3. Term Deposit Maintenance

3.1 Introduction

This chapter contains the following sections:

3.2 Pay-in Parameters

This section contains the following topics:

3.2.1 Maintaining Pay-in Parameters

In case you have specified that the TD Pay-in be done by GL, you need to maintain the GL details through the ‘Term Deposit Payin Parameters Maintenance’ screen. You can also invoke this screen by typing ‘STDTDPAY in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

To link appropriate GLs in case the pay in option chosen is pay in by GL, you need to maintain the following details:

Branch Code

Specify the branch code for which you want to maintain payin parameters. The adjoining option list displays all valid branch codes maintained in the system. You can select the appropriate one.

Pay-in Option

Select the pay-in option from the adjoining drop down list. The options available are:

General Ledger Code

Specify the GL code that should be picked up the system for the TD pay in. The adjoining option list displays all valid GLs maintained in the system. You can select the appropriate one.

3.2.2 Specifying UDF Values

All User Defined Fields (UDFs) linked to the function ID ‘STDTDPAY’ are displayed in the ‘User Defined Fields’ screen. Invoke this screen by clicking ‘Fields’ button on the ‘Term Deposits Payin Parameters Maintenance’ screen.

Here you can specify values for each UDF.

Refer the User Manual titled ‘User Defined Field’ for details about defining UDFs.

3.2.3 Validations for Pay-in Accounts

System performs the following validations on pay-in accounts during TD account ‘Save’ stage (accounting entry passing stage):

3.2.4 Viewing Pay-in Parameters Summary

You can view summary of all payin parameters using the ‘Term Deposit Payin Parameters Summary’ screen. To invoke this screen, type ‘STSTDPAY’ in the field at the top right corner of the Application tool bar and click the adjoining arrow button.

You can query on records based on any one or all of the following criteria:

Click ‘Search’ button. The system identifies all records satisfying the specified criteria and displays the following details for each one of them:

Double click on a record to invoke the detailed screen for that record.

3.3 Closing Mode

This section contains the following topics:

3.3.1 Maintaining Closing Mode

When you close an account the system checks whether any Interest/Charge (IC) products linked to the account are pending liquidation. If the account does not have any IC products pending liquidation the system will display list of ‘Close Out’ modes to facilitate account closure. You can maintain the closing modes using ‘Term Deposit Closing Mode Maintenance’ screen. To invoke this screen, type ‘STDCLOSE’ in the field at the top right corner of the Application tool bar and click the adjoining arrow button.

Specify the following details:

Closing Mode

You need to maintain the following modes:

Note

Description

Give a brief description for the closing mode.

Product

Specify the Retail Teller product that should be used for booking withdrawal entries. It can be any one of the following:

Debit Credit

The closure can be effected by means of a debit or a credit to the account. For each of the aforesaid closing modes, you need to select the ‘Debit’ option from the adjoining drop-down list..

3.3.2 Specifying UDF Values

All User Defined Fields (UDFs) linked to the function ID ‘STDCLOSE’ are displayed in the ‘User Defined Fields’ screen. Invoke this screen by clicking ‘Fields’ button on the ‘Term Deposit Closing Mode Maintenance’ screen.

Here you can specify values for each UDF.

Refer the User Manual titled ‘User Defined Field’ for details about defining UDFs.

3.3.3 Viewing Closing Modes Summary

You can view summary of all closing modes using the ‘Term Deposit Closing Mode Maintenance’ screen. To invoke this screen, type ‘STSCLOSE’ in the field at the top right corner of the Application tool bar and click the adjoining arrow button.

You can query on records based on any one or all of the following criteria:

Click ‘Search’ button. The system identifies all records satisfying the specified criteria and displays the following details for each one of them:

Double click on a record to invoke the detailed screen for that record.

3.4 Account Class for TD

This section contains the following topics:

3.4.1 Maintaining Account Class for TD

To handle term deposits in Oracle FLEXCUBE, you have to set up an account class of type ‘Deposit’, in the ‘Account Class Maintenance’ screen. To invoke this screen, type ‘STDACCLS’ in the field at the top right corner of the Application tool bar and click the adjoining arrow button.

Specify the following details:

Account Class and Description

Identify the account class you are setting up with a unique code and a brief description.

Account Type

Select the ‘Deposit’ from the drop-down list.

Start Date

Specify the date from which the account class should become active, using the adjoining calendar. You will be able to create deposit accounts under this account class only from this date.

End Date

You can also specify the life span of the account class by indicating the end date.

The end date for an account class refers to the termination date after which, creation of new account under the account class is disallowed.

Consequently, the option list for Account Class in all further transactions screen in Oracle FLEXCUBE, will not display the ‘expired’ account class as of the system date. However, the existing accounts for the account class will be active even after the end date.

Note

If you do not specify an End Date for the account class, the account is taken to be an open-ended account class.

3.4.2 Account Details Tab

This tab is displayed by default on invoking the ‘Account Class Maintenance’ screen.

Account Code

As per your bank’s requirement you can choose to classify account classes into different account codes. The bank can decide the manner in which the account classes are to be assigned to different account codes. An account code can consist of a maximum of four characters. Depending on the customer account mask maintained, the value in the account code field would be used during the generation of customer account numbers through the ‘Customer Accounts Maintenance’ screen.

