code you have maintained for external transactions in the External Transaction screen will be displayed in the option list System will use the code you specify here during IC batch data collection and calculation The description you have maintained for the transaction code will also be displayed in the next field and you are not allowed to change this description Displaying the Booking date The system defaults the current system date and you will not be allowed to change this date vor ORACLE Specifying the Value Date In Oracle FLEXCUBE charges are calculated based on Value date or Booking date Hence it is very vital to maintain a value date for the transaction In case you do not define a value date here the system will default the current system date as the value date Make sure that the value date is not less than the last liquidation date for all charge products linked to the account which you have specified in the previous field The value date defined for a transaction will be used during the data collection of Charges and Charge calculation Maintaining the Amount Count The value you have maintained in this field will be used in two different ways depending on the type defined for the transaction code While defining the transaction code if you have maintained the transaction code type as e Amount the system
168. ich you apply a product When interest is calculated on a particular day for the account class the value of the UDE corresponding to the date will be picked up The UDE values of a condition can be different for different dates Typically you would want to open records with different Effective Dates if the values of UDEs vary within the same liquidation period Example REQUIREMENT 1 In your bank you have maintained Save Money LCY as an account class On this class of accounts you want to pay credit interest based on the monthly minimum credit balance You have defined the credit balance in terms of a slab structure and wish to pay a different rate of interest for each slab as follows ORACLE Amount 1 gt 1000 gt 2000 6 Rate 1 Amount 2 gt 2000 gt 3000 7 Rate 2 Amount 3 gt 3000 gt 5000 7 5 Rate 3 Amount 4 gt 5000 10 Rate 4 You would like to liquidate interest for this account class every six months The current liquidation cycle begins on 1 1 98 SETUP PROCEDURE Step 1 You define Monthly Minimum Credit Balance as an SDE in the SDE Maintenance screen You define a rule CRIN to calculate interest based on the monthly minimum credit balance in the Rule Maintenance screen While creating the rule you identified the SDE as Monthly Minimum Credit Balance and the UDEs as Amount 1 Amount 2 Amount 3 Amount 4 Rate 1 Rate 2 Rate 3 and Rat
169. ied daily on the accounts and the UDE value that is applicable for the period for which you are calculating interest will be picked up In this case interest for the period between 01 January 1998 and 14 March 1998 will be calculated at 6 and for the period between 15 March 1998 and 30 March 1998 at 6 5 Identifying and Specifying Values for UDEs For each account class you must specify the values of all the UDEs that you identified while building the rule The UDE value that you specify here will be picked up while calculating interest for the account class All the UDEs that you have identified for the rule to which the product is linked will be displayed here The UDEs that are displayed here can be of four types They are e Credit Rate e Debit Rate e Amount e Number The interest that you charge on a debit balance is an example of a debit rate The interest that you charge on a credit balance is an example of a credit rate A User Data Element will be an amount under the following circumstances e inthe case of a tier structure the upper and lower limit of a tier or a tier amount e inthe case of a charge when it is indicated as a flat amount e amount that can be used in the definition of formula When you build a rule you will indicate the UDE to be a number if the interest or charge is defined based on the number of transactions or the number of account statements A UDE under this category can also be used t
170. ier or slab structure if any is applicable This rate will be applied for an amount beyond the Free Amount if you have specified one If there is no slab or tier structure specify a big amount in the Slab Tier field in the Amount window and specify the rate For such a situation it is immaterial whether you select slab or tier as the amount basis Closing Special Condition More than one product may be applicable on an account at the same time You can temporarily stop applying a product on an account by closing it You can achieve this by removing the tick for the field open The product will cease to be applied on the account You can make the product applicable again by ticking the open box This feature is useful when you have to temporarily stop the application of a charge due to a condition Applying Consolidated Charges as Special Condition You can apply consolidated charges for an account as a special condition In the Customer Accounts Maintenance screen you need to click Consolidated Charge The Account Level Consolidated Charges Conditions screen is displayed Account Level Consolidated Charges Conditions Account Details Branch Code Account Product Details 4 10061 Product Code Waive Charges c 5 Minimum Maximum Discount Discount Percentage Discount Amount In this screen you define the following consolidated charge options for an account i
171. if you indicate that interest should be accrued for a formula will it be done You can opt to accrue the interest due to one formula and choose not to accrue the interest due to another formula that you are defining for the same rule Only a booking formula can have accruals You can indicate as a preference in the Product Preferences screen if all the accrual entries generated can be passed for a product rather than for individual accounts linked to the product The interest that is accrued can be posted into different accounts The result of each formula is an accounting role and you can map each into a different GL SL Accounting Head Rounding Required When building an interest rule you can indicate if the results of non booking formulae should be rounded off by choosing the Round Results option Tax Category If the formula that you are creating is a tax formula you have to specify if the tax amount would be borne by the customer or the bank For example if the tax on the credit interest that you pay your customer is borne by the customer you need to indicate this here If on the other hand you charge a customer interest on the debit balance and bear the tax on your income you should indicate that the bank would bear the tax In either case when you have to pay tax ultimately one entry would involve the Tax Payable GL The accounting Role in both cases would be Tax Choose the GL SL head depending on whether the cu
172. ii totes p B 14 3 JA 23 Charge Basis NUM CHO RET 14 3 JA247 Charge Basis NUM STOP PAY 14 4 JA 25 Charge Basis a 14 4 1426 Charge Basis ITEM COUNT iii isie eb 14 5 IADT Charge Basis TURNOVER a aes a ERA 14 6 14 2 8 Accounting Entries and Advices for 14 6 14 2 9 Accounting Entries for Write off Process ssseemeenennnnnnnnnzznnnznzzznnnnezzznnenznznennnnnnrnnnr nn sn mnn 14 12 15 QUERIES AND REPORTS scssscssscssssssccosssssscovssscsseossescecessvecesssisscescsssecsssesuassdsesnecosscssesosescsssobusiescesssessceoes 15 1 15 1 INTRODUGCTION 15 1 ONLINE QUERIES sea e lide ihe a IRE 15 1 15 2 1 The Interest Applicable an ACCount ss sssseenennnennnnnznnnnnennnnnnnnnnnnn snanar anna anna 15 1 15 3 INTEREST CALCULATION PROJECTED cccccccececececeseceeceeeecececeeececeeseeeeceeeeeeeceeecececececeeeeeeeeeeseeeeeeeeeeeeeess 15 4 15 3 1 Contentsof the REPOTE pe tn ae EEE EEE 15 5 15 4 LIQUIDATION CONTROL LIST ccccecssssscecececeesesececececsessnseeeceesceesesueaesecccecceeaaeseeececseaaeseeeeeeeesenseaeeeeess 15 6 15 41 Contents Of the RepOt
173. ined for Smart Current Money accounts An account can get linked only if its account class and currency has been linked earlier When creating an account in the Customer Account Maintenance screen you can click the Default button to fetch all the products along with their attributes that are applicable for the account You can then modify the values specific to the account However the Default button cannot be used once the account is authorized You can select the product from the option list provided alongside When maintaining an account in the Customer Account Maintenance screen you can opt to define special conditions for it If you opt to define special conditions for an account the general conditions defined for the Account Class to which the account belongs will NOT apply to this account To define special conditions invoke the IC Account Level Charges Conditions screen from the Customer Account Maintenance screen by clicking on the Charges icon In this screen you can view the account number and the branch to which the account belongs for which you are defining special conditions Applying Product on Account To calculate charges for an account you must apply a charge product on the account To recall every charge product that you create is built on a Charge Basis When you apply a product on an account charges for the account will be calculated according to the basis that you speci
174. ing SDEs the monthly minimum credit balance is zero this is because the account went into debit balance during the month If the account was in credit throughout the month the minimum of the balances would be returned by this SDE Similarly the monthly maximum debit balance for the month of March would be 20 000 The monthly average credit balance for the account will be the average of the credit balances in the account throughout the month To recall the Value Dated balances for the account we are discussing are as follows 01 March 1998 Nil 03 March 1998 50 000 Cr 05 March 1998 30 000 Cr 10 March 1998 20 000 Dr 25 March 1998 40 000 Cr 30 March 1998 10 000 Dr 31 March 1998 10 000 Dr Balances in the account for differing number of days would be as follows From To Balance Number of days 01 March 1998 02 March 1998 0 2 03 March 1998 04 March 1998 50 000 Cr 2 4 7 ORACLE From To Balance Number of days 05 March 1998 09 March 1998 30 000 Cr 5 10 March 1998 24 March 1998 20 000 Dr 15 25 March 1998 29 March 1998 40 000 Cr 5 30 March 1998 31 March 1998 10 000 Dr 2 The monthly average credit balance in this account for March 1998 would be 50 000 2 30 000 5 40 000 5 31 Hence the monthly average credit balance works out to be 17741 93 The monthl
175. ing the adjoining arrow button 22 Adjustment Transaction zz Code ia Formula Single line Language Parameters a Language Rule Description Elements Parameters Elements Language Description LI Language Header Input Bv Authorized Bv Modification Date Time Date Time Number Rule Interest is calculated for an account using the formulae that vou have defined for the interest rule applied on the account To recapitulate depending on vour definition the result of formulae mav be an amount that is to be e booked e not booked e atax amount A tax amount or an amount that is to be booked would usually be posted to the customer account The result of formulae that are posted to customer accounts will be reflected in the interest statement you provide your customer ORACLE 13 3 The codes that you have used while defining interest and charge rules SDEs and UDEs will be printed per se in an interest statement if you choose not to maintain the details for an interest statement For example when you defined a rule to calculate debit interest you may have assigned the code DRIN This rule code will be printed on the interest statement if you do not maintain a specific description for it while maintaining the interest statement The purpose of maintaining an interest statement is to explain to an account holder
176. ing the consolidated charge product is posted when the liquidation is executed in respect of the consolidated charge product after applying the applicable discounting and the range minimum maximum validations 11 8 End of Day processing for Debiting Receivable GLs In the Account Class maintenance screen you have specified the liquidation preferences for debit interest and charges in respect of those accounts classes where interest charge has to be debited from a Receivable GL before actually debiting the customer account You have also identified the Receivable GL in the preferences section of the IC Products screen As a result during the end of day processes the receivable GL is debited instead of the customer account for debit interest and charges The Debit Interest Notification message in the case of charges the Charge Notification message containing the due date and the amount due is generated and sent to the customer only if you have specified this as a preference for the account class The interest receivable is stored at the following level 3 Branch Account 4 Product 5 Formula Number 6 Book Date Details of the Related Account Receivable GL Actual Liquidation date which is computed on the basis of your specification in the Account Class screen Interest Amount Due and Charges Due are also stored 11 8 1 Liquidating Debit Interest and Charges Debit interest and charges can be liquidated either manu
177. ink CRIN to PROD1 an interest product You apply PROD1 to two savings account classes SMTMN 1 Smart Money local currency and SMTMN 2 Smart Money USD Interest for these account classes will be calculated using the monthly minimum credit balance in the accounts Now you want to apply different rates of interest on each of these account classes 10 on the monthly minimum credit balance in Smart Money 1 accounts and 10 5 on the monthly minimum credit balance in the Smart Money 2 accounts In the UDE maintenance screen you have to maintain the value of Rate 1 for SMTMN 1 as 10 and the value of Rate 1 for SMTMN 2 as 10 5 individually Branch Code You must specify the code of the branch for which the UDE Values being maintained are applicable as a general condition The branch code is displayed based on the Common Branch Restrictions for ICRATES for your branch The branches that are allowed for your home branch are displayed in the option list for Branch Code This occurs only if CRATES has been maintained as a Restriction Type in the Common Branch Restrictions screen If not all Branch Codes are displayed including the ALL option If your home branch is HO then the Branch Code option list displays ALL in addition to the list of branches allowed for your Home Branch If you try to maintain a UDE value for a specific branch the system will check if the UDE value has been first maintained with Branch Co
178. intained in the branch specified in the previous field Double click on the account that you want to specify as the offset account The offset account and branch detail fields are enabled only if the option to pay in is selected as the savings account 9 4 2 2 Recurring Deposit Recurring Deposit Account If you are maintaining an account class for a recurring deposit product here you need to check this option Move Maturities to Unclaimed Check this option to indicate whether the maturity proceeds should move to an unclaimed account if it remains unclaimed at the end of the tenor 9 4 2 3 Installment Frequency Specify the frequency of payment of installments Frequency can be specified in days months and years Move funds on Overdraft Check this option to indicate whether the Recurring Deposit account funds should move to an unclaimed account if it is overdue 8 ORACLE 10 1 10 2 10 Checking for Consistency in Data Introduction The information required to calculate interest and charges is maintained using different maintenance functions The information that you maintain should be authorized and complete in all respects For example you cannot calculate interest or charges for an account or an account class that is yet authorized You would be using incomplete information to calculate interest for an account if you have built a formula into an interest rule after you have linked the rule to a product Befor
179. interest is calculated based on the formula defined at the rule level The rule you define for true discounted products is applied exclusively for the discounted products The rule is maintained in the following two ways 1 Formula 1 Non booked DEPOSIT AMOUNT TENOR 100 YEAR ORACLE 7 2 1 The first formula is used for calculating the interest 2 Formula 2 Booked FORMULA1 POWER 1 RATE 100 TENOR YEAR The second formula is used for discounting the result of formula 1 To define the formula for the rule and to calculate the TD interest System Data Element SDE titled Deposit Amount is used Amount Block for Discount Check this box if vou wish to create amount block on the term deposit account Note the following e option is applicable only to Discounted Payment Method products e option is applicable only if the Discounted Interest option is chosen and interest liquidation account is a savings current account Liquidation Related Details Just as you defined the accrual related details for account classes linked to a product you should define liquidation related details as part of preferences for the product You can liquidate interest for an account e periodically e onanad hoc basis Monthly liquidation of interest on an account is an example of periodic liquidation When you do not liquidate interest on an account at fixed intervals th
180. ion in a month the days would be January 30 days February 30 days March 14 days unless you specify during liquidation that it has to be 15 days In the latter case if you are liquidating on 28 February as of 27 February it will be January 30 days February 27 days If you liquidate on 28 February as of 28th February it will be e Days for February in case of a non leap year e 28 days for February in case of a leap year If you liquidate as of 29 February on a leap year it will be e 30 Days for February If you specify that the actual days in a month should be used for calculation of interest days all calculations will be according to the calendar The value will be the exact number of days in the relevant period for example 31 days in January 28 days in February 29 days if it is a leap year and so on 3 12 ORACLE If you choose to consider each month as having 30 days all calculations will be based on this assumption Irrespective of the number of days in the relevant month according to the calendar the value will be calculated on the assumption that there are 30 days in every month Days a year The interest rate is always taken to be quoted per annum You must therefore indicate the denominator value the total number of days in the year based on which interest has to be applied You can specify the days in a year as e Actual number of days leap year will be 366 non leap year will be 365 e 360 days e
