2. Standing Instructions - an Overview

2.1 Introduction

A Standing Instruction (SI) is a service offered to customers of a bank, wherein regular transactions that the customer wants to make are processed as a matter of course instead of initiating specific transactions each time. Once initiated, a standing instruction may go on for many months, or even years, with each cycle being processed automatically.

This chapter contains the following section:

• Section 2.2, "Key Features of SI Module"

2.2 Key Features of SI Module

This section contains the following topics:

• Section 2.2.1, "Processing Standing Payment Orders"
• Section 2.2.2, "Processing Standing Collection Orders"
• Section 2.2.3, "Processing Sweep In Transactions "
• Section 2.2.4, "Processing Sweep Out Transactions"
• Section 2.2.5, "Processing Variable Payment Transactions "
• Section 2.2.6, "Processing Range Balancing Sweep"
• Section 2.2.7, "Reports"

2.2.1 Processing Standing Payment Orders

As a measure to maximize processing efficiency, the SI module offers the following features:

• SI module processes the following types of standing instructions:
  • Standing Payment Order
  • Standing Collection Order
  • Account Sweep (Sweep in and Sweep out)
  • Variable Payment
  • Range Balancing Sweep

• SI module is designed to automatically process an instruction that has been recorded, apply relevant charges, and generate advices. Instructions can be recorded for handling a situation where an instruction cannot be processed due to lack of funds.
• The product definition facility enables you to create business products with certain attributes. When an instruction is processed under a product, these attributes will be applied automatically. Flexibility, which is the mainstay of Oracle FLEXCUBE’s design, ensures that you have the option to modify the attributes while processing an instruction, to suit specific customer needs.
• SI module has a flexible mechanism for defining and applying charges. Charges can be collected either as a rate or as a flat amount on a slab or tier system. These can be defined for products and modified for individual instructions.

A payment order is perhaps the most commonly used service. Under this service, one or more accounts of your customer are debited and one or more credited. This is called a payment order because the service would mostly be used for making a payment, like regular insurance payments.

2.2.2 Processing Standing Collection Orders

A collection order is issued by a customer when a certain amount will come in to a customer’s account on a regular basis. The crediting of this amount has to be handled through other modules of Oracle FLEXCUBE -- Remittances or Journal Entries. When a collection type of instruction is recorded, a Collection advice will be generated for the customer who serves as a reminder for follow up on the amount that should be credited into the customer’s account.

2.2.3 Processing Sweep In Transactions

A sweep in instruction will be used when the balance in a customer account should constantly be maintained at a certain balance. A sweep in instruction ensures that whenever the balance in the customer account goes below a certain amount, money is swept in from another account.

2.2.4 Processing Sweep Out Transactions

A sweep out instruction will be used to move funds out of an account whenever the balance reaches above a certain minimum balance. This is typically used to sweep funds out of a low interest earning account into a high interest earning one.

2.2.5 Processing Variable Payment Transactions

A variable payment is a variation of the payment type of instruction. In a payment instruction you would fix the amount to be debited, when the instruction is initiated this would be the amount for each cycle. In a variable payment type of instruction, the amount to be debited for each cycle would be different. Examples of variable payments would be the payment of electricity or telephone bills where the amount would be different each time. Thus, for a variable payment type of instruction, you would specify the amount every time a cycle has to be executed.

2.2.6 Processing Range Balancing Sweep

This facility gives the provision to sweep funds from one account to another based on the maximum and minimum balance limits. The account for which the minimum and maximum limit is maintained is called a child account and the other linked account is called the parent account. If the balance of the child account exceeds the maximum limit then the excess balance will be swept out of the parent account.If the balance of child account is less than the lower limit then the deficit will be credited by a sweep from parent account.

The amount tags specific to range balancing sweep are the following:

• SI_AMT_RBOUT: This will be the sweep out amount in sweep currency.
• AMT_EQV_RBOUT: This will be amount equivalent of sweep out amount after currency conversion if any.
• SI_AMT_RBIN: This will be the sweep in amount in sweep currency.
• AMT_EQV_RBIN: This will be the amount equivalent of sweep in amount after currency conversion if any.

The accounting entries passed is as below:

Accounting Role	Dr/Cr	Amount Tag
Dr Account	Debit	SI_AMT_R­BOUT
Cr Account	Credit	AMT_EQV_RBOUT
Dr Account	Credit	SI_RMT_RBIN
Cr Account	Debit	AMT_EQV_RBIN

Intra-day sweep transactions can be run manually during transaction input stage of FCUBS.These transaction can be executed in separated groups at different intervals during the day.You can also reverse the execution of an intra-day batch.

2.2.7 Reports

Information on the SIs defined and processed in Oracle FLEXCUBE can be retrieved in many forms. These reports can either be printed or displayed on the screen. The following are the reports for the SI module:

• Successful Standing Instructions Report
• Unsuccessful Standing Instructions
• Standing Instruction Pending Collections Report
• Standing Instructions by Customer Report
• Standing Instructions by Product Type Report
• Standing Instructions Due/Pending Report
• SI Executed for external Acc, DD, and Banker’s Cheques Report
• Standing Orders Placed Today Report
• Amendment of Standing Orders Report Stale Cheque Report
• Closed Standing Orders Report
• Penalty on Rejected Standing Orders Report