4. Defining Attributes for Islamic Securitization Products
In this chapter, we shall discuss the attributes for a Securitization Product.
4.1 Securitization Products
This section contains the following topics:
- Section 4.1.1, "Maintaining Securitization Products"
- Section 4.1.2, "Mapping Accounting Role to a GL/Customer Account"
- Section 4.1.3, "Maintaining Events Details"
- Section 4.1.4, "Maintaining Branch and Currency Restriction"
- Section 4.1.5, "Maintaining Customer Restriction"
- Section 4.1.6, "Maintaining Preferences"
- Section 4.1.7, "Specifying Charge Details"
- Section 4.1.8, "Capturing MIS Details "
- Section 4.1.9, "Specifying User Defined Fields "
- Section 4.1.10, "Accounting Roles and Amount Tags for Securitization"
4.1.1 Maintaining Securitization Products
You can maintain the securitization product details in the ‘Islamic Securitization Product Maintenance’ screen. You can invoke this screen by typing ‘IZDPRMNT’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.
Here you can capture the following details:
Product Code
Specify the product code of the product.
Product Description
Specify a short description about the product,
Product Type
Specify the type of the product.
Slogan
Specify the slogan of the product.
Product Group
Specify the product group.
Start Date
Specify the product available start date.
End Date
Specify the product available end date.
Remarks
Specify short note about the product.
4.1.2 Mapping Accounting Role to a GL/Customer Account
You are allowed to map Accounting Role to a GL or a customer account. The system defaults the GL configured in this screen in the ‘Islamic Securitization Contract Online’ screen. Click on ‘Accounting Roles’ button to capture the details to map the accounting role to a GL or a customer account.
For further information on this screen refer chapter the ‘Product Definition’ under ‘Modularity’ User Manual.
4.1.3 Maintaining Events Details
You are allowed to define or specify the pre-defined events in securitization product based on the nature of securitization. You should click on the ‘Events’ button to capture the details of the event. In the ‘Events’ screen, you can attach the applicable events to the product.
For further information on Events, Accounting Entries, and Advices, refer ‘Product Definition’ User Manual under ‘Modularity’ User Manual.
4.1.4 Maintaining Branch and Currency Restriction
Click ‘Branch & Currency’ button and invoke the ‘Branch/Currency Restriction’ screen. In this screen you have the option of allowing all the branches of your bank to use the product or restricting its use to only some branches.
By default when a new product is created no branches will be disallowed.
For further information on this screen refer chapter the ‘Product Definition’ under ‘Modularity’ User Manual.
4.1.5 Maintaining Customer Restriction
Click ‘Customer’ button to invoke the ‘Customer Restrictions’ screen. In this screen you can specify the categories of customers or the customers themselves with whom you can enter into securitization involving the product.
For further information on this screen refer chapter the ‘Product Definition’ under ‘Modularity’ User Manual.
4.1.6 Maintaining Preferences
You need to maintain the common attributes which are used to define the Securitization product in the Preference section.
Here you need to capture the following details:
Preferences
You can set the preference details here.
Product Code
The system defaults the product code.
Description
The system defaults the product description.
Rate
You can set the rate details here.
Rate Type
Select the code that should be used for the product from the option list provided. The ‘Rate’ and ‘Rate Type’ are used in combination to determine the actual rate applicable for currency conversion.
The default value for Rate Code is ‘STANDARD’. This means that, if you choose ‘Mid Rate’, the mid rate maintained for the STANDARD code is used for the finances created under the product.
Rate
Indicate the exchange rate applicable for the product you are maintaining. The available options are:
- Mid Rate
- Buy/Sell Rate
By default, the Buy/Sell Rate is used.
Liquidation
You can specify the liquidation details here.
Liquidation Mode
Indicate the mode of liquidation. The options available are:
- Auto
- Manual
Tenor
You can set the tenor details here.
Minimum Tenor
Specify the minimum tenor of a product. The tenor of the finance account that involves the product should be greater than or equal to the Minimum tenor that you specify.
Maximum Tenor
Specify the maximum tenor for a product. The tenor of the finance accounts that involve the product should be less than or equal to the Maximum tenor that you specify.
Default
The ‘default tenor’ is the tenor that is associated with a finance account involving this product. The value captured here should be greater than the minimum tenor and less than the maximum tenor. You can change the default tenor applied on a finance account during finance processing. However, the new tenor should be within the minimum and maximum tenors maintained for the product.