181. ion list in the Branch Code field would display only those branches that are allowed both for the rate code and the current branch The following example illustrates how the option lists in the Rate Code and Branch Code fields are populated Example You have created the following Common Branch Restrictions for the restriction type ICRATES Home Branch Allowed Branches a ORACLE Home Branch Allowed Branches 000 000 001 002 005 001 001 006 002 002 005 006 005 002 005 006 Rate Code Allowed Branches LIBOR1 000 001 002 005 006 LIBOR2 001 005 006 LIBOR3 002 005 006 You have maintained the following rules in the 1 Rate Code Branch Availability Maintenance In the Interest and Charges Rates Maintenance screen the following options would result if the maintenance were as mentioned above Branch Rate Code field Branch Code option list option list 000 LIBOR1 000 001 002 005 001 LIBOR1 LIBOR2 001 006 002 LIBOR1 LIBOR3 002 005 006 005 LIBOR1 LIBOR2 002 005 006 for LIBOR1 005 006 for LIBOR3 LIBOR2 or 002 005 006 for LIBOR3 If no Common Branch Restrictions were maintained and the restriction type ICRATES were not maintained in the SMS Branch Restriction Type maintenance the options in the Interest and Charges Rates Maintenance screen would be as follows Bra
182. ion on account classes you can refer to the section Maintaining Account Classes in the chapter titled Maintaining Mandatory Information in the Core Entities CE User Manual Product The IC product name associated at the User defined Elements Maintenance for the chosen account class For a given account class only one IC product should be associated Currency Code The currency for the chosen account class and IC product combination The list of all currencies maintained through the Currency Definition Detailed screen is made available in the option list provided User Element Identification The relevant UDE name for the chosen account class and IC product combination The UDEs here are made available from the Interest and Charges User Defined Element Values Maintenance screen Debit Credit The type of UDE It could be either associated to a debit interest rate or a credit interest rate The following points are noteworthy e Fora Deposit type account class a credit UDE alone has to be maintained e For savings and current account class types both the credit and debit UDEs have to be maintained e f the underlying account class of an IC product Credit or and Debit product gets modified in the IC maintenance this maintenance also has to be modified to reflect the new changes ORACLE 5 1 3 1 Printing UDE Values You can print out UDE values You can invoke the Interest amp Charge
183. is User Manual Function ID Function Description CFDFLTRT LD MM Floating Rate Input ICDBRMNT Interest amp Charges Branch Parameters Maintenance ICDCALAC Interest amp Charges Single Account Online Calculation ICDCHONL Interest amp Charges External Transaction Input ICDISFM Interest Statement Maintenance ICDLIQAC Interest amp Charges Single Account Online Liquidation ICDOCALC Interest amp Charges Multiple Account Online Calculation ICDOLIQ Interest amp Charges Multiple Account Online Liquidation ICDPRMNT Interest amp Charges Product Maintenance ICDRATES Interest amp Charges Rate Input ICDRESTR Interest amp Charges Branch Availability Maintenance ICDRLMNT Interest amp Charges Rule Maintenance ICDSDEM Interest amp Charges System Data Element Maintenance ICDTRNCD External Transaction Code Maintenance ICDUDEUL Interest amp Charges User Data Element Amendment ICDUDVAL Interest amp Charges User Data Element Maintenance ICRIP Interest Calculation Details ICRISFM Interest Statement Maintenance Report ICRLIQR Liquidation Control list ICRSAYTD Savings YTD Interest Report ICSLIQAC Online Liquidation Single Accounts Summary Function ID Function Description CFDFLTRT LD MM Floating Rate Input ICSOLIQ Online Liquidation Multiple Accounts Summary ICSUDVAL Interest amp Charges User Data El
184. is liquidated for an account the SDE is picked up from the account and the UDE value is picked up from the UDE Maintenance screen You can choose to print the details of the UDE and the SDE that was used to compute interest or charge for an account in the interest statement Example Rule ID CRIN SDE Monthly Minimum Credit Balance ws ORACLE UDE Rate Now assume that the value of the monthly minimum balance in an account is 10 000 and the value of Rate is 5 If you specified that the SDE and the UDE of the interest rule CRIN should be reported in the interest statement they will be printed along with their values You can choose to print the details of the e rule e the SDEs e the UDEs that were used to calculate interest or charge for an account in the interest statement in a language of your choice In the Elements field you can invoke a list of the SDEs that you identified for the rule specified in the Rule field Choose an SDE by double clicking on it Now for the SDE that you have chosen you can enter a description in the Header field You can describe the SDE in a language of your choice Similarly enter a description for each of the UDEs that you have specified for the rule 13 4 Generating Interest Statement The interest statement will be generated whenever interest is liquidated for an account This liquidation could either be the periodic automatic liquidation or an ad hoc one ORACLE
185. isplay RTCD1 If 002 is chosen the Rate Code option list will display RTCD2 User 2 with Home Branch as 001 The Branch Code option list will display 001 If 001 is chosen the Rate Code option list will display RTCD1 Rate Code Each IC Rate Code is defined by an alphanumeric code Effective rates are maintained for the rate code which is then linked to a product When a contract is processed the rates maintained for the rate code with the effective date linked to the product will be applied on the contract some of which can be changed To recall the IC Rate Codes are maintained in the IC Rate Code Branch Availability maintenance Accordingly in the Rate Code field in this screen you must select the IC Rate Code for which you are maintaining effective rates ie ORACLE 8 2 1 The option list in the Rate Code field is populated based on the following conditions e Only those rate codes that are available for users at the current branch according to the IC Rate Code Branch Availability maintenance are displayed e The maintenance of IC rates must be allowed for users at the current branch according to the restrictions maintained in the Common Branch Restrictions maintenance for the restriction type ICRATES If no Common Branch Restrictions have been maintained and the restriction type ICRATES has not been maintained in the SMS Branch Restriction Type maintenance the option list in the Rate Code field only displays those rules t
186. it and it will be used only for this purpose and all other operations of rollover remains as it is This event is applicable only for Discounted deposits Accounting Entries Accounting Role Amount Tag Dr Cr Indicator Paid in Advance TD INT Dr Customer TD INT Cr 14 2 9 Accounting Entries for Write off Process The following accounting entries are processed for each stage of Write off process on OD account Liquidating Accruals Dr Cr Account Amount Dr Customer OD account Interest accrued from last liquidation to till date Cr Interest Receivable Interest accrued from last liquidation to till date 14 12 ORACLE Reversal Interest Income Dr Cr Account Amount Dr Interest Income Interest Income Cr Suspense GL Interest Income Marking Principal Amount as Bad Debit Dr Cr Account Amount Dr Bad Debits Expense GL OD Principal Cr Suspense GL OD Principal Balance Transfer of OD Account mapped for the accrual for the new status WROF Dr Cr Account Amount Dr Interest Receivable Interest accrued after status change Cr Interest Income Suspense This will be the GL Interest accrued after status change 14 13 ORACLE 15 Queries and Reports 15 1 Introduction Information about the application of interest or charges on accounts can be retrieved in many ways You can retrieve
187. ive In the Query section of the screen click on option list in the User Data Elements field The user data elements associated with the interest product will be displayed If you have not specified an interest product UDE s associated with all the interest products will be displayed Select the user data element whose value has to be changed and enter the value of the UDE that has to be changed In the Modifications section of the screen select the UDE again and specify the new value for the UDE For example Let us assume that you want to change the fixed interest rate for all individual customers savings accounts e associated with the interest product CRIN e belonging to the account class INDSBL e inthe currency USD from 5 to 6 5 effective from 1 October 2001 To modify the interest calculation parameters make the following entries e Interest Product CRIN e Account Class INDSBL e Currency USD e Effective Date 01 OCT 2001 ORACLE Let us assume that the UDE associated with the product CRIN is Rate1 In the Query section select the UDE Rate1 and enter the element value as 5 This is to instruct the system to query for all USD accounts associated with the product CRIN belonging to the account class INDSBL for which the interest rate is 5 To change the interest rate to 6 5 In the Modifications section select the UDE Rate1 and enter the UDE value as 6 5 Consequen
188. l Oracle FLEXCUBE transactions you can use one of the following YTD based charge basis Charge Basis Describes YTD ITEM Charges are calculated on YTD basis applying the item COUNT count of the transaction YTD DR Charges are calculated on YTD basis depending on Debit TURNOVER turnover of the transaction YTD CR Charges are calculated on YTD basis depending n the TURNOVER credit turnover of an account YTD NET Charges are calculated on YTD basis depending on the 7 26 ORACLE Charge Basis Describes TURNOVER net turnover of an account Slab Tier For YTD calculation the system applies the slab basis to compute the current YTD volume and current cycle volume for every liquidation cycle The applicable rate is derived from the current YTD volume and the current cycle volume will be charged on the current rate In case there is a change in the rate the system will pass an adjustment entry This is calculated as Current rate Current YTD value Current cycle value less actual amount passed YTD upto previous billing Let us understand the above equation with the following example Example Let us assume the following slab structure is maintained Slab Rate 0 to 10 000 3 10 001 to 25 000 2 25 001 onwards 1 The Turnover for Various Months and liquidation is monthly Month Turnover Current Cycle YTD
189. lt of the formula is to be used in another formula and not to be posted to the customer account e that is the formula is used to calculate tax The tax can be borne either by the customer or the bank Periodicity The Periodicity of a rule application denotes whether the formula you are defining has to be e applied for each change during the interest period or daily e only for the last day of interest period periodic The following example illustrates how the concept of periodicity of application of a formula functions Example CACLVI is an account class On all the accounts belonging to this class you want to apply a credit interest on the minimum monthly balance The interest liquidation periodicity is every quarter Let us consider the liquidation period of January February and March 1998 The monthly minimum balance in an account belonging to the class is as follows e January USD 10 000 e February USD 15 000 e March USD 5 000 The current market rate should be applied on the account and the rate varies as follows for the three months e on31 January 5 e 28 February 5 5 e on31 March 4 5 If the application periodicity is daily the interest will be applied on the account as follows e January 5 on 10 000 e February 5 5 on 15 000 e March 4 5 on 5 000 You will notice that the balance considered is the minimum for each month and the rate applied is the rate as of the end of each month The su
190. m of the interest for all these months will be the interest for the period If the application periodicity is by period the interest will be applied on the account as follows 4 5 on 5 000 3 This is because for the by period application periodicity the minimum in the month of March will be picked up on which the rate applicable at the end of the period which is 4 5 on 31 March will be applied for the three months 3 10 ORACLE Note that the periodicity that you enter here is different from the liquidation periodicity The Periodicity that you define for a rule is a calculation periodicity The Liquidation Periodicity is the interval between two successive automatic liquidations e You can define the liquidation periodicity when you create a product e You define the periodicity of formula application in this screen Debit Credit The result of a formula will be an amount that has to be either debited from the customer account or credited to it For example the debit interest that you charge on an overdraft would be debited from the customer account while the credit interest that you pay would be credited to the customer account In this screen you indicate this Often when calculating interest for an account you would want to debit interest under certain conditions and under certain other conditions credit interest In such a case you can build formulae to suit both conditions The formula that is used to calculate i
191. maintaining Description Enter a description of the SDE that you are maintaining in this field Nature Once you fix the basis on which you want to apply interest for the SDE that you are defining either balances or turnovers which in turn could be as of the booking date or the value date you have to specify the nature of the balance or turnover The nature could be e Debit e Credit e Net In the example discussed in the beginning of this section we have seen various types of balances on certain days there is a debit balance while on certain other days there is a credit balance in the account These are referred to as debit balances and credit balances respectively Each balance in turn will have a periodicity and an aggregation operation attached to it These two are explained subsequently Basis Interest can be applied on this account differently using different data as the basis That is you can apply interest on the basis of item count the balance or the turnover in the account In Oracle FLEXCUBE Balances and Turnovers are referred to as Basis While balances will typically be used for interest application turnovers could be considered for charges turnover is any movement an account 4 3 ORACLE Balances and turnovers in turn can be considered as of the booking date or the value date of a transaction The booking date is the date on which a transaction is captured i
192. mount Tag Dr Cr Indicator CHG_BOOK CHARGE DEBIT CHG_INCOME CHARGE CREDIT 14 3 ORACLE Advices No advices allowed for this event 14 2 3 2 UDCH UDE Values Change No accounting entries allowed for this event Advices Advice type Description UDECA 14 2 4 Charge Basis NUM STOP PAY 14 2 4 1 CLIQ Charges Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator CHG_BOOK CHARGE DEBIT CHG_INCOME CHARGE CREDIT Advices No advices allowed for this event 14 2 4 2 UDCH UDE Values Change No accounting entries allowed for this event Advices Advice type Description UDECA 14 2 5 Charge Basis NUM ACCT STMTS 14 2 5 1 CLIQ Charges Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator CHG_BOOK CHARGE DEBIT 14 4 ORACLE Accounting Role Amount Tag Dr Cr Indicator CHG_INCOME CHARGE CREDIT Advices No advices allowed for this event 14 2 5 2 UDCH UDE Values Change No accounting entries allowed for this event Advices Advice type Description UDECA 14 2 6 Charge Basis ITEM COUNT 14 2 6 1 Accounting Entries CLIQ Charges Liquidation Accounting Role Amount Tag Dr Cr Indicator CHG_BOOK CHARGE DEBIT CHG_INCOME CHARG
193. n about the product intended for your bank s internal reference in this screen This information will not be printed on any correspondence with the customer The remarks are displayed when the details of the Interest or Charge product is displayed or printed a ORACLE 7 2 Defining Preferences for Interest Products While creating an interest product you identify one rule or interest calculation method that you would like to use to calculate interest for the product In linking a product to a rule you identify how the principal period and rate components are to be picked up from accounts on which the product should be applied You are yet to identify the accounts or account classes on which you would apply the product In the Interest Product Preferences screen specify the interest accrual and liquidation details for the product These specifications are referred to as Preferences In addition you also make the product applicable on an account by linking an account class or an account itself to the product For an interest product you can define the following preferences The account class and currency combination on which you would like to apply the product Accrual related details e Whether accrual entries for all accounts linked to the product should be passed at the product level If not they will be passed for each account separately e frequency at which interest should be automatically accrued e Whether
194. n differ from the one associated with the latter The system computes interest for the current liquidation cycle irrespective of the re association If back valued entries are posted into a period earlier than the current account class change an exception report will be generated to enable manual calculation of such entries Example You have maintained an IC product with the product code UBST with Monthly as the interest liquidation frequency preference Another preference you have set is that the liquidation date should be a day before the month end You have also associated the account class titled ACLASS1 with this product Another account class ACLASS2 is linked to the IC product titled UBSW The UDE values maintained for the ACLASS1 UBST combination are different compared to the values maintained for the ACLASS2 UBSW combination Case Let us assume that you open a customer account SB9008 on the 1 of September 2001 and link it to the account class ACLASS1 On the 15 of September 2001 you decide to de link the account SB9008 from account class ACLASS1 linked to product UBST and re associate it with the ACLASS2 linked to the product called UBSW This re association will have an obvious effect in interest amount since the interest rates associated with ACLASS2 UBSW are different from the ones associated with ACLASS1 UBST The system automatically computes interest for the entire liquidation cycle of i Sept to 29 S
195. n exit tax of 23 on this amount The following formula is used to arrive at the amount to be debited from the SSIA x 23x 100 7700 Here x is the amount to be debited from the SSIA 100x 23x 770 000 gt 77x 770 000 x 10 000 Euro Therefore a total of 10 000 Euro will be debited from the customer s SSIA The tax amount of 2300 10 000 7700 will be posted to a payable account and the customer receives the amount requested for i e 7700 A customer can make more than one lodgment deposit in a month into an SSIA You can generate a report at the end of a month to ascertain the number of lodgments made during the month If the deposit exceeds the maximum permissible limit you can refund the excess to the customer On maturity you can send the details of the SSIA to the Revenue department to claim the allowance made to the customer ORACLE 7 7 11 1 Setting Up Charge Product for SSIA Processing Specifying the account class All SSIA accounts will be made to report to an account class defined for the purpose You can select the account class in the IC Charge Product Preferences screen Identifying the charge basis When setting up a charge product for SSIA you have to identify the basis on which you want to calculate the allowance on the deposit made into an SSIA To recall for SSIA processing you may use one of the following charge bases e NET TURNOVER DR will return a value if the acco
