This Annexure lists the Interest and Charge (IC) rules that need to be maintained for the TD module of Oracle FLEXCUBE. It also gives the UDEs and rates for which values need to be maintained.
This chapter contains the following sections:\
This section contains the following topics:
The components required to calculate interest (the principal, period, and rate) are broadly referred to as ‘Data Elements’. Data elements are of two types:
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 ‘ICDRUMNT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
Note
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:
Specify the following details:
On Account Opening Month
Check this box.
On Account Closure Month
Check this box.
SDE
Maintain the following SDEs:
UDE
Maintain the following UDEs:
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 and one tax formula.
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Debit/Credit
Select ‘Credit’ from the adjoining drop-down list.
Days in a Month
Select ‘30 Days’ from the adjoining drop-down list.
Days in a Year
Select ‘360’ 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 | ||
---|---|---|---|
(TENOR<=90) AND (DEPOSIT_AMOUNT>0) AND PENALTY_BASIS = 0 | ((DEPOSIT_AMOUNT* DAYS * TD_1) / (100 * YEAR)) | ||
(TENOR>90 AND TENOR<=180) AND (DEPOSIT_AMOUNT>0) AND PENALTY_BASIS = 0 | ((DEPOSIT_AMOUNT* DAYS * TD_2) / (100 * YEAR)) | ||
(TENOR>180 AND TENOR<=730) AND (DEPOSIT_AMOUNT>0) AND PENALTY_BASIS = 0 | ((DEPOSIT_AMOUNT* DAYS * TD_3) / (100 * YEAR)) | ||
(TENOR<=90) AND (DEPOSIT_AMOUNT>0) AND (PENALTY_BASIS = DEPOSIT_AMOUNT) | ((PENALTY_BASIS * DAYS) * (TD_1-TD_PNL)) / (100 * YEAR) | ||
(TENOR>90 AND TENOR<=180) AND (DEPOSIT_AMOUNT>0) AND (PENALTY_BASIS = DEPOSIT_AMOUNT) | ((PENALTY_BASIS * DAYS) * (TD_2-TD_PNL)) / (100 * YEAR) | ||
(TENOR>180 AND TENOR<=730) AND (DEPOSIT_AMOUNT>0) AND (PENALTY_BASIS = DEPOSIT_AMOUNT) | ((PENALTY_BASIS * DAYS) * (TD_3-TD_PNL)) / (100 * YEAR) |
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘30 Days’ from the adjoining drop-down list.
Days in a Year
Select ‘360’ 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 expression:
Case | Result | ||
---|---|---|---|
DEPOSIT_AMOUNT>0 AND PENALTY_APPLY = 1 | ((PENALTY_BASIS* (DAYS_FROM_START-DAYS)) * TD_PNL) / (100 * YEAR) |
Specify the following details:
Book Flag
Select ‘Tax’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘30 Days’ from the adjoining drop-down list.
Days in a Year
Select ‘360’ 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 expression:
Case | Result | ||
---|---|---|---|
FORMULA1 >0 | FORMULA1 * TAX_RATE /100 |
Specify the following details:
On Account Opening Month
Check this box.
On Account Closure Month
Check this box.
SDE
Maintain the following SDEs:
UDE
Maintain the following UDEs:
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 and one tax formula.
Specify the following details:
Book Flag
Select ‘Booked’ 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.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen.
