3.2 Arrangement Definition Maintenance

This topic describes the information to define various arrangement templates which is a group different arrangement parameter based on arrangement reference i.e., on deposit or liquidation and further link the same to an arrangement party i.e.; Corporate or Correspondent bank.

Banks can make funds available to corporate parties even before the cheques are cleared. This is referred to as an ‘Arrangement’. However, if the instrument collection fails or is delayed, or even if the instrument is marked as ‘Returned’, then the banks need to recover the funds through credit reversal. The Arrangement Definition screen enables banks to create arrangement and recovery parameters, with respect to the collections facility. Once an Arrangement Definition is created, it can be linked to the required corporate party and product using the Arrangement Decisioning screen.

The arrangements reference for the Collections module in Oracle Banking Cash Management is based on the following two parameters:

• Deposit Date: For the arrangement based on deposit date, the bank provides the corporate an option of different arrangement days on which the corporate desires the payment of funds against instruments deposited by the corporate. The arrangement days depend on the charge the corporate is willing to pay, and the desired liquidity. Thus, the bank pays the amount to the corporate on the arrangement day or value date on presenting a cheque. For example, if a corporate has opted for a ‘Day + 1’ arrangement with the bank, then the corporate will receive the funds 1 day after the instrument has been deposited regardless of the actual number of days required to clear the instrument.
• Realization Date: For the arrangement based on realization date, the corporate receives credit only after the instrument has been marked as cleared in the system. If the instrument has been returned (for reasons such as insufficient funds in the drawer’s account, discrepancy in the signature, and so on), then the corporate does not receive the funds.

This topic contains the following subtopics:

• Create Arrangement Definition
  This topic describes the systematic instruction to create arrangement codes.
• View Arrangement Definition
  This topic describes the systematic instruction to view, modify, delete, or authorize arrangement code details.