196. n frequency is defined as quarterly for a product starting from the Account Opening Date For each account the periodic liquidation will fall due a quarter from its Account Opening Date Thus there will not be a fixed periodic liquidation date for all accounts linked to the product it will depend on the Account Opening Date of each account Liquidation at month ends and Days For a liquidation frequency in months or multiples of a month for example quarterly half yearly every two months etc you can specify that liquidation has to be carried out as of the last working day of the month In this case you should specify the Liquidation Start Date as the last date of the month from which you would begin liquidation For example for a month end quarterly liquidation beginning March 98 you should have the Liquidation Start Date as 31 March 98 You should also check the box against Liquidation at month ends Thus all the accounts that are linked to a product will have the same liquidation date fixed using the first liquidation date and frequency irrespective of their account opening date The first ever interest liquidation would therefore be for a period that may not reflect the frequency of liquidation for the product The following example illustrates this point Example The frequency of interest liquidation for a product is quarterly and the First Liquidation Date is 31 March 98 All accounts linked to this produ
197. n list 15 10 1 Contents of the Report The parameters specified while generating the report are printed at the beginning of the report Other content displayed in the Savings YTD Interest Report is as follows Header The following details are displayed in the header section SI No Field Name Field Description 1 Bank Indicates Bank Name 2 Branch Indicates Branch Name 3 Run Date Indicates Date on which report is generated 4 User 1 Indicates Operator ID 5 Run Time Indicates Run Time Body of the Report The following details are displayed as body of the generated report Sr No Field Name Field Description 1 Account Number Indicates Account Number 2 Customer Short Name Indicates Customer Short Name 3 Credit Interest Paid Indicates Total credit amount for YTD 4 Debit Interest Received Indicates Total debit amount for YTD 5 Credit Interest Accrued Indicates Total credit accrued amount for YTD 6 Interest Receivable Indicates Total debit accrued amount for YTD 7 Total Credit Interest Indicates Total Credit Interest 15 16 ORACLE 8 Total Debit Interest Indicates Total Debit Interest 15 11Report of TD linked to Overdraft Account You can generate the reports of TD s linked to the overdraft account of the customer from the TD Linked to OD Account Report screen You can invoke the screen by typing the code TDRLNKOD in the field at
198. n the system However the date on which a transaction takes effect that is the date as of which the accounting entries are passed and the balances updated could either be the booking date itself or a date in the past or future This date is called the value date of the transaction The following are examples of value dates and booking dates e Ms Yvonne Cousteau withdraws cash from her account today The booking date and the value date of the transaction are the same that is today s date e You pass a loan interest recovery transaction into your customer s account as of a date in the past The booking date of the transaction will be today while the value date will be the date as of which the transaction has to take effect The account will be debited as of the value date e A customer presents a cheque which has to be sent for clearing The float period for clearing is three days The booking date for this transaction is today s date and the value date three days hence The Basis could be one of the below e Balance e Turnovers e Loan Outstanding A system data element based on Loan Outstanding gives outstanding amount of the loan account after deducting the balance in the savings account from the principal amount Interest for a mortgage account is calculated on the basis of this outstanding amount Balance The balance in an account will be different when you consider it to be as of the booking date or as of the value dat
199. nch Rule ID field option list Branch Code option list 000 LIBOR1 000 001 002 005 006 001 LIBOR1 LIBOR2 000 001 002 005 006 for LIBOR1 or 001 005 006 for LIBOR2 002 LIBOR1 LIBOR3 000 001 002 005 006 for LIBOR1 or 002 005 006 for LIBOR3 005 LIBOR1 LIBOR2 LIBOR3 000 001 002 005 006 for LIBORI 001 005 006 for LIBOR2 or 002 8 4 ORACLE Branch Rule ID field option list Branch Code option list 005 006 for LIBOR3 If the Branch Code chosen is ALL which can happen only if your home branch is the Head Office branch then the Rate Code option list will display all the rate codes maintained in the IC Rate Code Branch Availability screen If the Branch Code chosen is any other branch other than ALL then the Rate Codes allowed for the branch in IC Rate Code Branch Availability screen will be displayed Example IC Rate Code Branch Availability maintenance Rate Code Allowed branches RTCD1 000 001 003 RTCD2 002 Common Branch Restrictions maintenance Home branch Allowed branches 000 000 001 002 001 001 002 002 003 003 000 is the HO Branch User 1 with Home branch as 000 The Branch Code option list will display 000 001 002 003 ALL If the ALL option is chosen the Rate Code option list will display RTCD1 and RTCD2 If he chooses 000 001 or 003 the Rate Code option list will d
200. nder Currency Restriction you will see two buttons If you want to maintain an allowed list of currencies for the product that you are creating click on the button adjacent to Allowed re ORACLE Likewise if you want to maintain a list Disallowed currencies click on the button against Disallowed 7 7 9 3 Branch Restrictions You may want to create a product specifically for certain branches of your bank In such a case you can either maintain a list of e Allowed branches for a product e list of disallowed branches Click on the button adjacent to Allowed or Disallowed to indicate the list type that you are maintaining 7 7 10 Maintenance of Customer and Category Restrictions To invoke Customer and Category Restrictions screen click Customer button from the Interest and Charges Product maintenance screen Customer Restrictions Product Code Product Description Class Details Default Frorn Class Class Code Class Description Branch restriction Categories List Disallowed Allowed Customers 1015 Description Customer Id Customer Name Restri Product Code The code of the Charge product for which you are defining preferences is displayed in this field Description Enter a brief description of the product This description will be associated with the product for information retrieval purposes aa ORACLE 7 7 10 1 Class Details 7 7 11 Class Code
201. ne and so on To achieve this result enter 05 in the Days field and 03 in the Months field Interest for the accounts linked to the product will be liquidated automatically according to your specifications during the end of day processing on the day the liquidation becomes due To specify ad hoc liquidation for a product enter a zero for day month and year in the liquidation frequency Ad hoc liquidation can be carried out any time on an account even if it has been defined for automatic liquidation An ad hoc liquidation of interest for an account defined for auto liquidation will liquidate interest till the date you specify when you carry out ad hoc liquidation The subsequent automatic liquidation will be for the remaining days in the liquidation period The following example illustrates this point Example For a product the liquidation periodicity has been defined as monthly to be carried out on the last working day of the month On 15 April you do ad hoc liquidation of interest for a few accounts linked to the product The interest for 14 days in April assuming that you specify the date of liquidation as 14 April will be liquidated during this ad hoc liquidation te ORACLE The next automatic liquidation of interest for all accounts involving the product would be on 30 April The number of interest days for accounts for which the ad hoc liquidation was performed would be 16 The values for the SDEs applica
202. neral conditions defined for the account class to which it belongs to apply at the end of the current liquidation cycle you must indicate it in this screen If you specify so the UDE values defined for the General Condition will be picked up for the account at the end of the current liquidation cycle The following example illustrates this concept ORACLE Example REQUIREMENT Assume you offer a short term fixed deposit of 45 days scheme called Shortfix Each deposit that is made would in effect be an account belonging to the Shortfix class of accounts You offer Shortfix as a product Prod01 to your customers for a period of three months beginning 01 January 1998 The following the implications e The rates for this fixed deposit varies according to market conditions The liquidation period for each account would vary depending on the day the deposit is made the account opened that is between 01 January 1998 and 31 March 1998 e interest period for all the accounts would be the same that is 45 days SETUP When defining the preferences You have to define special conditions for each account and link it to the fixed deposit rate code The interest rate prevalent on the day an account is opened would be its UDE value You would indicate that interest has to applied from the Account Opening date Next you would also define a General Condition for the Shortfix class of accounts becaus
203. ning special conditions you must specify the date from which you would like to apply interest Interest for this account will be calculated according to the special conditions that you define subsequently Charge Start Date For the account for which you are defining special conditions you must specify the date from which you would like to apply charges Charges for this account will be calculated according to the special conditions that you define subsequently ORACLE 9 3 1 2 By default charges on an account would be applied when the free banking period if any elapses This means that the Charge Start Date is arrived at by the System by adding the Free Banking Period days if any specified for the account class used by the account to the Account Opening Date If no Free Period has been indicated for the account class used by the account the Charge Start Date is defaulted to the Account Opening Date that is charges on the account would be applied right from the account opening date and displayed in the Special Conditions Maintenance screen You can override the default Charge Start Date and specify the desired start date for charge application Interest Booking Branch By default the current branch will be displayed in this field You have the option to select a different branch also Select the appropriate branch from the option list provided All the accounts maintained for the selected branch will be available in the o
204. nt Class amp Rate Association Maintenance screen that you maintain the above specifications You can invoke the Account Class amp Rate Association Maintenance screen by typing STDACUDE in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Account Class amp Rate Association Maintenance Branch Code Account Class Product Code Currency Code Debit Credit User Defined Elements E User Defined Element Id Condition Input By Authorized By Modification Date Time Date Time Number Authorized Open Here you specify the following Branch Code The code of the branch for which a UDE is maintained The branch code is displayed based on the Common Branch Restrictions for ICRATES for your branch The branches that are allowed for your home branch are displayed in the option list for Branch Code This occurs only if ICRATES has been maintained as a Restriction Type in the Common Branch Restrictions screen Otherwise all branch codes are displayed including the ALL option If your home branch is HO the Branch Code option list displays ALL in addition to the list of branches allowed for your home branch Account Class The account class to which a UDE applies to Only the following account class types are made available here e Deposit e Savings ORACLE e Current For more informat
205. nt currency Example You need to calculate interest for Save Money accounts in USD for the period between January 01 1998 and March 23 1998 You need to enter the following details on Interest Calculation screen e Account class for which you want to calculate the interest Save Money USD accounts 12 16 ORACLE e period for which you want to calculate the interest enter the start date as January 01 1998 and the end date as March 23 1998 The system displays the following details of the account Interest and Charges e Product Code e Formula Number e Tax e Dr Cr e Amount e Currency Account Summary e Principal Balance e Amount e Credit Component Balance e Debit Component Balance e Overall Balance 12 10Processing Capitalization of OD Interest You can capitalize OD interest by choosing interest and charge liquidation account as the current account When you choose interest and charge liquidation account as the current account the system liquidates the interest computed for the utilization of the OD limit into the current account by increasing the principal of the account Oracle FLEXCUBE will capitalize the interest calculated even when the utilization is more than the OD limit Oracle FLEXCUBE also stores the due Debit Interest in a data store to track interest separately based on the OD Interest Reversible check box maintained at the IC Product level The system calculates the out
206. nterest When interest is liquidated on 31 March 1998 for Smart Money accounts interest will be calculated for the period between 01 January 1998 and 30 March 1988 the rate of interest will be 6 5 for the whole period Please note that interest will not be calculated for the period between 01 January 1998 and 14 March 1998 at the rate of 6 and for the period between 15 April 1998 and 30 March 1998 at 6 5 However if you defined the periodicity for the rule as Daily the rule will be applied daily on the accounts and the UDE value that is applicable for the period for which you are calculating interest will be picked up In this case interest for the period between 01 January 1998 and 14 March 1998 will be calculated at 6 and for the period between 15 March 1998 and 30 March 1998 at 6 5 5 1 2 Identifying and Specifying Values for UDEs For each account class you must specify the values of all the UDEs that you identified while building the rule The UDE value that you specify here will be picked up while calculating interest for the account class All the UDEs that you have identified for the rule to which the product is linked will be displayed here The UDEs that are displayed here can be of four types They are e Rate e Amount e Number The interest that you charge on a debit balance is an example of a debit rate The interest that you charge on a credit balance is an example of a credit rate A User Data Element will b
207. nterest for the account would depend on the condition that is fulfilled Example Requirement For overdrafts in Current Account 01 CLC1 you want to apply debit interest based on the daily net balance in the accounts If the account is in credit balance throughout the interest period you would like to pay credit interest Solution Build a rule with two formulae Indicate that if the account is in a debit balance the result of the formula is to be debited from the customer account Build a second formula in which you indicate that if the account has a credit balance throughout the interest period the result of the formula is to be credited to the customer account Specify the Booking Flag for both these formulae as Booked meaning the result should be used to post an entry into the customer account When this rule is applied on an account only one formula will be picked up for interest calculation because only one condition would be fulfilled Interest would be calculated using the formula that is picked up For a Booking formula the system automatically checks this box and disables this option Days in a month The method in which the N of the formula for interest calculation PNR 100 has to be picked up is specified for a formula This is done through two fields Days in a month and Days in a year The number of interest days for an account can be arrived at in three ways One by considering e by conside
208. nts or account classes When you apply a product to many account classes interest for all the accounts will be calculated according to the rule or the calculation method to which the product is linked That is the principal period and type of rate not the numeric value will be picked up from the accounts in the same manner Also the accrual and liquidation details for all the account classes will be the same for all the account classes You can thus have all the attributes except those of User Data Elements UDEs like the rate tier structure etc same for accounts belonging to different account classes Product Code The product code for which you are defining preferences is displayed in this field 7 7 ORACLE Main Interest Rate UDE Specify the interest rate for the product The adjoining option list displays all the UDE s available in IC rule linked to that product You can choose the appropriate one 7 2 1 1 Accrual While building a formula for the rule to which you have linked the product if you indicated that the result of the formula is interest that should be accrued the interest amount for all the accounts linked to the product will be accrued When defining the preferences for this product you can choose to pass the accrual entries in the following manner e Pass an accrual entry for each account e Consolidate the interest to be accrued for individual accounts and track it against the product If you cho
209. ny given month for every account in your branch The system would have to pick up the actual value from each account for the month You charge interest on a customer s daily debit turnover Daily Debit Turnover is an example of an SDE Again you cannot define the value the system picks up the value 4 1 ORACLE 4 2 If you have defined Monthly Minimum Credit Balance as a SDE the system will pick up the monthly minimum credit balance from every account and use it to compute interest for the month Similarly if you have defined Daily Debit Turnover as a SDE the system will pick up the daily debit turnover in each account and use it to calculate charges The manner in which interest is applied based on an SDE is defined for an interest product Maintaining System Data Elements You will have different types of accounts in your bank such as current accounts savings accounts etc On each of these accounts you would want to apply interest differently On a savings account for example you may want to apply credit interest on the basis of the minimum credit balance during the month On a current account you may want to apply charges on the basis of the turnovers or levy debit interest on the basis of overdrafts Similarly there may be various criteria based on which you would want to apply interest on an account Each such criterion which the system has to pick up has to be defined as an SDE in the Inte