If you have decided to include account code as part of the customer account number (in the account number mask), then at the time of creating a new customer account number, you will need to select the account class for the account number being generated. In the option-list provided, the account class is displayed along with the associated account code. When the account number gets populated, it is the account code that forms a part of the customer account number.

Dual Currency Deposit

Check this box to indicate that account class is for creating dual currency deposits. You can check this box only if the account type is ‘Deposit’.

Natural GL

The reporting of all turnovers of the particular account class will be directed to the GL that you identify as the natural GL. Based on the characteristic of the account balance; you can specify whether the turnover is to be posted to the Debit GL or to the Credit GL. Deposit accounts normally have a credit balance.

Applicable Customer Status

Select the applicable customer status to indicate whether deposit product is available to minors or not. You can choose one of the following values from the adjoining drop-down list:

Note

3.4.3 Maintaining Deposit Details

Click the ‘Deposits’ button to define the parameters for a deposit type account class. The ‘Deposit Account Details’ screen is displayed.

On the maturity date of a deposit, you can opt to:

The values given here will be defaulted when the TD is opened. You can modify defaulted values for each TD.

Auto Rollover

You can opt to automatically rollover a deposit if it is not liquidated on its maturity date. Check this box to automatically rollover deposits opened under the account class. TDs that are open and marked for Auto Rollover will automatically be rolled over during the Beginning of Day operations on the Maturity date. You can define the terms and conditions for the new deposit while maintaining the deposit account.

Close on Maturity

Deposit accounts opened under an account class can be closed automatically on the Maturity Date of the deposit. You can specify this for the account class you are maintaining by checking this box.

If you check this box, then during the Beginning of Day operations on the Maturity Date, the account will be closed. The principal will be moved, if specified, to the account your customer has directed. In case you don’t check this box and the deposit remains unclaimed, you can opt to move the principal and interest to the respective ‘Unclaimed GLs’ maintained at your bank.

Note

If you check the ‘Auto Rollover’ box, you will not be able to check ‘Close on Maturity’ box. Your specifications here will default to all deposit accounts opened under the account class. However, when maintaining a deposit account, you can change the specifications that default.

You have to check this box mandatorily, if you had checked the box ‘Recurring Deposit’ in the ‘Deposit Account Details’ screen.

Allow Partial Liquidation

Check this box to indicate that partial redemption is allowed. If ‘Allow partial Liquidation’ is not checked, then partial redemption will not be allowed on term deposits under this account class.

Refer the section ‘Maintaining Floating Interest Rates’ in this Manual for details about maintenance required for partial liquidation of TD.

Allow Partial Liquidation with Amount Block

Check this box to indicate that partial liquidation is allowed for the deposits with amount blocks. If the TDis linked partially then partial liquidation of the TD will be allowed only if you check this box.

Tenor Modification

Check this box if you intend to avail a tenor modification facility for a Term Deposit Account,

Move Interest to Unclaimed

Check this field to move the interest amount to the unclaimed GL mapped at the IC product in the accounting role ‘INT_UNCLAIMED’ on maturity date or grace period end date of the term deposit account.

Move Principal to Unclaimed

Check this field to move the principal amount to the unclaimed GL mapped at the IC product in the accounting role ‘PRN_UNCLAIMED’ on maturity date or grace period end date of the term deposit account.

Note

Rate Chart Allowed

Check this box to indicate that the system should calculate TD interest based on the LDMM float rate maintained in the ‘LD MM Floating Rate input’ screen (‘CFDFLTRI’), If you check this box, the system will pick interest rates based on different tenors, amount slab, currency and effective date for a TD. The rate is picked up at the time of booking. The rate is further picked up only at the time of liquidation/ rollover/ redemption operations based on re-population flag at IC product level.

You will not be able to modify this preference once the record is authorised.

Re-pick up Account Class Tenor On Rollover

Check this box to enable re-pick up of the account class tenor on rollover. If you check this box, the system will default the rollover tenor as 'Account Class Tenor'. During rollover, the system will pick up the default account class tenor.

Denominated Deposit

Check this box to allow opening of denominated deposits. This box is automatically selected during save, if the Denomination details are maintained for the account class at the ‘Denominated Deposit Details’ Tab.

Interest Rate Based on Cumulative Amount

Check this box to indicate that the system should arrive at the interest rate of a new deposit using the cumulative amount of other active deposits, under the same account class, customer, and currency.

The cumulation of the amount for arriving at the interest rate is done at the account level during the save of the below events:

Note

Refer the section ‘Calculating Interest Rate Based on Base Amount’ in this User Manual for details about arriving at interest rate based on cumulative amount.

Month-end Maturity Deposit

Check this box to indicate that the deposit is a month-end maturing deposit, i.e., the deposit matures on the last working day of the month.

If this box is checked at the account class, then during deposit input, if the account opening date is the last working day of the month and the maturity date is the last day of the subsequent month, then you have to enter the tenor in Months only. If this box is un-checked, then the deposit is not considered as an month-end maturing deposit even though the deposit is opened on the last working day of the month and the tenor of the deposit is across months.