Specify the following expressions:
Case | Result | ||
---|---|---|---|
(TENOR<=90) AND (DLY_NET_BAL_M>0) AND PENALTY_BASIS = 0 | ((DLY_NET_BAL_M * DAYS * TD_1) / (100 * YEAR)) | ||
(TENOR>90 AND TENOR<=180) AND (DLY_NET_BAL_M>0) AND PENALTY_BASIS = 0 | ((DLY_NET_BAL_M * DAYS * TD_2) / (100 * YEAR)) | ||
(TENOR>180 AND TENOR<=730) AND (DLY_NET_BAL_M>0) AND PENALTY_BASIS = 0 | ((DLY_NET_BAL_M * DAYS * TD_3) / (100 * YEAR)) | ||
(TENOR<=90) AND (DLY_NET_BAL_M>0) AND (PENALTY_BASIS = DLY_NET_BAL_M) | ((PENALTY_BASIS * DAYS) * (TD_1-TD_PNL)) / (100 * YEAR) | ||
(TENOR>90 AND TENOR<=180) AND (DLY_NET_BAL_M>0) AND (PENALTY_BASIS = DLY_NET_BAL_M) | ((PENALTY_BASIS* DAYS) * (TD_2-TD_PNL)) / (100 * YEAR) | ||
(TENOR>180 AND TENOR<=730) AND (DLY_NET_BAL_M>0) AND (PENALTY_BASIS = DLY_NET_BAL_M) | ((PENALTY_BASIS * DAYS) * (TD_3-TD_PNL)) / (100 * YEAR) |
Specify the following details:
Book Flag
Select ‘Booked’ 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.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expression:
Case | Result | ||
---|---|---|---|
DLY_NET_BAL_M>0 AND PENALTY_APPLY = 1 | (PENALTY_BASIS * DAYS_FROM_START * TD_PNL) / (100 * YEAR) |
Specify the following details:
Book Flag
Select ‘Tax’ 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.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expression:
Case | Result | ||
---|---|---|---|
FORMULA1 >0 | FORMULA1 * TAX_RATE /100 |
Specify the following details:
On Account Opening Month
Check this box.
On Account Closure Month
Check this box.
SDE
Maintain the following SDEs:
UDE
Maintain the following UDEs:
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 and one tax formula.
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Debit/Credit
Select ‘Credit’ from the adjoining drop-down list.
Days in a Month
Select ‘30 Days’ from the adjoining drop-down list.
Days in a Year
Select ‘360’ 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 | ||
---|---|---|---|
DLY_NET_VD_BAL > 0 | (DLY_NET_VD_BAL * DAYS * TD_1) / (100 * YEAR) |
Specify the following details:
Book Flag
Select ‘Booked’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘30 Days’ from the adjoining drop-down list.
Days in a Year
Select ‘360’ 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 | ||
---|---|---|---|
RD_INSTALL_DUE>0 | (RD_INSTALL_DUE*OVERDUE_PENALTY* RD_OVERDUE_DAYS) /(100* YEAR) |
Specify the following details:
Book Flag
Select ‘Tax’ from the adjoining drop-down list.
Debit/Credit
Select ‘Debit’ from the adjoining drop-down list.
Days in a Month
Select ‘30 Days’ from the adjoining drop-down list.
Days in a Year
Select ‘360’ 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 | ||
---|---|---|---|
FORMULA1>0 | FORMULA1* TAX_RATE /100 |
Specify the following details:
On Account Opening Month
Check this box.
On Account Closure Month
Check this box.
SDE
Maintain the following SDEs:
UDE
Maintain the following UDEs:
UDE | Type | ||
---|---|---|---|
TD_1 | Rate Code as Rate | ||
TD_PNL | Rate | ||
TAX_RATE | Rate |
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 and one tax formula.
Specify the following details:
Book Flag
Select ‘Booked’ 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.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. Specify the following expression:
Case | Result | ||
---|---|---|---|
DEP_AMT_INIT>0 | DEP_AMT_INIT*TD_1*DAYS/(YEAR*100) |
Specify the following details:
Book Flag
Select ‘Booked’ 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.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expression:
Case | Result | ||
---|---|---|---|
DEP_AMT_INIT>0 AND PENALTY_APPLY = 1 | PENALTY_BASIS*DAYS_FROM_START*TD_PNL/(YEAR*100) |
Specify the following details:
Book Flag
Select ‘Tax’ 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.
Rounding Required
Check this box.
Click ‘Formula Wizard’ button and invoke the ‘Formula Wizard’ screen. In this screen, you need to maintain the following expression:
Case | Result | ||
---|---|---|---|
FORMULA1 > 0 | FORMULA1*TAX_RATE/100 |
Sample formula below:
(DEPOSIT_AMOUNT * TENOR * RATE)/(YEAR*100)
DEPOSIT_AMOUNT - System defined Element (SDE) for principal amount of the deposit
TENOR – SDE for tenor of the deposit
RATE – UDE for interest rate on the deposit.
YEAR – SDE days in the year (360/365/366/Actual)
The following formula will be used to calculate interest rate and maturity amount during term deposit account opening.