210. o ORACLE 7 7 5 1 Account Details Branch The Branch Code to which the account belongs for which you are defining special conditions is displayed in this field Account The Account number of customer for which you are defining special conditions is displayed in this field 7 7 5 2 Product Details Product You must identify the consolidated charge product using which the applicable charges would be consolidated Currency The charges would be consolidated in the currency defined for the selected consolidated charge product and this currency is displayed on the screen When you opt for a consolidated charge product all the consolidated charge parameters defined for the selected product are defaulted to the account for which the product has been linked You can change the default in respect of the following parameters e Minimum and maximum charge e Discount percentage and discount amount Maximum and Minimum You must indicate the charge amount range representing the maximum and minimum charge that can be applied for the account Open By default each charge consolidation charge setup that you set up is enabled and active You can also disable the setup by checking the Open box Waive Charges You can choose to waive consolidated charges for an account 7 7 5 3 Discount Discount Amount In this field you can indicate the flat discount amount if any which would be applicable for the consolidated charge
211. o all the accounts of the class This method of linking accounts is called the definition of a General Condition e linking an account itself to the product This method of linking accounts is called the definition of a Special Condition In the Interest Product Preferences screen you can link a product to an account class Often you may calculate interest for several account classes using the same interest calculation method In such a case you can apply the same product to all the account classes However since the interest rate or tier structure the values that you wish to apply on each account class may be different you can specify different values for each of the account classes in the UDE Maintenance screen To recall a tier structure or interest rate is defined as User Data Element UDE while building an interest rule Defining General Condition When you apply a product on an account class currency combination in the Interest Product Preferences screen you are defining a General Condition The attributes that you have defined for the product will apply to all accounts belonging to this account class currency combination For this combination of account class and currency you should define the UDE values in the UDE Values Maintenance screen The attributes of a product can be applied on several account classes even though the UDE values differ for each account class currency combination The following example illustrates
212. o build a formula you require certain building blocks These blocks could be SDEs UDEs or the result of other formulae that you have previously created Operators Operators are symbols that you would use to build mathematical expressions while defining a formula The following is a list of symbols that you would require to build a formula Operator Description Plus z Minus Divide by i Multiply Logical Operators Logical Operators are indicators of certain conditions that you specify while building a formula The following is a list of logical operators that you would require to build a formula AND OR and oe ORACLE AND the conjunction and OR the conjunction or gt greater than gt greater than or equal to please note that there is no space between the two symbols lt less than lt less than or equal to please note that there is no space between the two symbols lt gt Not equal to please note that there is no space between the two symbols equal to Functions The following are the functional operators available while defining a formula Operator Description ABS Absolute value of LEAST minimum of GREATEST maximum of SUM the total value of ROUND round to TRUNC integer part of FLOOR round off to the lower nearest CEILING round off to the higher nea
213. o store a numerical value that may be used in a formula Now for each of the UDEs that are displayed you must specify the values If the type of UDE that you have identified for the rule is a Rate element you can either specify a Rate Code or enter a value for the Rate element If you specify a Rate Code for the UDE the value that you have maintained for the rate code will be picked up while calculating interest However if you choose to enter a spread for the Rate Code the appropriate value will be computed A Spread is a positive or negative value that you add or deduct to the value specified for the Rate Code If you do not specify a spread the rate maintained for the Rate Code will be picked up If the type of UDE is an amount the value that you enter will be in the currency that you specified in the UDE amounts currency field in the Interest Preferences screen If you specified the UDE amounts currency as the local currency and the account class is in a foreign currency all UDE values will be converted to the local currency Currency conversions will be on the basis of the exchange rates maintained for the day vie ORACLE 9 3 Defining Special Condition When you define interest attributes for an account itself rather than for the account class to which it belongs it is referred to as a Special Condition Typically you would want to maintain a special interest condition for a special customer Example
214. ommission on HDB You can maintain a rule to calculate the commission on highest debit balance for a particular month In the IC Rule Maintenance screen you need to maintain the following details for calculating the commission 3 18 ORACLE SDE Elements User Elements HDB DR_COM_RATE Debit Credit Book Flag Periodicity Debit Booked Monthly Click Formulas to provide the following attributes to the formula for calculating the commission Click Formula Wizard to specify the formula HDB DR COM RATEJ 100 Or else you can define another formula using the defined SDE You can link this rule to IC product with liquidation at month ends No accrual for this rule and it is considered as a charge The CR GL mapped can be treated as a HDB commission income GL for the branch 3 19 ORACLE 4 1 4 Maintaining System Data Elements Introduction To calculate interest or charges for an account you require the following data e Principal The amount for which you want to calculate interest e Interest period The number of days for which you want to apply interest e Interest rate These components required to calculate interest are called data elements the elements that provide the required data to calculate interest Data elements are of two types e System Data Elements SDEs e User Data Elements UDEs System Data Elements SDEs can include be
215. on the account calculated through the IC module Refer the Daily Processing of Interest and Charges for information on End of Day processing for Debiting Receivable GL Specifying Charge Values Finally you must specify the values of the charge that you want to apply on an account class If you have opted to levy charges on the basis of a tier or slab you must first build the tier slab structure Corresponding to each slab tier enter the charge amount or rate Specifying an Amount You would specify the value of a charge as an amount when you levy charges on the basis of NUM ACCT STMTS Number of account statements NUM CHQ RET Number of cheques returned NUM CHQ ISS Number of cheques issued NUM STOP PAY Number of stop payments ITEM COUNT Number of transactions ADHOC STMT Number of ad hoc Account Statements In the charge amount field of the first row enter the charge amount applicable for per item For example enter the charge applicable for each extra statement for each extra cheque book and so on This amount will be applied on items beyond the number of free items Specifying a Rate You could specify the charge value as a rate when the basis is TURNOVER Total turnover Enter the rate according to the tier or slab structure if any is applicable This rate will be applied for an amount beyond the Free Amount if you have specified one 8 ORACLE 7 6 7 7 6
216. ose the latter option the cumulative value of all the accruals for accounts linked to the product will be passed as a single accounting entry Example You have defined debit interest DRIN as a product and linked it to the account class Current Money 01 Accrual entries passed for accounts linked to DRIN will be as follows e Dr Interest receivable e Cr Interest Earned Since accrual accounts for a formula are defined for a product to be applicable for all accounts linked to the product either through an Account Class or as a special condition the accrual accounts will be the same for all the accounts If you choose to accrue at the product level rather than at the account level a consolidated entry will be passed for the formula for all the accounts linked to the product Thus there will be a single accrual entry instead of many Frequency Let us recall the operations relating to accruals that you have performed so far When you build an interest rule you define if the result of a formula is to be accrued When defining the product to which you link the rule you would e Identify the GL SL to which you post the interest accrued Product Accounting Role Definition screen and e Specify that when the event accrual occurs you would post the entry to the GL SL that you identified Events Definition screen Now the frequency with which you accrue interest for the account classes has to be defined In t
217. pe as Account currency Similarly Charge basis on Local currency EXT VD LCY TUR EXT BD LCY TUR is enabled only those external transaction codes for which the type is defined as Local currency Also the system allows External transaction codes on count basis only for those products for which the charge basis is either EXT BD ITEM CNT or EXT VD ITEM CNT ORACLE 7 4 Refer to Transaction codes for processing external transactions and Booking of external charges sections in this manual for more details on maintaining transaction codes for external transactions and capturing details for external charges Preferences for Consolidated Charges Products When you create a consolidated charge product you can define the properties for the product such as accounting roles and accounting heads events branch and customer restrictions in the same manner as you would do for a normal Interest and Charges product For details refer the Products user manual You can also set the following specific preferences for a consolidated charges product in the Interest and Charges Consolidated Charge Product Preferences screen Click Preferences button from the IC Product Definition screen to invoke the Preferences screen Consolidated Charge Product Preferences Product Periodicity Currency Liquidation Month Account Details Charge Products 4 120121 Product Code Description Account Class
218. ple Let us assume that the tax rates effective 01 December 2000 and 01 Jan 2001 are 25 and 27 respectively You have indicated that for accounts associated with this product liquidations should be carried out only during month ends On 31 December 2000 the system calculates tax based on the tax rate 25 and applies the tax amount X However in January a few back dated entries are posted to December Consequently the system triggers recalculation of tax for December Interest tax will be calculated as follows depending on whether you choose the Current UDE vale or the Effective UDE vale Scenario Use Current If you specify that the system should pick up the current UDE value the system will use the rate of 27 for tax adjustment computations done for December 2000 3 8 ORACLE 3 3 4 Scenario I Use Effective If you select Use Effective the system will use the rate of 25 for adjustment tax computations done for December 2000 However to compute interest on transactions belonging to the current liquidation cycle the current rate of 27 will be used You can select the Use Current option when the formula associated with the rule is of type Tax However you have to ensure that you do not set the periodicity to Daily while defining the tax formula Attributes of Formula Using the SDEs and the UDEs that you have specified for a Rule you can calculate interest You have to specify the method for calculating interes
219. ple Accounts Online Liquidation for multiple accounts can be done via the Interest amp Charges Multiple Account Online Liquidation screen You can invoke this screen by typing ICDOLIQ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button interest amp Charges Multiple Account Online Liquidation Reference No a Refresh Rates from HO Date of Liquidation Product Code Account Number Select Product code 1010 Product Code Maker Date Time Checker Date Time Record Status Authorization Status You can query or modify the account details of the customers whose accounts are permitted to you for the query modification in the Group Code Restriction screen You can specify th following details here Reference Number The system displays the reference number Branch Code The system displays the code of the current branch Date Of Liquidation Enter the date for which you want to liquidate interest Interest for the accounts that you specify will be liquidated from the last liquidation date up to the date that you enter here The system defaults to yesterday s date 12 3 ORACLE Refresh Rated from H O Indicate that you would like to apply the latest interest rates maintained in the Head Office on an account that you are liquidating by checking this box If you do not check this box the system will use the interest rates that were last propagate
220. posits to the respective GLs Tax Interest products can also be used for computing the TDS Tax Deducted at Source on the interest earned for a customer In Oracle FLEXCUBE you can compute TDS only for savings current and TD accounts However this facility is not applicable for deposits booked under the Loans Booking Account Type Identify the Booking Account Type depending on the IC product type you are creating If the Booking Account Type is Interest the Interest and Charge will be liquidated into the Interest Booking Account maintained in the IC Special Conditions Maintenance screen However if the Booking Account Type is Charge the Interest Charge will be liquidated to the Charge Booking Account that you identify in the IC Special Conditions Maintenance screen Billing Liquidation Charge products can also be used for billing liquidation on the charges levied for a customer In Oracle FLEXCUBE all the charge products specified for billing liquidation will not be liquidated during the IC EOD process but will be processed during the invoice generation maintained for the consolidated billing product As a result the system handles the EOD processing separately for billing products and non billing products An unchecked box will indicate that the product is a non billing product The Billing Liquidation check box is applicable only for charge products and consolidated charge products Remarks Enter informatio
221. pplying Prepayment Penalties on Deposits For time deposits you can choose to apply prepayment penalties on any withdrawals before the maturity date Prepayment penalties are computed based on the following bases e The amount withdrawn prior to the maturity date 3 17 ORACLE 3 3 6 3 3 7 e The period that has elapsed between the start date of the deposit and the withdrawal date e The period that has elapsed between the last liquidation date and the withdrawal date For an account foreclosure prepayment penalty is computed during online liquidation and for partial withdrawals it is computed at maturity Maintenance for Prepayment Penalties As part of the Interest and Charges module maintenance in your bank you must maintain details that will enable the system to pick up the different elements that will be used in the calculation of prepayment penalties These parameters including products need to be operative on the account classes that you have specified as time deposit account classes Accordingly the following system defined elements SDE s are available as inbuilt parameters in Oracle FLEXCUBE which you can use to set up an Interest and Charges rule e An SDE for the amount withdrawn during a foreclosure or early withdrawal PENALTY_BASIS e SDE for the number of days elapsed between the start date of the deposit and the withdrawal date DAYS_FROM_START e SDE for the number of days elap
222. ption list provided for the Interest Booking Account field Interest will be booked into the account that you select in this field Charge Booking Branch By default the current branch will be displayed in this field If required you can choose a different branch also Select the appropriate branch from the option list provided All the accounts maintained for the selected branch will be available in the option list provided for the Charge Booking Account field Charge will be booked into the account that you select in this field Identifying Accounts for booking Interest and charges You can select the accounts for booking charges and interests on transactions processed at your bank To recall at the time of creating an IC product you have to identify the Booking Account Type depending on the IC product type you are creating If you have maintained the booking account type as Interest in the Interest and Charges Product Definition screen the Interest and Charge is liquidated into the Interest Booking account Similarly if the booking account type is Charge the Interest Charge will be liquidated to the Charge Booking Account By default the customer s account the current branch will be displayed in this screen the Interest Charge Booking Account and Interest Charge Booking Branch fields However you have the option of booking interest charge to a different account belonging to another branch also You can select t