During TD opening, a deposit is considered as a month-end maturing deposit only if the following criteria are met:

An account class with ‘Month-end Maturity Deposit’ box checked can also have deposits that are not month-end maturing deposits. A deposit is classified as an ordinary deposits (not month-end maturing deposit) if the following criteria are met:

Note

Grace Period for Renewal

Specify the grace period for renewing a TD. Only if grace days are provided, the TD can be renewed using the ‘Term Deposit Redemption’ screen (ICDREDMN) or ‘Renewal Simulation’ screen (ICDREDRN) upon maturity of the TD. This option is applicable only for deposits whose interest and principal is moved to unclaimed GLs upon maturity. If you check the ‘Auto Rollover’ box or the ‘Close on Maturity’ box, the system will ignore the value that you specify here. In other words, grace period will not be applicable on the maturity date in case of auto rollover or closure of the account.

After the account has matured, renewal of the TD is possible from the beginning of day (BOD) of the maturity date to the end of day (EOD) of the grace period. The TD gets renewed with the value date as of the maturity date when the grace period is valid.

The counter for the grace period is ‘0’ on the maturity date. It is incremented by 1 during EOD processing of every subsequent day. When the grace period counter is ‘0’, TD renewal is possible before start of the EOD as of the maturity date. When the grace period counter goes to ‘1’, TD renewal is possible before start of the EOD of the (maturity date +1),and so on.

Refer the section ‘Redeeming a TD’ and ‘Transferring to Unclaimed Deposit on Maturity’ in this User Manual for details about TD redemption and application of grace period respectively.

Grace period is maintained only at the account class level. You cannot modify it at account level.

Maturity Notice Period

Specify the number of days before which the notification is to be sent for TD maturity. If ‘N’ days is mentioned, then the notification will be sent ‘N’ working days prior to the TD maturity date. The default value is zero.

Settlement Bridge GL

To facilitate multi mode pay-out, you need to maintain a Bridge GL between the TD and the pay-out module (PC). Specify the Bridge GL that should be used for processing pay-out of TDs under this account class. The adjoining option list displays all valid GLs maintained in the system. You can select the appropriate one.

Product Category

To facilitate multi mode pay-out, specify a product category or select a product category from the adjoining option list. The option list, lists out only the outgoing payment product category as the payout is to move the proceedings of TD upon liquidation or maturity to other bank accounts.

Transaction Code

Specify the transaction code that should be used to process TD pay-out by PC. The adjoining option list displays all valid transaction codes maintained in the system. You can select the appropriate one.

Cluster Identification

Specify a valid cluster ID which you need to link to deposit account class. On linking the cluster, the booking and withdrawal amount is validated against cluster amount in units.

Note

You can link cluster ID only for term deposits.

Rate Chart Tenor

Specify the unit by which the tenor maintained in ‘Floating Rate Code Definition’ screen should be considered. You can select one of the following units:

If rate chart is allowed for the account class, then the system will take the tenor from ‘Floating Rate Code Definition’ in terms of the unit specified here.

Note

You can use this feature only if the rate code has been maintained for the specific tenor. Also, this feature is available only if the check-box ‘Rate Chart Allowed’ is checked on this screen.

Deposit Amount Currency wise Limits

Currency

Specify the Ccy for which the min / max / top-up units to be defined. The list displays all the active Ccy's maintained.

Min amount

Specify the minimum amount for which deposit should be created under this account class. If the TD account is booked below the minimum amount then the system displays an error message: "Deposit amount is less than the minimum amount at account class"

Max amount

Specify the maximum amount for which deposit can be created under this account class.The system will display a configurable override if the deposit amount contravenes the specified amount range or if the maximum amount is not specified.

Top-up Units

Specify the top-up units for each ccy. The top-up has to be made only in multiples of these units specified for each Ccy. if not, an error message "Top-up should be in multiples of top-up units" will be displayed on top-up.

Holiday Treatment

Holiday Calendar

Select the holiday calendar applicable to the account class from the adjoining drop-down list. This list displays the following values:

The holiday calendar is used to arrive at the maturity date. The holiday calendar defined at the account class is applicable to all term deposits under the account class. You cannot modify the ‘Holiday Calendar’ if there are active accounts under the account class.

For month-end deposits, if holiday calendar is applicable, then the account class holiday calendar options indicate the following:

Holiday Movement

Select the working day to which the holiday should be moved from the adjoining drop-down list. This list displays the following values:

Holiday movement is adjusting the next maturity date when the maturity date falls on a holiday, based on the Holiday Calendar chosen. 'Holiday Movement' is not applicable if you select 'Ignore' option for 'Holiday Calendar'.

Note

You cannot modify the 'Holiday Movement' if there are active account under the account class.

Maturity Date Movement Across Months

Select the maturity date movement across months from the adjoining drop-down list:

Maturity date across months is applicable only when the maturity date is adjusted to previous or next working day.

System displays an override message in the following cases:

Whenever there is a change in the maturity date, system changes the rollover maturity date accordingly.

System ignores the value of 'Maturity date movement across months' if you select the 'No Change' option for 'Holiday Movement'.

Adhoc Holiday Change

Select the adhoc holiday change from the adjoining drop-down list. The adjoining drop-down list displays the following values:

The adhoc holiday change is the change in branch and currency holiday calendar after opening the TD due to adhoc change in holiday or branch transfer of the deposit. System ignores the value of ‘Adhoc Holiday Change’ if you select the ‘Ignore’ option for ‘Holiday Calendar’.

