6. Annexure A - IP Rule Set-up

6.1 Introduction

This Annexure lists the Profit and Charge (IP) rules that need to be maintained for the Islamic TD module of Oracle FLEXCUBE specifically for partial redemption of TD.

This chapter contains the following sections:

• Section 6.2, "IP Rule Maintenance"
• Section 6.3, "UDE Value Maintenance"

6.2 IP Rule Maintenance

The components required to calculate profit (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 ‘Profit and Charges Rule Maintenance’ screen. You can invoke this screen by typing ‘IPDRLMNT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

You need to specify the following details:

On Account Opening Month

Check this box.

On Account Closure Month

Check this box.

SDE

Maintain the following SDEs:

• DAYS
• YEAR
• DEPOSIT_AMOUNT

The SDE ‘DEPOSIT_AMOUNT’ holds the value of the TD account minus the redemption amount.

UDE

Maintain the following UDE:

• MUDARABAH_RATE

Type

Select the option ‘Rate’ from the adjoining drop-down list.

Get Latest

Select the option ‘Use Effective’ from the adjoining drop-down list.

Click ‘Formulas’ button and invoke the ‘Formulas’ screen.

You need to maintain one booked formulae.

Formula 1

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
DEPOSIT_AMOUNT > 0	DEPOSIT_AMOUNT * (MUDARABAH_RATE/100) * (DAYS/YEAR )

For details about the screen, refer the chapter ‘Maintaining Interest Rules’ in the Interest and Charges User Manual.

6.3 UDE Value Maintenance

This topic contains the following topics:

• Section 6.3.1, "Maintaining UDE Value"
• Section 6.3.2, "TD with Capitalization"
• Section 6.3.3, "Normal TD with Simple Profit "
• Section 6.3.4, "Recurring Deposit Scheme"

6.3.1 Maintaining UDE Value

You can maintain UDE values for the rules using the ‘Profit & Charges User Data Element Maintenance’ screen. You can invoke the ‘Interest & Charges User Data Element Maintenance’ screen by typing ‘IPDUDVAL’ 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 IP products. Assume that you have maintained the following IP products:

• TD with Capitalization
• Normal TD with Simple Profit
• Recurring deposit Scheme

6.3.2 TD with Capitalization

You need to maintain values for the following UDEs under this product:

• TD_1
• TD_2
• TD_3
• TD_PNL
• TAX_RATE

6.3.3 Normal TD with Simple Profit

You need to maintain values for the following UDEs under this product:

• TD_1
• TD_2
• TD_3
• TD_PNL

6.3.4 Recurring Deposit Scheme

You need to maintain values for the following UDEs under this product:

• TD_1
• OVERDUE_PENALTY
• TAX_RATE

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 ‘IPDRATES’ 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 profit applicable on a TD account.

Refer the chapter ‘Floating Rate Codes for IP Module’ for details about rate maintenance.