223. quency refers to the interval between two successive periodic liquidations In this field the liquidation frequency gets defaulted from the interest product Implications of Closing UDE Record Continuing with the example if you close the UDE record with Effective Date 01 January 1998 in May 1998 for the entire liquidation period the UDE values specified for 01 April 1998 will apply for the product CRIN a ORACLE Only if the periodicity specified while creating a rule is Daily will the UDE values that you define for different effective dates be picked up If you specified the rule application periodicity as Periodic the UDE value as of the liquidation date will be picked The following example illustrates this Example You maintain a rule RULE 01 and specify the periodicity of application as Monthly This means that the rule will be applied on an account class or account every month You identify the UDE for this rule as RATE 1 You link this rule to a product CRIN You specify the iquidation periodicity of the product as Quarterly Next you apply CRIN to the Smart Money class of accounts This means that the interest that is calculated for Smart Money accounts will be liquidated every three months You define the value of the UDE Rate 1 as 6 in the UDE Maintenance screen and specify the Effective Date as 01 January 1998 On 15 March 1998 you want to apply a different rate 6 5 of i
224. re displayed including the ALL option If your home branch is HO then the Branch Code option list displays ALL in addition to the list of branches allowed for your Home Branch If you try to maintain a UDE value for a specific branch the system will check if the UDE value has been first maintained with Branch Code ALL If it has not been maintained an error message will be displayed forcing you to first maintain the UDE value for the Branch Code ALL The Rate Code option list will show all the rate codes maintained in the IC Rate Code Branch Availability screen During UDE maintenance for a specific branch if the Rate Code chosen is not available for the specific Branch then a configurable override will be displayed Example IC Rate Code Branch Availability screen Rate Code Allowed branches RTCD1 000 001 RTCD2 002 Common Branch Restrictions screen Home branch Allowed branches 000 000 001 002 001 001 002 002 000 is the HO Branch User 1 with Home branch as 000 The Branch Code option list will display 000 001 002 and ALL If he chooses ALL the Rate Code option list will display RTCD1 and RTCD2 However if he is doing a specific maintenance for Branch 001 and he chooses RTCD2 then a configurable override will be displayed os ORACLE 5 1 4 User 2 with Home Branch as 001 The Branch Code option list will display 001 If he chooses
225. record in the UDE maintenance screen with the following details Product Code CRIN Account Class Save Money Currency LCY Effective Date 01 04 98 Amount 1 gt 1000 gt 2000 Rate 1 6 5 Amount 2 gt 2000 gt 3000 Rate 2 7 Amount 3 gt 3000 gt 5000 Rate 3 7 5 Amount 4 gt 5000 Rate 4 10 GRAND RESULT For the same account class currency and rule combination the Rate has been changed This is effective from 1st April Now the first half yearly liquidation is in June For the first three months January March the values specified in the record dated 07 1 98 will be applicable For the period from April to June the values specified the record dated 07 04 98 will be applicable Rule Every product that you create is linked to a rule So when a product is selected from the Option list the rule which is linked to it gets defaulted here Account Class The different accounts in your bank may be classified into account classes The different types of current accounts and savings accounts that you maintain are examples of account classes In this field the account class gets defaulted from the interest product Currency Code In this field the currency code gets defaulted from the interest product sh ORACLE User Element Amounts Currency A User Data Element could be of Amount type when it indicates a tier structure a slab structure
226. removing the tick for the field open The product will cease to be applied on the account class You can make the product applicable again by ticking the open box This feature is useful when you have to temporarily stop the application of interest due to a condition when you stop the application of an interest product on an account class it will affect the entire current liquidation period If any accrual entries have been passed for the accounts due to the product that is closed they will be reversed by the IC Daily function at the end of the day All pending accruals will be reversed As a corollary when an interest product on an account class is applied again it will affect the entire current liquidation period The necessary accrual entries will be passed for the accounts by the IC Daily function at the end of the day On the other hand you can close the product itself if you want to close all the conditions applied for the product This should be done when you will no longer use the product All pending accruals will be reversed Maintaining Rate Codes An Interest Rule is made up of SDEs UDEs and formulae refer the chapter Maintaining Rules for details While creating a rule you only identify the UDEs that you would be using to calculate interest UDEs can be of the following types e Amount e Number e Debit Rate e Credit Rate You enter the values of UDEs such as Amount and Number in the UDE Maintenance scre
227. rest POWER to the power of MOD the remainder ORACLE Building Formulae Using the building blocks discussed earlier you can create or build formulae You can build any number of formulae for a rule using the SDEs UDEs and the results of formulae that you have defined for the rule The following example illustrates the procedure to create a formula Example REQUIREMENT You would like to pay interest on the monthly minimum credit balance for all current accounts You would like to apply different rates of interest for the following credit balances Credit balance Rate 1 10 000 1 5 10 001 15 000 1 75 15 001 20 000 2 above 20 000 3 SOLUTION Step 1 You define Monthly Minimum Credit Balance MMCB as SDE in the SDE maintenance screen Step 2 You define a rule let us say Rule 1 and specify Monthly Minimum Credit Balance Days and Year as the SDEs The following will be the UDEs for the Rule Amount 1 Amount 2 and Amount 3 these will represent the three upper limits in the tier structure Rate 1 Rate 2 Rate 3 and Rate 4 these will represent the four rates applicable for different amounts in the tier Step 3 When you build formulae to calculate credit interest for current accounts you choose these SDEs and UDEs appropriately along with the intermediate results in the following manner Slab Structure Case Result
228. rest amp Charges System Data Element Maintenance screen You can invoke the Interest amp Charges System Data Element Maintenance screen by typing ICDSDEM in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Account system data element maintenance I Enter Query Element Basis Balance Description Periodicity Daily Nature Debit v Field Name For User Defined Basis Type Value Dated Field Name Operation No Operation Days From Start Last Day Of Calculation Input By Authorized By Modification Date Time Date Time Number IM Authorized Open SDEs should be combined with UDEs into formulae to arrive at a method in which interest or charge has to be calculated Follow the example below which illustrate transactions that typically take place in a current account to understand how SDEs are defined Example The balance in Cavillieri and Barrett Finance Corporation s current account with you on 01 March 1998 is USD 10 000 4 2 ORACLE Subsequently the following are the transactions involving the account No Booking Date Value Date Amount Dr Cr 1 3 March 3 March 50 000 Cr 2 3 March 5 March 20 000 Dr 3 3 March 1 March 10 000 Dr 4 10 March 10 March 50 000 Dr 5 25 March 25 March 60 000 Cr 6 30 March 30 March 50 000 Dr Element Enter a unique ID for the System Data Element that you are
229. rest rate Interest Rate of Interest TD linked Amount available spread TD1 1000 4 2 6 6 5 ORACLE TD2 10000 8 2 10 TD3 2000 6 2 8 On 01 Jan 2011 if the customer has an overdraft of 7000 then the interest is calculated as follows Interest on OD 1000 6 2000 8 4000 10 100 DAYS YEAR 6 6 ORACLE 7 1 7 Defining Interest and Charge Products Introduction In this chapter we shall discuss the manner in which you can define attributes specific to an Interest or Charges product You can create an interest or charges product in the Interest amp Charges Product Maintenance screen You can invoke the Interest amp Charges Product Maintenance screen by typing ICDPRMNT in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button interest amp Charges Product Maintenance Product Code Include For TDS Calc Product Description Deposit Product Type Tax Description Billing Liquidation Slogan Charge Basis Product Group Description Product Group Description Booking Account Type Start Date Rule End Date Rule Description Remarks Maker Date Time Checker Date Time Record Status Authorization Status For any product you create in Oracle FLEXCUBE you can define generic attributes such as branch currency and customer restrictions accounting roles and heads etc by clicking
230. ring the actual number of days in a month e two the US method of considering 360 days in a year e three the Euro method of considering 360 days in a year 3 11 ORACLE Example If you indicate that you want to take the actual number of days in a month for calculating the interest days e 31 days be considered in January e 28 days would be considered in February for a non leap year e 29 days would be considered in February for a leap year If you indicate that 30 days should be considered as the interest days in a month e 30 days would be considered in January e 30 days would be considered as interest days in February irrespective of leap or non leap year e days in March would be considered as interest days and so on irrespective of the actual number of days in the month Based on your input here the number of days will be picked for a complete month for which interest has to be applied Elaborating You have indicated that the actual number of days in a month should be considered for interest calculation Interest was last liquidated on an account on 31 December 97 and the interest liquidation cycle is quarterly You would like to liquidate on 15 March 98 The number of days considered in this case for interest calculation would be January 31 days February 28 days March 14 days unless you specify during liquidation that it has to be 15 days If you had said 30 days should be considered for interest calculat
231. roduct to many account classes for which interest or charge is calculated using the same method but which have different UDE values For each condition you have defined for a product you should specify the values of the UDEs which you identified for the rule that is linked to the product in the User Data Elements screen The UDE values that you maintain here for a condition will be picked up when interest or charge is calculated for the account class Example When you create CRIN an interest rule you identify the SDE as Monthly Minimum Credit Balance and the UDE as Rate 1 At this stage you do not define the value of Rate 1 You link CRIN to PROD1 an interest product You apply PROD1 to two savings account classes SMTMN 1 Smart Money local currency and SMTMN 2 Smart Money USD Interest for these account classes will be calculated using the monthly minimum credit balance in the accounts Now you want to apply different rates of interest on each of these account classes 10 on the monthly minimum credit balance in Smart Money 1 accounts and 10 5 on the monthly minimum credit balance in the Smart Money 2 accounts In the UDE maintenance screen you have to maintain the value of Rate 1 for SMTMN 1 as 10 and the value of Rate 1 for SMTMN 2 as 10 5 individually Branch Code Specify the code of the branch for which the UDE Values being maintained are applicable as a general condition The branch code is
232. roducts or 10 2 10 2 5 Unauthorized General 10 4 1 DAILY PROCESSING OF INTEREST AND CHARGES ssrssnnsenneznzonnoennonosnnosnaosenosensenneenneenneenea 11 1 11 1 INTRODUCTION a f a SEA eal ese 11 1 11 2 MAINTENANCE CONSISTENCY CHECKS e SEa 11 1 113 LIQUIDATING INTEREST AUTOMATICALLY ccccsccccccecsesessscececececsessesececececsesaseeeeececeesesaseeeeeseseneneaeeeeees 11 1 143 4 Generating Interest Statement 11 2 11 3 2 Generating Rate Change ago 11 2 IT4 AUTOMATIC ACCRUALS b bba 11 2 11 5 REVERSINGAECCRUAL ENTRIES si 11 3 11 6 CHARGES APPLICABLE FOR CREDITOR OR DEBTOR AGREEMENTS 11 3 11 7 PROCESSING OF CONSOLIDATED CHARGES 00 scccsceeseeeeeeeeeeeceecesecesecaecaecaaecaeecaeeeaeseeeeeeeeeeseeseaeseaeenaees 11 4 11 8 END OF DAY PROCESSING FOR DEBITING RECEIVABLE GLS nn ta 11 4 11 8 1 Liquidating Debit Interest and Charges nanna nanna tt 11 4 11 8 2 Processing Write off for the new Status sess Il 7 11 8 3 Processing Recovery of OD Account sess
233. rrency Code You must indicate the combination of account class and currency for which the consolidation of charges using the consolidation product would be applicable This indicates the application of the charge consolidation as a general condition For an account class you can maintain different consolidation products for each currency Maximum and Minimum You must indicate the charge amount range representing the maximum and minimum charge that can be applied for the product Discount Amount In this field you can indicate the flat discount amount if any which would be applicable for the consolidated charge calculated for the product After the discounting has been applied the Maximum and Minimum validations are performed Alternatively the discount if any which is applicable can be specified as a percentage of the calculated consolidated charge amount Discount Percentage You can indicate the discount percentage if any which would need to be applied to the calculated charge After the discounting has been applied the Maximum and Minimum validations are performed The discount if any which is applicable can also be specified as a flat discount amount Open By default each charge consolidation charge setup that you set up is enabled and active You can also disable the setup by checking the Open box 7 4 1 2 Charge Notification Receivable General Ledger You can also indicate the receivable GL onto which the
234. s Returned file You can charge a penalty on every bounced cheque e NUM CHQ ISS Number of cheques issued For every extra cheque leaf issued you can levy a charge e NUM STOP PAY Number of Stop Payments You can levy a charge for every stop payment instruction e TURNOVER Total turnover You can charge on the basis of the turnover in an account You can opt to levy charges on turnovers exceeding a free amount that you specify in the Charge Product Preferences screen e ITEM COUNT Number of transactions If the number of transactions during a liquidation cycle exceeds a certain number you can levy a charge e ADHOG SIMT Number of ad hoc Account Statements Account statements are normally generated at a specific frequency If you generate an out of turn statement you can levy a charge e NET TURNOVER DR Dr Turnover You can charge a customer on the basis of the debit turnover in an account This will return a value if the account is in debit else zero will be returned e NET TURNOVER CR Cr Turnover You can also charge a customer based on the net credit turnover in the account Sum of all credits the sum of all debits net credit turnover This will return a value if the account is in debit else a value of zero will be returned Turnovers will be applied on an account only if the transaction code associated with the credit entry is defined with IC Balance Inclusion option e EXTCHG External Charge You
235. s User Data Element Summary screen by typing ICSUDVAL in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button interest amp Charges User Data Element Summary ee lt Authorization Status H Record Status gt Product Code ai Account Class ai Currency Code ai Effective Date B Branch Code Records per page 15 10f1 E Authorization Status Record Status Product Code Account Class Currency Code Effective Date Branch r r r r if From the summary screen specify the necessary criteria and click Search button to view the search results Double click to open a record for printing and then select Print from the Actions menu in the Application tool bar or click print icon whe ORACLE Interest and Charges User Data Element Maintenance Web Page Dialog ee I Product Code F Branch Code Effective Date F Description Product Accruals I Accrual Frequency Account Class I Currency Code Rule Description I User Element Amounts Currency F Description Liquidation Frequency Days I Months Years F Record Status Authorized Status Maker Id Maker Date Stamp F Checker Id Checker Date Stamp L ven water en Liquidation Frequency Days I Months Years Product A
236. s of the debit balance as follows e balances between 0 upto 10 000 5 e balances between 10 000 and 20 000 7 5 e balances greater than 20 000 10 Using the System Data Elements and the User Data Elements that you define you can create formulae to compute interest In other words formulae connect SDEs to the UDEs to give a result the interest that applies To use a metaphor SDEs and UDEs are the pillars on which an arch called formula rests Many arches combine to form a dome called Rule The things that you choose to put under a dome correspond to the account classes or accounts themselves on which the rule applies To build an interest rule you first need to define the System Data Elements that you would use in the Interest Rule For example if you would like to apply interest on the basis of the Monthly Minimum Credit Balance you should define it as an SDE in the System Data Element Maintenance screen When you apply the interest rule with Monthly Minimum Credit Balance defined as the SDE on an account class interest will be calculated using the monthly minimum credit balance in the accounts belonging to the account class Once you have defined an interest rule you have to define an interest product What is Product Your bank will pay and receive different types of interest and charges For example you would pay credit interest on credit balances in savings types of accounts Similarly on current accounts you would
237. s that you define for different effective dates be picked up If you specified the rule application periodicity as Periodic the UDE value as of the liquidation date will be picked up The following example illustrates this Example You maintain a rule RULE 01 and specify the periodicity of application as Monthly This means that the rule will be applied on an account class or account every month You identify the UDE for this rule as RATE You link this rule to a product CRIN You specify the liquidation periodicity of the product as Quarterly Next you apply CRIN to the Smart Money class of accounts This means that the interest that is calculated for Smart Money accounts will be liquidated every three months You define the value of the UDE Rate 1 as 6 in the UDE Maintenance screen and specify the Effective Date as 01 January 1998 On 15 March 1998 you want to apply a different rate 6 5 of interest When interest is liquidated on 31 March 1998 for Smart Money accounts interest will be calculated for the period between 01 January 1998 and 30 March 1988 the rate of interest will be 6 5 for the whole period Please note that interest will not be calculated for the period between 01 January 1998 and 14 March 1998 at the rate of 6 and for the period between 15 April 1998 and 30 March 1998 at 6 5 ORACLE 9 2 8 However if you defined the periodicity for the rule as Daily the rule will be appl