Applicable Deposit Tenor

Select the deposit tenor, applicable to the deposit for interest rate pick-up, from the adjoining drop-down list. This list displays the following values:

Note

Default Tenor

You can define a tenor for the deposits that are opened under an account class. Deposits opened under the account class will automatically acquire this tenor. However, you can change the tenor to suit the requirements of a specific deposit. The default tenor should be within the minimum and maximum range specified.

Days

Specify the default tenor in terms of days.

Months

Specify the default tenor in terms of months.

Years

Specify the default tenor in terms of years.

Maximum Tenor

Specify the maximum tenor for which deposits can be created under this account class. If the term deposit is booked beyond the maximum tenor then the account fails to save and the system displays following error message:

Tenor of deposit is greater than the maximum tenor of the deposit

Days

Specify the maximum tenor in terms of days.

Months

Specify the maximum tenor in terms of months.

Years

Specify the maximum tenor in terms of years.

Minimum Tenor

Specify the minimum tenor for which deposits should be created under this account class. If the term deposit is booked before the minimum tenor then the account fails to save and the system displays following error message:

Tenor of deposit is lesser than the minimum tenor of the deposit.

Days

Specify the minimum tenor in terms of days.

Months

Specify the minimum tenor in terms of months.

Years

Specify the minimum tenor in terms of years.

Premature Redemption Parameters for Rate Chart Allowed Deposits

Interest Rate for Redemption Amount

Select the interest rate to be applied for the redemption amount, from the adjoining drop-down list. The following options are available in the drop-down list for selection:

Note

Special Rate Code

Specify the special rate code for the redemption amount. Alternatively, you can also select the rate code from the adjoining option list. This is a mandatory input only if the interest rate is chosen as ‘Special Rate Code’.

Interest Rate After Redemption

Select the interest rate to be applied after redemption of TD, from the drop-down list. The following options are available for selection:

Note

Top-up of Deposit

You can top-up an existing Term Deposit by adding funds to the TD account.You can allow or disallow top-up and also define the top-up block duration after opening date and top-up block duration before maturity date. The block duration are considered as calendar days based on the account branch holidays.

Allow top-up of Deposit

Check this box to indicate that you can top-up funds to an existing term deposit. By default this box is not checked.

Block Duration after Opening Date

You can specify the duration for which the term deposit top up has to be blocked after the account opening date. The block duration after Opening date (Days / Months) should not be greater than the max tenor at the account class.

Months

Specify the number of months for which the term deposit top-up has to be blocked after the account opening date.

Days

Specify the number of days for which the term deposit top-up has to be blocked after the account opening date.

Block Duration Before Maturity Date

You can specify the duration for which the term deposit top-up has to be blocked before the account maturity date. The top-up can be done any time before the maturity date (i.e. in term) of the deposit if there is no block duration defined. The block duration before maturity date (Days / Months) should not be greater than the max tenor at the account class.

Months

Specify the number of months for which the term deposit top-up has to be blocked before the account maturity date.

Days

Specify the number of months for which the term deposit top-up has to be blocked before the account maturity date.

Note

The sum of block duration after opening date and block duration before maturity date should not be greater than the max tenor at account class. If not, system displays the error message "Block duration cannot be greater than maximum tenor allowed".

Interest Rate

Select the interest to be applied on the top-up deposit, from the adjoining drop-down list. The options available for selection are:

Note

If the option ‘Interest Rate Based on Cumulative Amount’ is checked then the interest rate will be based on the cumulative amount of all the deposits including this deposit amount, of the same customer under the same account class for the same currency.

Dual Currency Deposits

Dual Currency Deposit (DCD) is a short-term currency-linked deposit through which you earn a higher interest rate than regular term deposits. The Bank converts the deposit currency into the linked currency at the pre-determined conversion rate on the fixing date two working days prior to deposit maturity. At maturity you receive the principal and interest in either the deposit currency or the linked currency, whichever is weaker.

The following details are captured here;

Linked Currency

Specify the linked currency if the account class is to be used for creating TD with Dual Currency option. Alternatively, you can also choose the currency from the adjoining option list.

Note

You will be allowed to capture this value here only if the option ‘Dual CCY Deposit’ is checked at the ‘Account Class Maintenance’ screen. You will be allowed to modify this val­ue even after authorization.

Currency Option Product

Specify the currency option product under which an Options contract has to be created in case of a Dual Currency deposit. The adjoining option list displays all valid Options products with Product Type ‘CO’, with the following features.

On saving the account class, system validates the following to ensure that the currency option product selected here has the below features:

Fixing Days

Specify the number of days from TD maturity date, before which the exchange rate has to be fixed. On maturity, the exchange rate at the time of booking and the exchange rate at the time of fixing date are compared to determine the currency in which TD amount should be settled.

Note

You will be allowed to capture this value here only if the option ‘Dual CCY Deposit’ is checked at the ‘Account Class Maintenance’ screen. You will be allowed to modify this val­ue even after authorization.

Recurring Deposit

Specify the following details for recurring deposits.