Sample formula is given below:
Condition | Formula | ||
---|---|---|---|
DEPOSIT_AMOUNT >0 | ((DEPOSIT_AMOUNT * DAYS * INT_RATE) / (100 * YEAR)) |
Deposit Amount: 15000 USD
Deposit Booking Date: 01-Jan-2011
Tenor: 180 Days
Interest Rate: 9%
Interest Amount: (15000 * 9 * 180)/ (365 * 100)
= 665.75 USD
Interest Rate and Maturity Amount after Rollover
The example below shows how the interest rate and maturity amount are calculated after term deposit rollover.
Condition | Formula | ||
---|---|---|---|
DEPOSIT_AMOUNT >0 | ((DEPOSIT_AMOUNT * DAYS * INT_RATE) / (100 * YEAR)) |
Deposit Amount: 10000 USD
Deposit Booking Date: 01-Jan-2011
Tenor: 180 Days
Interest Rate: 9%
Interest Amount: (10000 * 9 * 180)/ (365 * 100)
= 443.84 USD
Rollover Date: 30-Jun-2011
After Rollover
Deposit amount: 10443.84 USD.
Interest rate: 9.25%.
Interest amount: (10443.84 * 9.25 * 180)/ (365 * 100)
= 476.41 USD
Based on the ‘WAIVE_INTEREST’ SDE, a new formula will be created in the IC Rule Definition screen for Interest Waiver.
Condition | Formula | ||
---|---|---|---|
DEPOSIT_AMOUNT >0 AND WAIVE_INTEREST=0 | ((DEPOSIT_AMOUNT * DAYS * INT_RATE) / (100 * YEAR)) |
The example below explains how the interest that is to be paid out to the account holder will be waived off during redemption.
Deposit account opening date: 01-Jan-2011
Accrual frequency is daily.
The liquidation is at maturity.
Deposit amount: 10000 USD
Tenor: 365 Days
Interest rate: 9%
Maturity date: 31-Dec-2011
Redemption date: 15-Dec-2011
Computed interest amount: till redemption date: 858 .08 USD
Computed interest amount: 900 USD
During Redemption when the ‘Waive Interest’ is set to ‘Y’:
Redemption date: 15-Dec-2011
Redemption type: Full Redemption
Waive interest flag: Y
Amount to be paid to the customer: 10000 USD
During Redemption when the ‘Waive Interest’ is set to ‘N’:
Redemption date: 15-Dec-2011
Redemption type: Full Redemption
Waive interest flag: N
Amount to be paid to the customer: 10858.08 USD
The following formula will be used to calculate principal and interest amount during term deposit redemption
Sample formula below:
Condition | Formula | ||
---|---|---|---|
DEPOSIT_AMOUNT >0 | ((DEPOSIT_AMOUNT * DAYS * INT_RATE) / (100 * YEAR)) |
Deposit account opening date: 01-Jan-2011
Deposit amount: 10000 USD
Tenor: 365 Days
Interest rate: 10%
Interest payout frequency: Monthly
Maturity date: 31-Dec-2011
Computed interest amount till maturity: 1000 USD
Maturity Amount: 11000 USD
Partial Redemption
Redemption date: 01-Jul-2011
Redemption type: Partial Redemption
Redemption Amount: 5000 USD
Interest liquidated so far: 600 USD
Recalculated interest rate: 7%
Recomputed Interest till redemption: 350 USD
Amount to be recovered from customer: 250 USD
Full Redemption
Redemption date: 01-Jul-2011
Redemption type: Full Redemption
Redemption Amount: 10000 USD
Interest liquidated so far: 600 USD
Recalculated interest rate: 7%
Penalty rate: 2%
Recomputed Interest till redemption: 350 USD
Amount to be recovered from customer: 250 USD
Penalty amount to be recovered: 99 USD
Net Amount paid to the customer after full redemption: (10000 - 250 - 99) = 9651 USD
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:
You need to maintain values for the following UDEs under this product:
You need to maintain values for the following UDEs under this product:
You need to maintain values for the following UDEs under this product:
You need to maintain values for the following UDEs under this product:
You can maintain rate codes for branches using the ‘‘Interest & Charges Branch Availability Maintenance’ screen.
You can invoke this screen by typing ‘ICDRATMA’ 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:
For the aforesaid rate code, 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 ‘ICDRATMA’ 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.