238. s the accounting roles that are applicable to IC Accounting Role CHG_INCOME CHG_BOOK DIV_TAX_EXP CUST_DVTAX_COD INT_IC_AJE DIV_TAX_PAD 14 2 Event wise Accounting Entries and Advices In this section we will discuss the suggested accounting entries and advices that should be generated for each event in process of Interest or Charge calculation Also note that some of the Amount Tags linked to the Accounting Roles are user defined 14 2 1 Charge Basis ADHOC STMT 14 2 1 1 CLIQ Charges Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator CHG_BOOK CHARGE DEBIT CHG_INCOME CHARGE CREDIT Advices No advices allowed for this event ORACLE 14 2 1 2 UDCH UDE Values Change No accounting entries allowed for this event Advices Advice type Description UDECA Advice Type 14 2 2 Charge Basis NUM CHQ ISS 14 2 2 1 CLIQ Charges Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator CHG_BOOK CHARGE DEBIT CHG_INCOME CHARGE CREDIT Advices No advices allowed for this event 14 2 2 2 UDCH UDE Values Change No accounting entries allowed for this event Advices Advice type Description UDECA 14 2 3 Charge Basis NUM CHQ RET 14 2 3 1 CLIQ Charges Liquidation Accounting Entries Accounting Role A
239. se an account Processing Online Liquidation You can invoke the Online liquidation function anytime during the day to liquidate interest according to the following selection criteria e all accounts e selected accounts 12 1 ORACLE e selected account classes e products e selected products These options allow you to liquidate interest for e all accounts linked to all products that is for the branch e all accounts linked to selected products e selected accounts linked to all products e selected accounts linked to selected products e selected account classes linked to all or specific products You can only liquidate interest for those products and accounts that are authorized You cannot liquidate interest for account classes and accounts with inconsistent data You can liquidate interest for the specified accounts for a date e not earlier than the last liquidation date e Not later than a day before the next working day in case of a holiday between today s date and the next working day In other words the Date of Liquidation for an account can be between e last liquidation date 1 e today s date e the day before the next working day Interest for the accounts will be liquidated for the period between the last liquidation date and the date that you specify as the liquidation date The system defaults to yesterday s date 12 2 ORACLE 12 3 Processing Online Liquidation for Multi
240. sed between the last liquidation date and the withdrawal date DAVS FRMLAST e An SDE to indicate if a withdrawal has occurred prior to the maturity date for a time deposit account PENALTY_APPLY to which a value of 1 is assigned if there is a premature withdrawal on the TD account Using the above SDEs which are inbuilt in Oracle FLEXCUBE you must maintain an interest rule for the calculation of prepayment penalties which will include these SDE s mentioned above and which will be linked to the appropriate interest product that you have maintained for calculation of time deposit interest The rule for penalty must be an additional rule in addition to the rule for computation of normal interest on the time deposit account Also in the transaction code used for debit entries to time deposit accounts you must indicate the computation of penalties on debit entries due to withdrawals from the account before the maturity date You must select the IC Penalty Inclusion check box to indicate this Refer to the Core Services module user manual for details about maintaining transaction codes In the interest rule that you maintain for prepayment penalty application you must also indicate that the SDE that you have maintained for the withdrawal amount must be a principal component You can indicate this by specifying the SDE in the Primary Element field in the IC Rule Maintenance screen Maintaining Rule for Calculating C
241. st was accrued from the adjoining option list To Customer Specify a valid customer ID to whom the interest was accrued from the adjoining option list From Date Specify a valid date from when you wish to generate the interest accrual report from the adjoining calendar To Date Specify a valid date till when you wish to generate the interest accrual report from the adjoining calendar Report Format Select the format in which you need to generate the report from the adjoining drop down list This list displays the following values e HTML Select to generate report in HTML format e RTF Select to generate report in RTF format e PDF Select to generate report in PDF format e EXCEL Select to generate report in EXCEL format Report Output Select the output in which you need to generate the report from the adjoining drop down list This list displays the following values e Print Select to print the report e View Select to print the report e Spool Select to spool the report to a specified folder so that you can print it later 15 15 ORACLE Printer At Select location where you wish to print the report from the adjoining drop down list This list displays the following values e Client Select if you need to print at the client location e Server Select if you need to print at the server location Printer Select printer using which you wish to print the report from the adjoining optio
242. st would be liquidated every month and so on If you opt to liquidate interest periodically you can automate the liquidation process The IC Batch function will liquidate interest automatically on the day it falls due for such accounts For certain accounts however you may want to liquidate the interest and charges as and when the need arises When you do not liquidate interest at fixed intervals the liquidation is referred to as ad hoc liquidation You can liquidate interest on an ad hoc basis by invoking the IC On line Liquidation function The On line Liquidation function can be invoked anytime to liquidate interest on accounts even if the accounts are marked for auto liquidation Example You apply PRO1 on Ms Elizabeth Bennet s account When you defined the preferences for PRODO1 you specified the frequency of liquidation for Ms Bennet s account as Monthly on month ends Interest for Ms Bennet s account will therefore be liquidated automatically every month on month ends On 15 April 1998 Ms Bennet closes her account in your bank You have to liquidate interest for her account for 14 days between 31 March 1998 and 15 April 1998 before you can close the account This is an example of ad hoc liquidation When you liquidate interest for an account on a day other than that marked for liquidation it is referred to a Ad hoc liquidation You should necessarily liquidate interest before you clo
243. standing principal as debit balance or total interest due of the OD account 12 17 ORACLE 13 Maintaining Interest Statement Details 13 1 Introduction When defining interest rules in the Rule Maintenance screen you identify the components that should be used in the calculation of interest that is the principal the number of interest days the tier structure the rate etc Interest for an account will be calculated according to the formulae defined for the rule that you have applied on the account The result of a formula is the interest for the account When you liquidate interest for an account you can generate an interest statement for the benefit of the account holder An Interest Statement would typically provide the account holder information about the interest that was applied on the account In Oracle FLEXCUBE you can build interest statements to suit the requirements of your bank You can define the details that you would like to include in interest statements in the Interest Statement Maintenance screen An interest statement will be printed for an account only if the statement details are maintained for it kejl ORACLE 13 2 Maintaining Interest Statements You can maintain Interest statements via the Interest Statement Maintenance screen You can invoke the Interest Statement Maintenance screen by typing ICDISFM in the field at the top right corner of the Application tool bar and click
244. stomer or the bank bears the tax Specify the tax category to which the Tax Rule belongs from the option list provided Only valid categories open and authorized are maintained here If the tax category is not maintained then the tax booked under this tax rule will not be considered for waiver tax computation processing However normal tax processing will occur as usual when the formula is Tax you will invariably be using the result of a previous formula e which would return the actual interest that is applied The tax formula should then indicate the method in which tax should be calculated on this interest Note that a tax formula will not be accrued It is suggested that a tax formula be periodic For specifying exemption of tax you will have to use the DIRT exempt SDE in building the rule When you create a product the accounting roles available would depend on the formulae that you have defined For example only if you have built a tax formula for an interest rule would the accounting role Tax be available for the product Calculation Parameters Local Currency Basis Check this option to indicate that the Basis Amount on which the tax is going to calculated should be converted to local currency 3 14 ORACLE Basis Specify factor for computation of the taxable amount The basis percentage should be greater than 0 and less than or equal to 100 The basis amount would first be multiplied by this
245. sume that you would like to liquidate interest one day before the month end You have to capture the following values in the respective fields Frequency Month 1 Liquidate before Month End Days 1 Consequently interest liquidation for the account associated with the product will be done a day before the month end Therefore in March interest will be liquidated on the 30 April interest will be liquidated on the 29 However the value date of the interest will be the month end For instance if the interest is liquidated on the 30 of March the Value Date will be 31 of March Similarly if interest is liquidated on the 29 of April the value date will be 30 of April Refund Tax on Preclosure Oracle FLEXCUBE provides you the flexibility to refund tax whenever a preclosure of a term deposit takes place in the system However you have the option to charge a penalty on the amount being withdrawn from a term deposit or when a term deposit is closed before its maturity date To facilitate this feature you have to select the Refund Tax On Preclosure option As a result tax collected on the interest due to the customer will be refunded on preclosure of a deposit Tax will be refunded for the interest that is calculated from the deposit value date till the preclosure date When you process a foreclosure for a term deposit the system will first check whether the Refund Tax On Preclosure
246. t obtained by using the formula will give you the charge that has to be applied on a dormant account 4 14 ORACLE 4 3 2 Refer to the chapter titled Building Formulae of this user manual for more details on creating a formula The Rule can then be linked to the appropriate product that you have maintained for calculation of charge on dormant accounts You may link the product to an account class in the Interest Product Preferences screen if you want to apply the same rule for all accounts reporting to a specific account class General Condition To define a special charge for a specific customer you can link the product to the account itself special condition rather than linking it to an account class Refer to Interest Application chapter of this user manual for more details on applying interest charge product on an account Implications of Working with User Defined Fields To associate different tax statuses with individual customers belonging to the same account class you may choose to associate the corresponding SDE with a user defined field maintained at the customer account level Example For each customer of your bank at the Customer Accounts Maintenance level you have created a user defined field UDF called TAXABLE The options available for this field are as follows e 1 indicating that the tax should be levied on interest earned by the particular customer e 0 indicating that tax sho
247. t Number If you have chosen to liquidate interest for specific accounts or products choose the account or product from the list of values available 12 8 ORACLE Date of Liquidation Enter the date for which you want to liquidate interest Interest for the accounts that you specify will be liquidated from the last liquidation date up to the date that you enter here The system defaults to yesterday s date Refresh Rates from H O You can indicate that you would like to apply the latest interest rates maintained in the Head Office on an account that you are liquidating by checking this box If you do not check this box the system will use the interest rates that were last propagated by the head office to calculate interest for the account being liquidated Example You have maintained the following account classes in your bank e Save Money USD Save Money INR e Save Money GBP e Save Money AUD e Smart Save Money USD e Smart Save Money INR You have maintained the following products e PRO1 e PRO2 You apply PRO1 to the Save Money accounts in all the currencies You apply PRO2 to the Smart Save Money accounts When defining the Product Preferences you specified the liquidation periodicity as semi annual The current liquidation cycle began on 01 January 1998 The last interest liquidation date for all the accounts is 31 December 1997 Requirement On 01 April 1998 the current system date you want to liquidate inter
248. t are to be liquidated on the holiday will be liquidated by the End of Day process that is run on the last working day before the holiday However processing for a holiday will be done on the next working day will be done on the subsequent working day if the holiday falls in the next financial cycle 11 1 ORACLE 11 3 1 11 3 2 11 4 An ad hoc liquidation can be carried out any time on an account even if it has been defined for automatic liquidation An ad hoc liquidation of interest on an account defined for auto liquidation will liquidate interest till the date that you have specified The subsequent automatic liquidation of the account will be for the remaining days in the liquidation period Generating Interest Statement Interest Statements will be generated for applicable accounts That an interest statement should be generated is specified for the interest liquidation event ILIQ Generating Rate Change Advice The Rate Change Advice will be generated when you mark the end of financial input for the day This advice will be generated for all those accounts that had a UDE change event in any of the UDE rate values in the products linked to them Automatic Accruals While building a formula for the rule to which you have linked the product if you indicated that the result of the formula is interest that should be accrued the interest amount for all the accounts linked to the product will be accrued When defining the prefer
249. t in the form of formulae Using the SDEs and the UDEs you can create any number of formulae for a Rule Click Formulas button to invoke Formulas screen Formula Number 4 Periodicity Daily Formula Number Book Flag Booked DaysinaYear Actuals Debit Credit Debit Daysina Month Actuals Rounding Required Accruals Required Interest Method Default From Currency Definition Tax Categon 5 Tax Description Calculation Parameters Booking Basis Percent Book Tax To Expense Basis Percent Account Tax Payable Currency Local Currency Basis Flag Basis Amount Tax Amount Option Option Method Decimals Decimals Decimals Decimals Units Units Units Units Formula Wizard The following are the attributes of a formula Formula Number Using the SDEs and the UDEs that you have specified for a Rule you can calculate interest You have to specify the method for calculating interest in the form of formulae Using the SDEs and the UDEs you can create any number of formulae for a Rule In this field the formula number that you are defining for a Rule will be displayed Book Flag The Booking Flag of a formula denotes whether the result of a formula should be 3 9 ORACLE e Booked that is if the resulting amount should be posted to the customer account e Non booked that is the resu
250. t isrener p a ae p tap 15 6 15 5 THE ACCRUAL CONTROL LIST cccccccceceseseceeseececseeceeseseceeeeeseeeeeeeeeeeseeeeceeececececececececececeeeeeeeeseeeeeeeeseeesers 15 8 15 9 1 Contentseof the Report E E Si press tari 15 8 15 6 THE MAINTENANCE FOR INTEREST STATEMENTS REPORT sccccecececececececececececececececeeeeseseseeeececeeeeecess 15 9 19 01 Contents Of NE rit d taa 15 10 15 7 THE SDE DETAIES REPORT a a a i ea 15 11 15 8 THE PRODUCT DETAILS REPORT cccccccececeesesescecececseseseeceesesescececeeseseseseecececececeeeceeeceeeceeeceeeceeeeeceeeeess 15 12 15 9 REPORT ON INTEREST CALCULATION DETAILS cccccccccceceeecececececeescecsceescecseseseseseseseseeeseseseeeeeseeeseeeess 15 13 ADGA Selection OPON Ss te l a 15 13 13 92 Contents Of the Reporte ei dip ebla E 15 13 15 10 SAVINGS YTD INTEREST REPORT iii ka i a Ka a a B a di 15 14 15 10 1 Contents of the Report ssi ssizsiszoszii E art tipi kv ts b ri ot 15 16 15 11 REPORT OF TD LINKED TO OVERDRAFT ACCOUNT ccccccccccececcseseseceseccseeesecesecesesesesesesesesessessseseeeess 15 17 16 SCREEN GLOSSARY sessccssiscicesscvssctaccessnncdeccsscviscastssavsesnscosscsdsceouscesusecbcssuecdseseadsescedesoacdescteassecsessatesesstes 16 1 16 1 FUNCTION DD a a a a a EEEa ies
251. t on several account classes you can charge at different scales for different accounts The following example illustrates this Example Requirement You have two classes of savings bank accounts Save Money and Smart Save Money You apply a Charge product CHG8 on both these account classes This product calculates charges using NUM ACCT STMTS number of account statements as the Charge Basis You provide an account statement every month to both account holders You would like to levy a charge for every additional account statement on both classes However you want to levy different charges for the respective account classes for the additional account statements that you provide as follows e for Save Money accounts USD e for Smart Save Money accounts USD 2 When defining the charge values for the product CHG8 you can enter different values for each account class as follows e for Save Money accounts USD e for Smart Save Money accounts USD 2 se ORACLE 7 6 1 Specifying Number of Free Items or Amount You can specify the number of items on which you would not like to levy charges as Free Items If the items exceed the value that you specify here a charge would apply You would specify an amount as a Free amount if you identified the Charge Basis for the product as Turnover Example Case 1 You provide an account holder with one account statement every mon