Recurring Deposit

Check this box to indicate that the account class is specific to recurring deposit.

Move Maturity to Unclaimed

This box is unchecked and disabled for recurring deposits.

Move funds on Overdraft

Check this option to indicate that the system should pass an overdraft in the payment account (i.e. CASA) when the account does not have sufficient funds for making RD installment payment.

Installment Frequency

Specify the frequency for payment of installment for RD. The installment frequency should be within the minimum and maximum schedule days.

Days

Specify the installment frequency in terms of days.

Months

Specify the installment frequency in terms of months.

Years

Specify the installment frequency in terms of years.

Minimum Schedule Days

Specify minimum schedule days here.

Maximum Schedule Days

Specify maximum schedule days here.

Minimum Installment Amount

Specify the minimum RD installment here. The installment amount at account level should be greater than or equal to the minimum installment amount.

Pre-Closure Preferences

You can attach the pre-closure factor ID, which is used to calculate the penalty for pre-mature TD redemptions at account class level.

Pre-Closure Factor ID

Specify the pre-closure factor ID. Alternatively, you can select the factor ID from the option list. The list displays all factor IDs maintained in the ‘Pre-closure Factor Maintenance’ (STDPCMNT) screen.

Description

The system displays the description of the factor ID based on the Pre-closure factor ID selected.

Pre-closure Factor ID Based on

Select the effective date based on which the pre-closure factor needs to be considered, from the drop down list. The list displays the following values:

The System Data Element (SDE) ‘SDE PRE_CLS_FACT’ identifies the effective date based on the value maintained in the ‘Pre-closure Factor ID Based on’ field. If there no records available matching with the ‘Account Opening Date’ or the ‘Latest Effective Date’, then the SDE considers the value as 1.

3.4.4 Maintaining Denominated Deposit Details

You can maintain various denominations of the denominated certificates per currency using ‘Denominated Deposit Details’ screen. Only the denominations maintained in this screen can be used for issuance of denominated certificates under this account class.

To invoke this screen click the button ‘Denominated Deposits’ on the Account Class Maintenance’ screen.

The following details are captured here:

Currency

If inventory module is allowed, select a valid currency code for which the denomination ids are maintained in inventory module. If inventory module is not allowed then select any valid currency code maintained in the system.

Denomination ID

If inventory tracking is ‘YES”, then select the denomination id available at the inventory module. If inventory tracking is ‘NO’ then you can specify the required denomination id.

Denomination Description

Enter a description if inventory tracking is not available. If inventory tracking is done then the denomination description of the selected denomination id is defaulted here.

Denomination Value

Specify a denomination value if inventory tracking is not available. If inventory tracking is done then the denomination value of the selected denomination id is defaulted here. For further details about setting up an account class, refer the chapter ‘Maintaining Mandatory Information’ in the Core Entity User Manual.

3.5 Interest Preferences for TD

This section contains the following topics:

3.5.1 Setting Up Interest Preferences for TD

You need to set up an Interest/Charge product to handle the calculation of interest and charges on a TD. You can invoke the ‘Interest and 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.

Check 'Deposit' to create Deposit Interest product. The booking account type should be maintained as Interest for the deposit product. The accounting roles are generated for the product based on the interest rule maintained at ICDRUMNT.

3.5.2 Specifying Accounting Roles for Unclaimed Deposits

In case you have checked the option ‘Move Interest to Unclaimed’ and ‘Move Principal to Unclaimed’ in the Deposit Account Details’ screen at the account class level, you will have to specify appropriate accounting roles for the IC product using the ‘Accounting Roles’ screen. Click ‘Accounting Roles’ button on the ‘Interest and Charges Product Maintenance’ screen and invoke the following screen.

Specify the following details in case you have opted for moving interest and/or principal to unclaimed GL:

Accounting Role

Choose 'PRN_UNCLAIMED' ,'INT_UNCLAIMED' and 'MAT_UNCLAIMED' from the adjoining list.

Account Head

Attach 'INT_UNCLAIMED' to a miscellaneous GL for unclaimed interest - for eg '25691234'. Similarly, map 'PRN_UNCLAIMED' and 'MAT_UNCLAIMED' to a miscellaneous GL for unclaimed principal - for eg '25691235'.

3.5.3 Linking TD Account Class to Interest Product

You can link the TD Account Class to the Interest product in the ‘Interest and Charges–Interest Product Preferences’ screen. Click ‘Preferences’ button on the ‘Interest and Charges Product Maintenance’ screen and invoke the following screen.

Here you can specify preferences for profit calculation and application on the accounts to which this product is applied.

Account Details

You can indicate the TD accounts on which this product should be applied.

Account Class

Specify the account class of ‘Deposit’ type that you have maintained for creating TDs. The adjoining option list displays all valid account classes maintained in the system. You can select the appropriate one.

All TDs created under this account class will inherit the interest parameters as maintained in this screen.

You should not link the same account class to multiple IC products. One deposit account class should be linked only to one interest product.

Currency

Specify the currency here. You can book deposit accounts in the currency and account class combination specified at the IC product level.

The system defaults the interest product to account at the time of booking if the account class with the currency combination is linked to the IC product.

Special Condition

Check this box to calculate interest. If Special Condition is checked, then the product is defaulted while booking the deposit account.

