7. Annexure B – IC Rule Set-up
7.1 Introduction
This Annexure lists the Interest and Charge (IC) rules that need to be maintained for the Integrated Liquidity Management module of Oracle FLEXCUBE. It also gives the UDEs and rates for which values need to be maintained.
This chapter contains the following sections:
- Section 7.2, "IC Rule Maintenance"
- Section 7.3, "UDE Value Maintenance"
- Section 7.4, "IC Rates Maintenance"
7.2 IC Rule Maintenance
This section contains the following topics:
- Section 7.2.1, "Maintaining IC Rules"
- Section 7.2.2, "Pool Header "
- Section 7.2.3, "Pool Reallocation "
- Section 7.2.4, "Normal Debit and Credit Interest "
7.2.1 Maintaining IC Rules
The components required to calculate interest (the principal, period, and rate) are broadly referred to as ‘Data Elements’. Data elements are of two types:
- System Data Elements (SDEs)
- User Data Elements (UDEs)
In addition to specifying how the SDEs and UDEs are connected through the formulae, you also define certain other attributes for a rule using the ‘Interest and Charges Rule Maintenance’ screen. You can invoke this screen by typing ‘ICDRLMNT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
For details about the screen, refer the chapter ‘Maintaining Interest Rules’ in the Interest and Charges User Manual.
You can maintain rules for the following:
- Pool Header
- Pool Reallocation
- Normal Debit and Credit Interest
7.2.2 Pool Header
Specify the following details:
On Account Opening Month
Check this box.
On Account Closure Month
Check this box.
SDE
Maintain the following SDEs:
- DAYS
- ILVD_ULT_CR_BAL
- ILVD_ULT_DR_BAL
UDE
Maintain the following UDEs:
- HDR_RATE
- HCR_RATE
- HTAX_RATE
Type
For each of the UDEs, select the option ‘Rate’ from the adjoining drop-down list.
Get Latest
For each of the UDEs, select the option ‘Use Effective’ from the adjoining drop-down list.
Click ‘Formulas’ button and invoke the ‘Formulas’ screen.
You need to maintain two booked and two tax formulae.
Formula 1
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Periodicity
Choose ‘Daily’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘365’ from the adjoining drop-down list.
Accrual Required
Check this box.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen.
Specify the following expressions:
| Case | Result | ||
|---|---|---|---|
| ILVD_UTL_DR_BAL>0 | ( ILVD_ULT_DR_BAL * DR_RATE * DAYS )/36500 |
Formula 2
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Periodicity
Choose ‘Daily’ from the adjoining drop-down list.
Debit/Credit
Select ‘Credit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘365’ from the adjoining drop-down list.
Accrual Required
Check this box.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expressions:
| Case | Result | ||
|---|---|---|---|
| ILVD_UTL_CR_BAL>0 | ( ILVD_ULT_CR_BAL * CR_RATE * DAYS )/36500 |
Formula 3
Specify the following details:
Book Flag
Select ‘Tax’ from the adjoining drop-down list.
Periodicity
Choose ‘Periodic’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘Actuals’ from the adjoining drop-down list.
Rounding Required
Check this box.
Tax Category
Select ‘TAXAPPLIC’ from the adjoining drop-down list.
Basis Percent
Specify ‘100’ as the basis percent.
Local Currency Basis
Check this box.
Tax Payable Currency Flag
Specify ‘Local Currency’ here.
Basis Amount Option
Select ‘Currency Default’ from the adjoining drop-down list.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expressions:
| Case | Result | ||
|---|---|---|---|
| FORMULA1>0 | ROUND(FORMULA1*HTAX_RATE/100,2) |
Formula 4
Specify the following details:
Book Flag
Select ‘Tax’ from the adjoining drop-down list.
Periodicity
Choose ‘Periodic’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘365’ from the adjoining drop-down list.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expressions:
| Case | Result | ||
|---|---|---|---|
| FORMULA2>0 | ROUND(FORMULA2* HTAX_RATE / 100,2) |
7.2.3 Pool Reallocation
Specify the following details:
On Account Opening Month
Check this box.
On Account Closure Month
Check this box.
SDE
Maintain the following SDEs:
- DAYS
- ILVD_CP_CR_CONT
- ILVD_CP_DR_CONT
- ILVD_NCP_CR_CONT
- ILVD_NCP_DR_CONT
UDE
Maintain the following UDEs:
- CDR_RATE
- CCR_RATE
- CTAX_RATE
Type
For each of the UDEs, select the option ‘Rate’ from the adjoining drop-down list.
Get Latest
For each of the UDEs, select the option ‘Use Effective’ from the adjoining drop-down list.
Click ‘Formulas’ button and invoke the ‘Formulas’ screen. You need to maintain two booked and one tax formulae.
Formula 1
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Periodicity
Choose ‘Daily’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘365’ from the adjoining drop-down list.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. You need to maintain three booked and three non-booked formulae.
Formula 1
Specify the following expression:
| Case | Result | ||
|---|---|---|---|
| ( ILVD_CP_DR_CONT + ILVD_NCP_DR_CONT ) > 0 | (( ILVD_CP_DR_CONT + ILVD_NCP_DR_CONT ) * CDR_RATE * DAYS ) / 36500 |
Formula 2
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Periodicity
Choose ‘Daily’ from the adjoining drop-down list.