252. ter query on interest applicable for an account e You can maintain the format of the Interest Statement that you would like to generate for an account Retrieving Information Information about the application of interest or charges on accounts can be retrieved in many ways You can retrieve data in two ways e asareport e line query When you seek information in the form of a display on the basis of certain parameters you perform a query Typically you would query the system to provide your customer with immediate information such as the interest accrued on an account the interest rates applicable etc A report on the other hand is information retrieved mostly in a printed format However you can direct a report to one of the following destinations e the printer e the screen as a display e aspool file stored as a spool file to be printed later The reports that you have spooled can be printed or viewed through the Reports Browser screen 2 5 ORACLE 3 3 1 3 1 1 Maintenance Required for Processing Interest and Charges Introduction This chapter enumerates the maintenance of the following reference information used by the Interest and Charges module in Oracle FLEXCUBE e Branch Parameters e Rules Rules A Rule identifies the method in which interest or charge has to be calculated For example to calculate interest for an account you would require the
253. th You would like to levy a charge on every extra account statement that you provide In the Free Items field you would therefore specify the value as 1 Every extra account statement would attract a charge Case 2 You would like to charge a customer for debit turnovers that exceed USD 5000 You would specify this value as the Free Amount that you would like to allow Therefore debit turnovers exceeding USD 5000 would attract a charge 7 6 2 Specifying Charge Applicable You should define the following details about the charges that will be applicable for an account class and currency combination e the amount or rate of charge free transactions e slab or tier structure as the case may be and the applicable amounts and rates e The minimum and maximum charge to be collected in the case of the charge being a rate 7 6 3 Charging on Basis of Slab and Tier Structures To recall you can apply a charge based on the turnover in an account You can apply this charge based on a tier or slab structure The following example illustrates the concept of tiers and slabs Example You have defined the charge basis for Charge product CHG1 as TURNOVER that is the total turnover Let us study how the charges will be calculated differently for tier and slab amounts when this product is applied on the account of Cavillieri and Barrett Finance Corporation The debit turnover in the account of Cavillieri and Barrett
254. the SDEs and UDEs required and only change the values for the UDE that is the Rate You can do this in the UDE Values Maintenance screen when you define an interest product refer the chapter Creating Products In this screen you can define different UDE values for each account class on which you apply the RULE 01 That is you can specify that the rate to be applied for CLC1 is 5 the rate to be applied to CBP1 6 You can modify the values of the UDEs that you choose However remember to check the formulae where you have used the user data element The modified data element will apply only from the current interest period It will not have a retrospective effect Identifying the UDE Value that should be used for back period interest calculations While creating an IC Rule you have to define the UDEs that will be used in the formulae that you have defined For each UDE that you define for the purpose of calculating tax you can specify whether the tax should be computed based on the latest value for the UDE element or whether the system should use the UDE value effective for the corresponding liquidation cycle If you select Use Current irrespective of the liquidation cycle to which the calculation belongs the system picks up the latest UDE value and computes the tax amount If you indicate that the system should apply the Effective rate of UDE values the UDE value effective for the liquidation cycle will be picked up Exam
255. the account class is in a foreign currency all UDE values will be converted to the local currency Currency conversions will be on the basis of the exchange rates maintained for the day TD Rate Code Specify the rate code to be used for TD calculation The adjoining option list displays all rate codes maintained using the LD MM Floating Rate Input screen CFDFLTRT You can select the appropriate one You can use TD rate code only when Rate Chart Allowed flag is enabled for the account class linked to product and for defining TD Rate code in rule UDE Type it should be always maintained as Rate as Rate Code for interest rate pickup for the account Here you can define either Rate code or TD rate code and not both For more information on Floating Rate refer Maintaining Floating Interest Rates under Retail Lending User Manual Interest Rate Association for Account Class To recall you associate an account class to a specific IC product through the Interest amp Charges User Defined Element Values Maintenance screen The rates applied are based on the IC rules maintained Along with the different UDE rates defined in this screen you also need to maintain whether a particular UDE applies for a credit interest rate or for a debit interest rate Through this maintenance the debit or credit rate for a particular account class and currency combination can be found a ORACLE It is through the Accou
256. the clause was authorized stamp Mod No Displays the number of times the record was modified Auth Stat This is the authorization status of the clause Record Stat a the Status of the clause record It could be open closed 15 7 The SDE Details Report You can print the detail of the SDEs that you have maintained in your bank For generating a report on selected SDEs you should specify the From and To SDE IDs the details of SDEs falling in this range alphabetically will be generated To retrieve details of a single SDE enter it in both the From and To fields The Header Bank and This is the name of your bank and the branch through which you branch are logged in User id the user id of the person who is generating the report is printed Branch Date the current system date Date and Time the date for which you are generating the report The Body The report also provides the following information the SDE id a description of the SDE the nature whether the SDE is to pick up the debit credit or the net balance turnover the basis whether balance or turnover the periodicity whether daily monthly quarterly semi annual or annual the operation whether the minimum maximum average or no operation the name and user id of the person who created the SDE and the authorizer the start and end dates 15 11 ORACLE 15 8 The Product Details Report You can print in the form of a r
257. the first month on which you would like to liquidate charges that is the month from which the cycle would commence Liquidating Charges on Ad Hoc Basis When you do not liquidate charges at fixed intervals the liquidation is referred to as ad hoc liquidation If you propose to liquidate charges on an ad hoc basis for accounts on which you apply the product choose the Ad Hoc option when specifying the Liquidation Frequency An ad hoc liquidation can be carried out any time on an account even if it has been defined for periodic liquidation When you carry out an ad hoc liquidation for accounts defined for periodic liquidation charges will liquidated till the date you specify The subsequent periodic liquidation will be for the remaining days in the liquidation period The following example illustrates this point Example For a product CHGO1 the liquidation periodicity has been defined as monthly to be carried out on the last working day of the month You apply this product on the account of Ms Yvonne Cousteau On 15 April 1998 you liquidate the charges for the extra account statements that you have provided the account holder The charges for the account statements generated for 14 days in April assuming that you specify the date of liquidation as 14 April 1998 will be liquidated during this ad hoc liquidation The next periodic liquidation of charges for Ms Yvonne Cousteau s account would be on 30 April 1998 The
258. the liquidation date will be applied Closing Rate for Date An entry passed into an account for with a value date prior to the booking date is called a back dated entry For such a transaction you can specify whether you want to use the rate as of the period of the back dated entry or the rate of the current period This can be achieved by closing a rate for an effective date The following example illustrates this concept You are on 31 March and your rate table has got rates for the following dates 01 March and 15 March You pass an entry back dated to 03 March For this transaction the rate applicable will be picked up in the following manner Ifthe record for 01 March is open the rates applicable as of 01 March will be picked Ifthe record for 01 March is closed the rate applicable as of 15 March will be picked up Giving UDE Values for General Condition You will recall that when you create a product you link it to a rule A rule consists of System Data Elements and the User Data Elements A rule identifies the method in which interest or charge is to be calculated When building a rule you do not identify the values of UDEs P ORACLE When you apply a product on an account class in the Product Preferences screen interest for all the accounts will be calculated according to the interest rule that you have linked to the product That is the principal period and type of rate not the numeric value will be picked
259. the top right corner of the Application tool bar and click on the adjoining arrow button TD Linked to OD Account Report Branch Code Customer Report Format Printer At Report Output Printer You can specify the following details here Branch Code Specify the branch code of the customer The adjoining option list displays all the branch codes maintained in the system You can choose the appropriate one Customer Specify the customer number The adjoining option list displays all the customer numbers maintained in the system You can choose the appropriate one Report Format Select the format in which you want the report to be generated from the options provided in the drop down list The following options are available e HTML e RTF e PDF e Excel 15 17 ORACLE Report Output Select the output for the report from the options provided The following options are available e Print select this option if you wish to print the report e View select this option if you wish to view the contents of the report e Spool select this option if you wish to spool the report for further use PrinterAt Specify the name of the printer or select it from the option list provided All the configured printers are displayed in the list 15 18 ORACLE 16 Screen Glossary 16 1 Function ID List The following table lists the function id and the function description of the screens covered as part of th
260. this Example REQUIREMENT You have two classes of savings bank accounts Save Money and Smart Save Money On both these classes of accounts you want to pay interest on the monthly minimum credit balance You specify that the minimum credit balance in the Save Money accounts should be USD 2000 while that in the Smart Save Money accounts should be USD 5000 Due to the difference in the balance to be maintained in the respective account classes you want to pay different rates of interest as follows Save Money 5 Smart Save Money 10 THE SET UP You maintain Monthly Minimum Credit Balance as an SDE g ORACLE 9 2 1 9 2 2 You create a rule called Rule01 and identify Monthly Minimum Credit Balance and Credit Interest as the SDE and UDE respectively Note the following To calculate interest for Save Money and Smart Save Money accounts you require the same SDE and UDE as that specified for Rule01 you can therefore apply the product to which you link RuleO1 to both the account classes You do not specify the UDE values when you build the rule You create a product called SBUS01 and link it to RuleO1 In the Interest Product Preferences screen you apply this product to both the account classes Smart Save Money and Save Money Finally in the UDE Values Maintenance screen you specify the value of the Credit Rate for each account class linked to the produ
261. tificate Number Duplicate Cheque Instrument No 4 407g gt o E Account Payout Type Term Deposit Payout Details Percentage Offset Branch Offset Account Payout Component Principal v Recurring Deposit Payment Branch Payment Accounts Installment Amount Payment Date Payment Currency Account Details Account Description Country Code Amounts And Account Open Date Alternate Account Number Clearing Bank Code Address Location Media Installment Frequency Auto Payment Takedown D Move Maturities to Days Unclaimed Months Years Auto Deposit 1 Recurring Deposit Account Sweep Type Master Account Number Option Intermediary Details Intermediate 14 4 10710 gt oO Oo U Intermediary Code Move funds on Overdraft No Sweep Track Receivable Replicate Customer Signature Intermediary Required Intermediary Descrip Interest Charges Linked Entities Maker Checker Statement Joint Holders Fields Account Signatory TD Payout Details Interest Payout Details Mod No Record Status Authorization Status Rollover Histo Date Time Date Time 9 23 ORACLE Interest Start Date You can specify the date from which you would like to apply interest for the account for which you are defining special conditions Interest for this account will be calculated according to the special conditions that
262. ting interest However if you choose to enter a spread for the Rate Code the appropriate value will be computed A Spread is a positive or negative value that you add or deduct to the value specified for the Rate Code If you do not specify a spread the rate maintained for the Rate Code will be picked up If the type of UDE is an amount the value that you enter will be in the currency that you specified in the UDE Amounts Currency field in the Interest Product Preferences screen If you specified the UDE amounts currency as the local currency and the account is in a foreign currency the currency conversions will be on the basis of the mid rate for the day The UDE values that you specify here will only be applied to this account mie ORACLE 9 3 3 9 3 4 9 3 5 Specifying Effective Date for UDE Value Pickup The Effective Date of a record is the date from which a record takes effect You can maintain different values for a UDE for different effective dates for an account When interest is calculated on a particular day for an account with special conditions applicable the value of the UDE corresponding to the date will be picked up Typically you would want to open records with different Effective Dates if the values of UDEs vary within the same liquidation period Closing Values Applicable for Effective Date An entry passed into an account for with a value date prior to the booking date is called a back dated
263. tion tool bar and clicking the adjoining arrow button interest amp Charges Single Account Online Liquidation Reference No Account No Date of Liquidation Refresh Rates from HO Maker Date Time Checker Date Time Record Status Authorization Status Manual liquidation for either debit interest or charges or both is triggered through the Interest and Charges Multiple Account Online Liquidation screen available in the Application Browser 11 5 ORACLE You can invoke the Interest amp Charges Multiple Account Online Liquidation screen by typing ICDOLIQ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button e Interest 8 Charges Multiple Account Online Liquidation Reference No g Refresh Rates from HO Date of Liquidation Number Select Product code 1010 Product Code Maker Date Time Checker Date Time Record Status Authorization Status During manual liquidation you must specify the Account Number and the Value Date The account number is the book account The value date is defaulted to the application date You can change the Value Date if required While passing the entries the System ensures that the Value Date is not less than the Booking Date of the receivable Some of the checks performed during manual liquidation are e An override is displayed if the manual liquidation is done for an entry that is marked for auto
264. tly system will change the interest rate to 6 5 on all accounts that have been retrieved through the query An interest of 6 5 will be applied on all accounts that satisfy the specified condition from 1 October 2001 onwards To apply a different interest rate on the same set of accounts from 15 October 2001 you will have to maintain another record with the same interest product account class currency combination with the effective date as 15 October 2001 System will check all the customer accounts and displays the accounts that will be affected because of the change in the value of the interest calculation parameters Click Effected Accounts to view the accounts that have been affected The system will display a message if the new value of the interest calculation parameters has not affected any accounts Effected Accounts Details L Branch Account Product User Element User Element Value Old ORACLE 6 1 6 Building Formulae Introduction To apply interest or charges on an account you require certain data For example to calculate interest for an account you would require the following data e the principal the amount for which you want to calculate interest e period i e the number of days for which you want to apply interest e the rate the interest rate When you want to apply charges on an account you may have to specify the conditions for which you would need to
265. type of rate not the numeric value will be picked up from the accounts in the same manner However the numeric value for the rate can be different for each account class You can enter the actual values of the UDEs for each account class to which you link the product in the Interest amp Charges User Data Element Maintenance screen You can invoke the Interest Charges User Data Element Maintenance screen by typing ICDUDVAL in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button User Data Element Values Product Code Account Class Branch Code Currency Code Effective Date Rule Description Description Accrual Frequency Currency Product Accruals Description a Rate Chart Allowed Liquidation Days Months Years User Data Elements 100 User Element User Element Value Rate Code TD Rate Code Maker Date Time Checker Date Time Record Status Authorization Status sil ORACLE When interest is calculated for the account classes the principal period and the rate will be picked up in the same manner However the value of the rate that is to be applied on each account class will be different Maintaining Different Effective Dates for UDEs Example You have defined a product SAUSD1 While creating the product you linked it to the rule CRIN For CRIN you specified the SDE as Monthly Minimum Credit Balance and the UDE as Amo