Note

While saving the IC product with Deposits checked, special condition is mandatory

 

Rate Change on Interest Liquidation.

If the box 'Rate Chart Allowed' has been checked for the account class, then you should leave this box unchecked. If this box is checked, then on every interest liquidation new rates are picked up for interest calculation. However, you cannot modify this box once authorized.

Rate Change onRollover

Check this box to re pick up the rate activity on the rollover of TD. The rate is picked up for fixed and rate chart allowed term deposits.

Open

Check this box if the account class and product combination is effective and open for booking deposit accounts. To discontinue the mapping of an account class on an IC product, uncheck this box.

Refer the chapter ‘Defining Interest and Charge Products’ in the Interest and Charges User Manual for details about setting up the product.

Refer the chapters ‘Annexure A - Accounting Entries and Advices’ in this User Manual for details on the accounting entry set-up for the IC products. Also refer the chapter ‘Annexure B – IC Rule Set-up’ in this User Manual for details about setting up IC rules for the products.

3.5.4 Linking Main Interest Rate UDE

You can link the main interest rate UDE to the interest product in the 'Interest and Charges - Interest Product Preferences' screen. Click 'Preferences' button on the 'Interest and Charges Product Maintenance' screen to invoke the following screen.

The UDE specified here is used by the system to compute and display the maturity amount while booking redemption and simulation. You can specify one of the UDE here as multiple UDEs can be attached to an IC product.

3.5.5 Negative Interest for Term Deposits

Oracle FLEXCUBE allows you to capture negative interest rate for a term deposit. While positive interest rate is based on the credit formula, negative interest rate is based on the debit formula.

During early redemption interest formula goes through recalculation with either positive or negative interest rate. For credit formula, interest formula is maintained and for debit formula, interest, penalty and tax formula are maintained.

Interest component is calculated based on the sum of amount with credit formula minus sum of amount with debit formula that has Book Flag as Non Tax and Non Penalty. Penalty component is calculated based on Debit formula that has Book Flag value as Penalty.

You can waive penalty during partial redemption. The penalty amount is set to 0 when, Waive Penalty flag is enabled.

Interest Formula in Rule Maintenance:

Formula No.

Formula Type

Accrual Required

Periodicity

Condition

Result

1

Credit

Y

Daily

DEPOSIT_AMOUNT > 0 AND INT_RATE >= 0

((DEPOSIT_AMOUNT * DAYS * INT_RATE)/ (100 * YEAR))

2

Debit

Y

Daily

DEPOSIT_AMOUNT > 0 AND INT_RATE < 0

((DEPOSIT_AMOUNT * DAYS * ABS(INT_RATE)) / (100 * YEAR))

3

Debit

N

Periodic

(Formula1 – Formu­la2 ) >= 0

(Formula1 – For­mula2 ) * Tax­_Rate

Interest Liquidation and Interest Payout

 

If Interest booking account is CASA

 

If Interest booking account CASA does not have balance

If Interest booking account is TD

If Interest booking account TD does not have balance

Interest Liq­uidation

Interest will be debited from the CASA account

If CASA a/c does not have balance, and no track receiva­ble or overdraft is set, then liq­uidation fails with AC-OVD-02

Interest would be debited from the TD

Interest liquida­tion fails, if Interest Liqui­dated amount is greater than available bal­ance.

Rollover of Principal

Principal paid out = Principal.

Interest debited from CASA account

Interest Liqui­dation fails, once CASA has balance, it would be picked in next EOD.

For avoiding liq­uidation failure, Either CASA should have Track receiva­ble or overdraft.

Rollover amount = P-I.

Interest Payout component is not considered

 

If TD interest rate is nega­tive, TD cannot be attached as collateral.

But if Rate chart TD and interest rate is positive, then TD can be attached as col­lateral.

If there is any block on TD, the TD will be rolled over as

P + Interest (Effective Inter­est can be posi­tive or negative).

Rollover of Interest

Not possible

Not possible

On maturity,

Principal= (Principal - Interest) rollo­ver.

Principal Pay­out component is not consid­ered

Rollover of Principal +Interest

Not possible

Not possible

On maturity,

Principal= (Principal - Interest) rollo­ver

Rollover Special Amount

Rollover hap­pens till Princi­pal.

Any additional amount has to be paid using PAYIN details

Rollover hap­pens till Princi­pal.

Any additional amount has to be paid using PAYIN details

On TD book­ing, if Maturity Amount < Spe­cial Amount, then it asks for additional funds.

On Rollover if available bal­ance will become less than special amount, then at EOD, rollover fails.

Move Inter­est to Unclaimed

Move Princi­pal to Unclaimed

Not possible

Not possible

If Manual Rollo­ver is P-I , if rolled over.

If Move to Unclaimed, Amount = P- I moved.

 

Note

3.6 Floating Interest Rates

This section contains the following topics:

3.6.1 Maintaining Floating Interest Rates

You can apply interest either as a ‘Fixed’ rate or as a ‘Floating’ rate. A floating rate corresponds to the market rates for the day. These rates are maintained and updated daily (or whenever they change,) in the ‘Floating Rate Maintenance’ screen.