Unit
Select the tenor details for a product from the drop down list. The options available are:
- Days
- Months
- Year
Others
You can set the buy back of pool details here.
Buyback of Pool Allowed
Check this option to allow the bank to buy back the sold accounts.
Periodic Charges
You can specify the periodic charges here.
Frequency
Select the frequency of the periodic charges to be applied from the drop down list. The options available are:
- Monthly
- Quarterly
- Half yearly
- Yearly
Start Reference
Select the periodic charge starting day from the drop down list. The options available are:
- Value Date
- Calander Date
Month
Select the starting month of the periodic service charge.
Note
It is applicable only when start reference is calendar date.
Day
Specify the starting day from which charges should be levied.
Note
It is applicable only when start reference as calendar date.
Charge Amount
Specify the amount to be charged for the service during the period.
Currency
Specify the service charge currency.
Profit/Loss Accrual
You can set the accrual details here.
Here
Accrual Required
Check this box to indicate that the component has to be accrued and provisioning is applicable.
Frequency
If you have opted for accrual and provisioning for the components, you have to specify the frequency for the same. The frequency can be one of the following:
- Daily
- Monthly
- Quarterly
- Half yearly
- Yearly
Start Reference
Select the starting date for the Profit/Loss accrual. If it is Value Date, system will take the value date as starting date and compute the schedule. Incase if the starting date is Calendar Date, system will compute the start date based on Month and Date specified.
Month
Specify the month in which the first accrual has to begin, if you set the accrual/provisioning frequency as quarterly, half yearly or yearly.
Day
Specify the day on which the accrual/provisioning has to be done.
Rekey Requirements
If you wish to ensure re-keying of values in certain fields of the contract during contract authorization, you can indicate it here. You can also select the fields for which you wish re-keying to be done. Specify the following details:
Rekey Required
Indicate whether to avail the re-key facility or not during contact authorization for contracts created using this product. The options available are:
- Yes
- No
Amount
Check this box to re-key the amount during contract authorization.
Currency
Check this box to re-key the currency during contract authorization.
Value Date
Check this box to re-key the start date during contract authorization.
Maturity Date
Check this box to re-key the end date during contract authorization.
4.1.7 Specifying Charge Details
Click on ‘Charges’ button to specify the charge details.
For further information on this screen refer chapter the ‘Product Definition’ under ‘Modularity’ User Manual.
4.1.8 Capturing MIS Details
You can retrieve MIS related information for a product by linking it to a Warehouse Code. Linking a product to a warehouse code ensures that all contracts processed under the product are automatically tracked under the specified Warehouse Code.
Click ‘MIS’ button to define the MIS details for the product you are creating.
For further information on this screen refer chapter the ‘Product Definition’ under ‘Modularity’ User Manual.
4.1.9 Specifying User Defined Fields
You need to click on ‘Fields’ button to link the user-defined fields to the product that you are defining..
For further information on this screen refer chapter the Product Definition’ under ‘Modularity’ User Manual.
4.1.10 Accounting Roles and Amount Tags for Securitization
The following are the Accounting Roles and Amount Tags for Securitization:
| Accounting Role | Description | ||
|---|---|---|---|
| SPV_SETTL_ACC | Accounting role for SPV settlement account. All credit/debit transaction for SPV is handled through the specified settlement account | ||
| SPV_SETTL_BRIDGE_CR | Bank GL account for SPV Credit Settlement bridge | ||
| SPV_SETTL_BRIDGE_DR | Bank GL account for SPV Debit Settlement bridge |
Note
- A finance account can be part of only one securitization pool.
- Post securitization, Profit/penal profit accrual continues.
- Post securitization, the system does not allow readjustment/backdated amendments for finances participating in the securitization pool. It is handled operationally.
- The system does not transfer schedule payments paid in advance and realized before securitization to SPV during securitization.
- Post sale of securitization, the system disables amendments to securitizations. Also, combining changes into a single amendment is not enabled.
- Post securitization, the system triggers Islamic events and posts the accounting entries according to the product configurations.
- If the status of Islamic asset is ‘Marked for securitization’, then the system restricts performing account specific operations like amendment, disbursement or payments, on the same day until the securitization process is completed as part of intra-day batch and also raises the error message as, “Islamic asset is under batch securitization.”