266. ue date 15 Mar 2003 Since interest for is not yet liquidated interest calculation for is adjusted for this entry The same process is followed for all back valued entries with value dates lying in posted into the account up to and including 10 Apr 2003 The final adjusted interest is liquidated as part of end of day batch process on 10 Apr 2003 OD Interest Reversible Check this box to track interest reversible separately 7 2 1 2 Maintaining ILM Parameters Integrated LM Choose this option if you want to use the product for Integrated Liquidity Management processing Integrated LM Type Specify the type of System Account to which the product ought to be linked It can be e Pool Leader Indicates that the Rule will apply to Header accounts in a structure e Pool Reallocation Indicates that the rule will apply to Parent and Child Accounts below the Header Account 7 2 1 3 Debit Interest Notification Receivable General Ledger Before applying debit interest on personal current accounts you can choose to notify your customers through Debit Interest Notification messages In the interim period interest is debited from a Receivable before actually debiting the customer account While specifying preferences for Interest products you can identify the Receivable GL which is to be used for storing debit interests on a temporary basis Debit interest notification preferences are specifies for an account class through th
267. uld be waived Let us assume that you are defining an SDE called Apply Tax in the SDE Maintenance screen You identify TAXABLE as the user defined field that is to be associated with this SDE However when defining the TAXABLE field through the User Defined Values screen in the Core Services module ensure that you have marked TAXABLE as a mandatory field Main Screen Elementi Basis Balance Description Periodicity Daily Nature Debit v Field Name For User Defined Basis Field Name Type Value Dated v Days From Start Operation Operation Last Day Of Calculation Input By Authorized By Modification Date Time Date Time Number Authorized Open 4 15 ORACLE Select 1 from the option list to indicate that tax needs to be levied on the interest earned by the particular customer Select Zero to indicate that tax on interest can be waived 4 16 ORACLE 5 1 5 Giving UDE Values for Condition Introduction You will recall that when you create a product you link it to a rule A rule consists of System Data Elements and the User Data Elements A rule identifies the method in which interest or charge is to be calculated When building a rule you do not identify the values of UDEs When you apply a product on an account class in the Product Preferences screen interest for all the accounts will be calculated according to the interest rule that you have linked to the product That is the principal period and
268. unt 1 Amount 2 Amount 3 Amount 4 Rate 1 Rate 2 Rate 3 and Rate 4 You have two classes of savings accounts Smart Save Money and Save Money You calculate interest for savings bank accounts based on the monthly minimum credit balance In the Product Preferences screen you can therefore apply SAUSDT to both these account classes since the interest calculation method is the same However the interest rates that you want to apply on each account class is different On Smart Save Money accounts you want to pay the following rates of credit interest Amount 1 gt 5000 gt 10000 15 Rate 1 Amount 2 gt 10000 gt 12500 15 5 Rate 2 Amount 3 gt 12500 gt 15000 16 Rate 3 Amount 4 gt 15000 16 5 Rate 4 On Save Money accounts you want to apply the following rates of credit interest Amount 1 gt 1000 gt 2000 9 Rate 1 Amount 2 gt 2000 gt 2500 11 Rate 2 Amount 3 gt 2500 gt 3000 12 Rate 3 Amount 4 gt 3000 14 Rate 4 Now in the UDE Maintenance screen you can maintain separate records for each of these account classes The record that you maintain would contain the actual values of the UDEs for each account class When interest is calculated for Smart Save Money accounts the actual values for Amount 1 Amount 2 Amount 3 Amount 4 Rate 1 Rate 2 Rate 3 and Rate 4 will be picked up from the record th
269. unt is in debit else the value will be zero e NET TURNOVER CR will return a value if the account is in debit else the value will be zero Since the allowance is made for the net credit turnover Sum of all credits the sum of all debits in the account the charge basis would typically be NET TURNOVER CR Specifying the transaction code A Transaction Code is associated with every accounting entry in Oracle FLEXCUBE To track the credit entries posted to an SSIA account you have to associate the transaction codes for which the IC Balance Inclusion option is checked This is a mandatory requirement for processing SSIA The transaction code is selected at the time of defining accounting entries in the Product Event Accounting Entries Maintenance screen Thus all accounting entries that are generated as a result of lodgments into an SSIA account will be tracked under the transaction code for which IC Balance Inclusion option is enabled Specifying the accounting roles The customer is always debited for the charge amount for an SSIA however the customer will be credited with the charge amount which is referred to as an allowance on the deposit The following accounting roles will be maintained for SSIA Accounting Role Description Dr Cr Indicator CR_ALLOWANCE SSIA Allowance made on the SSIA Dr Receivable A C deposit CHG_BOOK Customer A C Allowance received by the Cr customer
270. ustomer 2 3 ORACLE 2 5 2 6 2 7 Using Prevailing Market Rates The interest rates for a currency can either be fixed or floating If you want to apply a fixed interest rate for an account class you can define so for the product The prevailing market rate for a currency can be maintained in the Rates Maintenance screen The rates maintained here can be updated every time there is a change You can apply prevailing rates on an account class by specifying the rate codes that you assign in the Rates Maintenance screen in the UDE Values Maintenance screen Combining Accounts If you have a customer with many accounts you can combine them for the purpose of application of interest For example if you have a corporate customer who has ten current accounts you can combine them for the calculation and application of interest When defining interest details for a customer account in the Customer Account Maintenance screen you can maintain the information necessary for the combination of accounts Combination can be of two types for calculation this involves combined calculation and booking or for booking only e f you specify that the combination is for calculation the balances in all the accounts will be added to the balance in a specified account and the interest will be calculated on the sum of the balances When liquidation takes place the interest and charges will be booked to the specified account e f you specify th
271. ustrates this Example You have the following types of accounts in your bank e Savings Bank accounts in USD e Current accounts in USD Now the rate of interest that you pay on current accounts in USD would be different from that which you pay on savings accounts in USD In the Rates Maintenance screen therefore you would have to maintain two different interest rates One which you would want to apply to savings accounts and another which you would want to apply to current accounts SAn ORACLE You must assign the different rates that you maintain for a currency unique Rate Codes For example for savings accounts in USD you can define a Rate Code such as SBUSD When you calculate interest for USD savings accounts linked to the rate code SBUSD the rate that you maintain here will be picked up Defining Effective Date for Rate Code Each rate that you maintain for a Rate Code and Currency combination should have an Effective Date associated with it The Effective Date of a record is the date on which a record takes effect The Effective Date that you specify for a rate is the date on which the rate comes into effect Once a rate comes into effect it will be applicable till a rate with another Effective Date is given for the same Rate Code and Currency combination The following example illustrates this Example Rate Code SBUSD Currency USD Effective Date Interest Rate 01 Jan 98 12 5 14 Jan 98
272. wal of TOD during batch processing 7 3 4 3 Charge Basis for External Charges External charges are the charges levied for all NON Oracle FLEXCUBE transactions like faxes sent or concentrator charges etc To maintain the charge product for the external charges you can use the charge basis defined below Charge Describes Basis EXT BD Indicates the count of external transactions based on booking date ITEM CNT External transaction has the flexibility to be charged on booking date or on a value date basis System stores the count at both level booking date and value date EXT VD Indicates the transaction count of external transaction on Value date ITEM CNT basis EXT BD Indicates the turnover of external transactions on basis of booking date ACV TUR This turnover is always in the account currency EXT VD Indicates the turnover of external transactions on basis of value date ACV TUR This turnover is always in the account currency EXT BD Indicates the turnover of external transactions on basis of booking date LCY TUR This turnover is always in the local currency EXT VD Indicates the turnover of external transactions on basis of booking date LCY TUR This turnover is always in the local currency While applying charge basis on Account currency EXT VD ACY TUR EXT BD ACV TUR the system allows only those external transaction codes for which you have maintained the ty
273. which interest is accrued in the order of the dates as of which accruals were done Account This is the account for which accrual details are being reported Product This is the product code of the product to which the account is linked An account can be linked to more than one product In such a case the accrual due to each product is shown separately Currency This is the currency of the account Formula This is the number of the booking formula in the rule due to which the number accruals have been made A rule may have more than one booking formula linked to it In such a case the accrual due to each booking formula is shown separately 15 8 ORACLE Current This is the amount accrued during the accrual session being reported Accrual Ley If the account is in a foreign currency the LCY equivalent of the Equivalent current accrual amount will be shown The conversion will be as of the date on which the accrual entries were passed Accruals to This is the total interest in the account currency that has been date accrued on the account till the date as of which the Accrual Control report is generated Accrual A C This Is the account into which the accrual entries were passed To recall one leg of the accrual entry is passed into a receivable or payable account while the other is passed to a profit or loss account P amp L A C This is the profit or loss account into which the accru
274. x This feature is useful when you have to temporarily stop the application of interest due to a condition when you stop the application of an interest product on an account it will affect the entire current liquidation period If any accrual entries have been passed for the account due to the product that is closed they will be reversed by the IC Daily function at the end of the day As acorollary when an interest product on an account is applied again it will affect the entire current liquidation period The necessary accrual entries will be passed for the account by the IC Daily function at the end of the day On the other hand you can close the product itself if you want to close all the conditions applied for the product This should be done when you will no longer use the product Defining UDE Values for the Account A rule identifies the method in which interest or charge is to be calculated An interest rule consists of System Data Elements and User Data Elements When you apply a product on an account while defining special conditions for it interest for the account will be calculated according to the interest rule that you have linked to the product That is you merely define the following e how the principal should be picked up from the account e period for which you want to apply interest ae ORACLE e the type of rate not the numeric value that should apply You now have to specify the numeric values o
275. y interest will be calculated as follows e Total interest for the liquidation period three months would be 4 6 ORACLE gt interest on the minimum credit balance for the first month interest on the minimum credit balance for the second month interest on the minimum credit balance for the third month On the other hand if the SDE periodicity is quarterly the SDE would be the minimum credit balance over the quarter Hence the interest for the liquidation period would be the interest on the minimum credit balance during the entire three month period The periodicity that you define for an SDE is not the same as the periodicity of rule application defined for an interest rule The periodicity of rule application which could be daily or by periodic also has a role in the way an SDE is picked up please refer the chapter Maintaining Rules for details Operation An aggregation operation denotes the method in which a balance or turnover should be picked up over its periodicity As discussed under Periodicity for the Minimum credit balance that has to be picked up over a month the Maximum debit balance for the month the Minimum and Maximum denote an aggregation operation Another aggregation operation would be the average For example you could have the average monthly debit balance or the average monthly credit balance as the attributes of an SDE In the example discussed under Defin
276. y average debit balance in this account would be 20 000 15 10 000 2 31 Hence the monthly average debit balance works out to be 10322 58 The average net balance for the month in this account would be 50 000 2 30 000 5 40 000 5 20 000 15 10 000 2 31 Hence the average monthly net balance for the month works out to be 4193 54 If you choose to apply interest on the basis of the credit debit or the net balance you can specify that the balance to be considered is e the minimum e the maximum e average balance in the account over the period specified by you If the periodicity for an SDE is daily and the basis is balance the balance taken will always be the net balance for the day It cannot be the minimum maximum or average balance The aggregation operation of sum can be used when you want the SDE to return a value that is a sum of a few values A typical usage of this aggregation operation will be when want the sum of turnovers debit or credit or a sum of debit or credit items over a period Days from Start You can enter a value in this field if you want to compute interest for an account on the monthly minimum credit balance or the maximum monthly debit balance or the average balance for a specific period 4 8 ORACLE The balance in the account between the date that you specify here and the date that you specify in the Last Day of Calculation field
277. y removing the tick for the field Open The product will cease to be applied on the account class You can make the product applicable again by ticking the Open box Minimum and Maximum You must indicate the charge amount range representing the maximum and minimum charge that can be applied for the account 7 3 3 2 Charge Notification Receivable General Ledger Before applying charges on personal current accounts you can choose to notify your customers through Charge Notification messages In the interim period charges are debited from a Receivable before actually debiting the customer account While specifying preferences for Charge products you can identify the Receivable GL which is to be used for storing charges a temporary basis Charge notification preferences are specified for an account class through the Account Class Maintenance screen You can specify the Receivable GL only for products linked to rules having debit formulae This feature is applicable only for the debit interest and charges on the account calculated through the IC module von ORACLE 7 3 4 7 3 4 1 Refer the Daily Processing of Interest and Charges for information on End of Day processing for Debiting Receivable GL Track Receivable Auto Liquidation Check this box to indicate that receivables should be tracked to collect charges during auto liquidation By default this option will not be checked Force Charges during A c Closure
278. y the Maximum Charge Limit for the account of Cavillieri and Barrett Finance Corporation as USD 3500 The debit turnover in Cavillieri and Barrett Finance Corporation s account is USD 50 000 When charges are calculated only USD 3500 will be charged on the debit turnover of USD 50 000 even though the actual amount that should be levied on the debit turnover should be USD 3750 USD 50 000 falls into the third slab for which you have specified that charge should be calculated at 7 5 Specifying Charge Value Finally in this screen you must specify the values of the charge that you want to apply on the account for which you are defining special conditions If you have opted to levy charges on the basis of a tier or slab you must first build the tier slab structure Corresponding to each slab tier you must enter the charge amount or rate Specifying an Amount You would specify the value of a charge as an amount when you levy charges on the basis of NUM ACCT STMTS Number of Account Statements NUM CHQ RET Number of cheques returned NUM CHQ ISS Number of cheques issued NUM STOP PAV Number of Stop Pavments ITEM COUNT Number of transactions ADHOC STMT Number of adhoc Account Statements fu ORACLE 7 7 4 7 7 5 Specifying a Rate You could specify the charge value as a rate when the basis is TURNOVER Total turnover Enter the rate according to the t
279. you define subsequently Maturity Date Indicate the Maturity Date of the recurring deposit Next Maturity Date Specify the maturity date of the new RD if the liquidation of the RD is to create a fresh recurring deposit Auto Rollover Indicate whether Auto Rollover is permissible for the recurring deposit Close on Maturity Indicate whether the deposit should terminate at the end of the tenor Move Interest to Unclaimed Indicate whether the maturity proceeds should move to an Unclaimed account if it remains unclaimed at the end of the tenor Move Principal to Unclaimed Check this option to indicate whether the maturity proceeds should move to an unclaimed account if it remains unclaimed at the end of the tenor 9 4 2 1 Rollover Details If you indicate that Auto Rollover is required for the RD you have to specify e Whether the deposit has to be rolled over with Principal and accumulated interest e Whether the amount involved is a special amount e Whether only the principal is to be rolled over Rollover Amount Here you can specify the rollover amount for the deposit Offset Branch Choose the branch ID for the offset account The offset account and branch detail fields are enabled only if you choose the pay in option as Pay in by Savings ate ORACLE Offset Account Specify the customer account from which the money is to be debited for booking the TD The option list displays all valid account numbers that is ma

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