You can invoke this screen by typing ‘CFDFLTRI’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

The floating interest rates are defined through this screen. A Rate Code identifies a set of rates defined for a combination of Currency, Amount Slab and Effective Date. Also, for each such combination, you can maintain rates that can differ by each tenor.

The following details have to be captured here:

Rate Code and Description

You can maintain new rate codes and also provide values for existing ones (like MIBOR, LIBOR etc). For a new code, you need to capture a unique id. The id can include a maximum 10 alphanumeric characters.

Currency

You have to associate each Rate Code with a currency. You can define rates for the same Rate Code in different currencies. Select a currency from the option list provided.

Effective Date

Each rate that you define for a Rate Code and Currency combination should have an Effective Date associated with it. This 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.

Borrow/Lend Indicator

For every Amount Slab - Effective Date combination, you should define the rate to be applied as a borrow rate, a lend rate or a mid rate. Borrow rates are applied for loans taken by the bank and lend rates applied on loans disbursed.

Tenor and Interest Rates

The rates that will be applied for a given combination of Amount Slab – Effective date – Lend/Borrow Indicator can be tenor based. In this screen, you can also define interest rates for different tenors.

For instance, for an amount slab you can maintain rates for the Rate Code LIBOR for tenors 1 - 30 Days, 30 – 90 Days and so on. If you do not maintain tenor wise interest rates, you have to maintain the tenor as ‘0’ and then specify the rate. This is mandatory to save the details.

Note

You can maintain negative values for Tenor and Interest Rates.

3.6.2 Maintaining Parameters for Premature Withdrawal of TD

Oracle FLEXCUBE allows you to capture current TD balance amount using the SDE ‘DEPOSIT_AMOUNT’ which will consider TD amount – sum of partial redemption amount. You need to maintain the parameters by capturing the Interest rates on the basis of tenor, minimum amount, currency and effective date for a TD. Based on these parameters, the system picks the corresponding rate during Normal Maturity, Pre-Closure and Partial Redemption of TD.

Oracle FLEXCUBE also provides additional spread rate maintenance in addition to interest rate for TD based on the parameters maintained which is added to the derived interest rate from the rate chart maintenance and used for Interest calculation. The spread is maintained by specifying fixed rate in addition to the rate code attached.

3.6.3 Calculating Interest Rate during Normal Maturity of a TD

Oracle FLEXCUBE performs calculation of Interest Rate during normal Maturity of a TD. During interest liquidation on maturity for TDs, the system derives the interest rate from the rate maintenance in ‘LD MM Floating Rate Input’ screen based on tenor, amount slab, currency and effective date for a TD.

3.6.4 Calculating Interest Rate during Partial redemption of a TD

Oracle FLEXCUBE performs calculation on partial redemption of the TD. On partial redemption, the system performs the following actions:

3.6.5 Calculating Interest Rate during Pre Closure of a TD

Oracle FLEXCUBE allows calculating Interest Rate during Pre Closure of a TD. The system performs the following action during calculation on Pre Closure of the TD:

Note

3.6.6 Calculating Interest Rate Based on Cumulative Amount

Oracle FLEXCUBE allows calculating interest rate of a new deposit using the cumulative amount of other active deposits, under the same account class, customer, and currency. To enable this you should check the box ‘Interest Rate Based on Cumulative Amount’ at Account Class level.

Note

The cumulation of the amount for arriving at the interest rate is done at the account level during the save of below events:

If ‘Interest Rate Based on Cumulative Amount’ is checked at Account Class level, then system operates in the following ways:

The following table displays the effect on the lifecycle events of the new deposit:

Interest rate pickup

‘Interest Rate Based on Cumulative Amount’ Flag Status

YES

NO

Base Amount

Tenor

Base Amount

Tenor

Opening

 

 

 

 

 

Cumulative amount*

 

 

 

 

 

This deposit tenor

 

 

 

 

 

This deposit amount

 

 

 

 

 

This deposit tenor

Rate change on interest liquidation flag -YES

Rate change on rollover flag – YES

Floating Rate

Premature redemption remaining amount (Par­tial)

Premature Redemption Amount (Full/Partial)

Redeemed amount

Completed tenor

Redeemed amount

Completed tenor

When a deposit is opened automatically (like auto deposits, auto rollover etc.) the ‘Interest Rate Based on Cumulative Amount’ option from the account class is defaulted to the account level. For deposit opening/rollover from channels, this option can be set and send through the channel itself, else if it is not explicitly mentioned then the ‘Interest Rate Based on Cumulative Amount’ option set from the account class is defaulted and applied.

Once a deposit is opened, even if any of the deposit used to arrive at the interest rate is closed, the interest rate for the deposit remains the same. This is applicable for Dual Currency deposits, TDs created through Structured deposits, and Denominated deposits.

The interest statement, deposit advices, - deposit certificate (ICCOD), ICCOD_SIM, TDMM advice, Input slip advice, TD_ROLL statement, for the deposit account will have the advice Tags ‘_INTCUM_’ and ‘_BASEAMT_’. If the ‘Interest Rate Based on Cumulative Amount’ box is checked for the deposit, then the advice tag ‘_INTCUM_’ will have value ‘Y’ and this tag provides the option to display statements similar to ‘Interest rate for the deposit arrived using the cumulative amount of deposits available for the customer’. Also the advice tag ‘_BASEAMT_’ will have the value ‘Y’ and display the value of ‘Base Amount for arriving at the interest Rate’.