Debit/Credit
Select ‘Credit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘365’ from the adjoining drop-down list.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expressions:
| Case | Result | ||
|---|---|---|---|
| ( ILVD_CP_CR_CONT + ILVD_NCP_CR_CONT ) > 0 | (( ILVD_CP_CR_CONT + ILVD_NCP_CR_CONT ) * CCR_RATE * DAYS ) / 36500 |
Formula 3
Specify the following details:
Book Flag
Select ‘Tax’ from the adjoining drop-down list.
Periodicity
Choose ‘Periodic’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘365’ from the adjoining drop-down list.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expressions:
| Case | Result | ||
|---|---|---|---|
| FORMULA2>0 | ROUND(FORMULA2* CTAX_RATE / 100,2) |
7.2.4 Normal Debit and Credit Interest
Specify the following details:
On Account Opening Month
Check this box.
On Account Closure Month
Check this box.
SDE
Maintain the following SDEs:
- DAYS
- VD_DLY_CR_BAL_M
- YEAR
UDE
Maintain the following UDEs:
- NORMAL_RATE1
- NORMAL_RATE2
- AMOUNT1
- TAX1
Type
For each of the UDEs, select the option ‘Rate’ from the adjoining drop-down list.
Get Latest
For each of the UDEs, select the option ‘Use Effective’ from the adjoining drop-down list.
Click ‘Formulas’ button and invoke the ‘Formulas’ screen. You need to maintain two booked formulae.
Formula 1
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Periodicity
Choose ‘Daily’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘Actuals’ from the adjoining drop-down list.
Accrual Required
Check this box.
Interest Method Default from Currency Definition
Check this box.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen.
Specify the following expressions:
| Case | Result | ||
|---|---|---|---|
| DLY_NET_BAL_M < 0 | (DLY_NET_BAL_M*DR_RATE*DAYS)/(365*100) |
Formula 2
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Periodicity
Choose ‘Daily’ from the adjoining drop-down list.
Debit/Credit
Select ‘Credit’ from the adjoining drop-down list.
Days in a Month
Select ‘Actuals’ from the adjoining drop-down list.
Days in a Year
Select ‘Actuals’ from the adjoining drop-down list.
Accrual Required
Check this box.
Interest Method Default from Currency Definition
Check this box.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expressions:
| Case | Result | ||
|---|---|---|---|
| DLY_NET_BAL_M > 0 | (DLY_NET_BAL_M*CR_RATE*DAYS)/(365*100) |
7.3 UDE Value Maintenance
This section contains the following topics:
- Section 7.3.1, "Interest on Term Deposit Payable Quarterly"
- Section 7.3.2, "Interest on term deposit payable monthly "
- Section 7.3.3, "Interest on deposits for NRI customers "
- Section 7.3.4, "Recurring deposit interest product "
You can maintain UDE values for the rules using the ‘Interest & 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.
For details about the screen, refer the chapter ‘Giving UDE Values for Condition’ in the Interest and Charges User Manual.
In this screen, you need to maintain the following UDEs for the different IC products. Assume that you have maintained the following IC products:
- Interest on term deposit payable quarterly
- Interest on term deposit payable monthly
- Interest on deposits for NRI customers
- Recurring deposit interest product
7.3.1 Interest on Term Deposit Payable Quarterly
You need to maintain values for the following UDEs under this product:
- TD_RATE1
- TD_RATE2
- TD_RATE3
- TD_RATE4
- CA_IN1
- CA_IN2
- CA_IN3
- CA_IN4
- TAX_RATE
7.3.2 Interest on term deposit payable monthly
You need to maintain values for the following UDEs under this product:
- TD_RATE
- PENALTY_RATE
- TAX_RATE
7.3.3 Interest on deposits for NRI customers
You need to maintain values for the following UDEs under this product:
- TD_RATE1
- TD_RATE2
- TD_RATE3
- TD_RATE4
- CA_IN1
- CA_IN2
- CA_IN3
- CA_IN4
- TAX_RATE
7.3.4 Recurring deposit interest product
You need to maintain values for the following UDEs under this product:
- TD_RATE1
- TD_RATE2
- TD_RATE3
- TD_RATE4
- PREPAYMENT_RATE
- OVERDUE_AMOUNT
- TAX_RATE
7.4 IC Rates Maintenance
You can maintain rate codes for branches using the ‘‘Interest & Charges Branch Availability Maintenance’ screen. You can invoke this screen by typing ‘ICDRESTR’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
You need to maintain the following rate codes for all branches of your bank:
- PERIODIC_1
- PERIODIC_2
- PERIODIC_3
- PERIODIC_4
- PENALTY_1
- PENALTY_2
- PENALTY_3
- PENALTY_4
- TAX_RATE
- PREPAY_RATE
- PERIODIC_1
- PERIODIC_2
- PERIODIC_3
- PERIODIC_4
- PENALTY_1
- PENALTY_2
- PENALTY_3
- PENALTY_4
- TAX_RATE
- PREPAY_RATE
For the aforesaid rate codes, you need to maintain rates and effective dates in the ‘Interest and Charges Rate Input’ screen. You can 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.
These rates are picked up by the TD module while processing interest applicable on a TD account.
Refer the chapter ‘Floating Rate Codes for IC Module’ for details about rate maintenance