1.1 Introduction

In Oracle Lending, you can define the different types of charges or fees that apply on a product as classes. A charge class is a specific type of charge component. For example, Charges for amending the terms of a loan.

When defining a product, you merely have to attach the required classes. In this manner, a contract processed under a particular product acquires the classes (components) associated with the product.

To apply a charge or fee on a loans product, you should first define attributes for each of the components. You can define these attributes by specifying a rule for the charge or fee. These charge rules should in turn be linked to a product through a class, so that the attributes of the charge rule is applied on all contracts linked to the product. However, while capturing the details of a contract, you can modify some of the attributes defined for a rule. Further, for a contract, you can also indicate whether the application of a specific charge component should be waived.

More than one charge or fee can be applied on a product. For example, you could link two charge to an outgoing transfer product, one with 0.05% of the transfer amount as the charge and another with a flat amount of say 200 local currency units. The first one could be your commission on the transfer and the second, for the SWIFT or cable charges incurred to effect the transfer. These are processed as two different charge components. The income accounts can be different for these components. The two charge components are reported in all reports and in the customer correspondence regarding the transfer.

Note:

Pricing benefits are offered to customers based on eligibility criteria, validity period, and the benefits of the scheme in Oracle FLEXCUBE Relationship Pricing. If Relationship Pricing check box is enabled in Customer Maintenance screen and RP FCUBSCoreService is maintained in Integration Parameter Maintenance screen, then RP Rate, Maximum Rate, Minimum Rate, Spread are applied for interest in ICCF Details screen. Based on variance rule maintained in UBS you can get the RP rate as Rate or Spread for interest component. In addition, RP Rate and Amount is applied for charge and fee components (Charge/Fee rate, Charge/Fee amount).

The following steps are involved in processing charges or fee:

1. Defining charge or fee rules
2. Defining charge or fee classes
3. Associating charge or fee classes with a product
4. Specifying charges or fee for a contract.