3.7 Pre-closure Factor Maintenance

During pre-mature redemption of a Term Deposit, a penalty can be levied on the interest amount. To calculate the penalty amount the pre-closure factor needs to be maintained based on the TD closing period percentage.This maintenance is computed based on the effective date for the currency and TD elapsed period percentage combination.

To maintain this pre-closure factor, you can invoke the ‘Pre-closure Factor Maintenance’ screen, by typing ‘STDPCMNT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

You can specify the following parameters:

Branch Code

The system defaults the logged in branch. You cannot modify it.

Pre-closure Factor ID

Specify a unique pre-closure factor ID with effective date. This is a mandatory field.

Description

Specify a brief description of the factor ID to be maintained.

Effective Date

Specify the date from which the factor ID will be effective from the adjoining calendar. A back-date value or a future dated value can be specified in this field. A duplicate date cannot be maintained for the same factor ID.

Currency

CCY

Select a valid currency code from the option list. Alternatively, you can select the currency from the option list. The list displays all valid currency codes maintained in the system. You can select a particular currency only once. If you select the same currency more than once, the system displays an error message. You can also select the option ‘ALL’ from the option list.

Pre-Closure Factor Details

Elapsed Period Percentage

Specify the percentage of the TD term at which the TD terms lapses. You can maintain multiple TD elapsed period percentages for a currency.

For example: A one year TD deposit is redeemed in 6 months then the Elapsed Period Percentage will be 50%.

For a particular currency, you can maintain multiple TD elapsed period percentage records.

Pre-closure Factor

Specify the pre-closure factor on the basis of the currency and elapsed period percentage maintained. You should specify a value between 0 and 1. The value ‘0’ is not an allowed value.

During pre-mature redemption of the TD, the system calculates the percentage of completed tenor by using the following formula:

(Completed Tenor/Actual Tenor)*100

Based on the completed tenor percentage the pre-closure factor which is maintained in this screen against the elapsed period percentage and the currency combination, is identified by the system. Both the completed and actual tenors are calculated from the account opening date of the deposit account.

Note

The day count method as maintained at the rule level is used for computing the completed and actual tenors. If branch is selected as 'ALL', the pre-closure factor maintained will be propagated to all the branches.

A System Data Element (SDE) ‘PRE_CLS_FACT’ computes the percentage of completed tenor and based on the result identifies the TD elapsed closing percentage and fetches the linked pre-closure factor. If the pre-closure factor is not maintained for a specific completed tenor percentage, then the SDE considers the value as 1.

The SDEs ‘PRE_CLS_LIQ’ identifies the liquidation period during pre-closure of the term deposit. If the interest calculation is performed for the liquidated period and for the redemption amount, SDE ‘PRE_CLS_LIQ’ will return the value as ‘1’.

The SDEs ‘PRE_CLS_ACCR’ identifies the accrual period during pre-closure of the term deposit. If the interest calculation is performed for the accrued period for the redemption amount, SDE ‘PRE_CLS_ACCR’ will return the value as ‘1’.

An SDE ‘PRE_CLS’ identifies whether the TD is redeemed pre-maturely or not. If the redemption is a pre-mature redemption, then the SDE considers the value as 1 or else the SDE considers the value as 0. For a partial redemption, the SDE considers the formula with the condition PRE_CLS = 1 and executes only for the redemption amount not for the remaining amount.

The formula setup is as follows:

Sl.No

Condition

Dr/Cr

Expression

Formula

Remarks

1

DEPOSTI_AMOUNT >0 AND PRE_­CLS = 0

Cr

1

((DEPOSIT_AMOUNT * DAYS * TER­M_RATE) / (100 * YEAR))

Booked

2

DEPOSIT_AMOUNT >0 AND PRE_­CLS = 1

Cr

2

((DEPOSIT_AMOUNT * DAYS * (TER­M_RATE * PRE_CLS_­FACT)) / (100 * YEAR))

Booked

Sl.No

Condition

Dr/Cr

Expression

Formula

Remarks

1

FORMULA1 > 0

Dr

1

FORMULA1 * TAX­_RATE /100

Tax Formula

OR

Sl.No

Condition

Dr/Cr

Expression

Formula

Remarks

1

DEPOSTI_AMOUNT >0 AND PRE_­CLS = 0

Cr

1

((DEPOSIT_AMOUNT * DAYS * TER­M_RATE) / (100 * YEAR))

Booked

2

DEPOSIT_AMOUNT >0 AND (PRE_­CLS_LIQ = 1 OR PRE_­CLS_ACCR = 1)

Cr

2

((DEPOSIT_AMOUNT * DAYS * (TER­M_RATE * PRE_CLS_­FACT)) / (100 * YEAR))

Booked

Sl.No

Condition

Dr/Cr

Expression

Formula

Remarks

1

FORMULA1 > 0

Dr

1

FORMULA1 * TAX­_RATE /100

Tax Formula

For more information on how to create an SDE, refer to the section ‘Invoking System Data Elements Maintenance’ in the chapter 'Maintaining System Data Elements' in Interest and Charges User Manual.