2.2.32 Adhoc Fee Maintenance

This topic describes about the detailed information on Adhoc fee processing.

  • For a bank, there are various adhoc expenses incurred on a facility such as inspection, legal, amendment, renewal, registration, consultation and others during a facility’s lifecycle. Banks can collect the various adhoc expenses associated with a facility through adhoc fees functionality from the customer on an ad-hoc (as and when required) manner.
  • You can capture Liquidation Method as Adhoc in Fee & Accounting Class Maintenance screen for a rule code in Rule Preferences screen.
  • You have below two options to liquidate an Adhoc fee, depending upon the related business case.
    • OPTION 1 – Adhoc fee where bank has to communicate in advance to customer.
    • OPTION 2 - Adhoc fee where bank wants to collect as and when required – no upfront communication to customer required.
    • The two options can be summarized as below.

    Figure 2-34 Processing flow chart


    Processing flow chart

  • OPTION 1 - Via Facility – In a scenario where you have to communicate in advance to customer on applicable adhoc fees,
    • You can link the adhoc fee rule to same fee class which is going to be attached to facility.
    • Adhoc fee rules gets defaulted along with the fee class at time of facility creation in Facility Maintenance (GEDFACLT) screen.
    • Liquidation Method value gets defaulted as Adhoc in Liquidate Method field in facility Fee Preference screen.
    • Fee start date and Fee end date – Not enterable for an adhoc fee and is defaulted based on facility start and end dates – for adhoc fee rules, fee start date will always be current dated.
    • You can configure the Account No and Branch to signify the account number which needs to be debited for adhoc fee.
    • Two additional columns (fields) are introduced in Fee Rule Preferences section as below.
      • Adhoc Fee Rate – You can enter the required Rate as opted in GEDRULES.
      • Adhoc Fee Amount – You can enter the required Amount as opted in GEDRULES.
        • Since adhoc fees is collected as per the business requirement, the values entered for rate or amount here will only serve as reference values during actual liquidation.
        • During actual adhoc fee liquidation, system will show the references value and based on business requirement, you can chose to either continue with the same or overwrite and enter a new fee value.
        • You are allowed to avail below options during actual adhoc fee liquidation.
          • Collect the suggested (referenced) adhoc fee based on rate/amount.
          • Increase/decrease the adhoc fee value (from referenced value).
          • Collect flat amount instead of configured (referenced) rate and vice versa.
        • For Adhoc Fees, system does not allows to enter the effective dates and specify the corresponding amount/rate details in Effective Dates and Fee Rate Details sections respectively.
        • You can continue to define Effective Dates and Fee Rate Details sections respectively for normal fee rules.
        • You can then save the facility record.
  • Adhoc fees configured as part of facility does not gets liquidated by the system automatically and is available for liquidation/collection whenever required via a new screen – Adhoc fee Maintenance screen.
  • OPTION 2 – Direct - In a scenario where where bank wants to collect an adhoc fee as and when required but with no upfront communication to customer and thus does not requires the adhoc fee to be linked at facility level.
    • This can also be necessitated because a new adhoc fee needs to be collected against a facility.
    • In this case, adhoc fees could be merged into a separate class called as adhoc fee class and you would not link that fee class to the facility.
    • Post creating the fee class, you can navigate directly to Adhoc fee maintenance screen to perform adhoc fee liquidation.

Note:

The fields, which are marked with an asterisk, are mandatory.
  1. On the Home screen, specify GEDADHOC in the text box and click the Next icon.
    The Adhoc Fee Maintenance screen is displayed.

    Figure 2-35 Adhoc Fee Maintenance


    Description of Figure 2-35 follows
    Description of "Figure 2-35 Adhoc Fee Maintenance"

    • Each adhoc fee maintenance record is identified with a system generated UNIQUE REFERENCE NUMBER.
    • Select the liability and Facility id (line code) for the selected liability.
    • Based on the facility selected, system defaults the associated fee class and a non-modifiable flag Fee Class linked to Facility will get selected – OPTION 1
    • You can modify the defaulted fees class and select the fee class that not linked to facility – OPTION 2
      • In above case, the flag Fee Class linked to Facility will not get selected.
    • You can then click on the populate button to fetch and default the details of linked adhoc fees rules to the opted fee class.
    • You can then select on or more of the adhoc fee rules for liquidation – liquidate flag as Yes or No.

      Note:

      It is not mandatory to enter the values for an adhoc fee which is not opted for liquidation – Liquidate flag is No.
    • SDE balance column will get defaulted which will indicate the underlying SDE balance at linked facility.
    • For OPTION 1 (via Facility) - System will also default the below attributes.
      • Configured values (reference value) at facility level.
        • If rate is configured then system will display both the rate and the calculated amount based on the current value (at the point of defaulting) of underlying SDE.
        • If amount is configured then system will display the configured amount at facility.
      • Account Branch and account number configured at facility level – you can update the same.
    • For OPTION 2 (Direct) – The above attributes Configured values, Branch and Account Number will not get defaulted.
    • System will also default the Liquidation Preference from fee class maintenance – Manual or Auto for each fee rule which you can modify.
    • SDE Type – New dropdown after Liquidation Preference is made available with options as Rate or Amount – It is defaulted based on the rule configuration (rate/amount).
      • You need to select the appropriate option based on what is to be finally liquidated (RATE or AMOUNT).
      • You can even change the SDE type from amount to rate and vice versa.
    • You can enter the appropriate value required for liquidation under ‘Final Configured Value’ based on the selected SDE Type Column
      • For OPTION 1 - The values in this column is defaulted from ‘Configured Values’ (reference value) sections and user can modify accordingly.
      • If SDE Type is selected as RATE then value entered here is considered as rate.
      • If SDE Type is selected as AMOUNT then value entered here is considered as amount.
    • A Compute button is made available which on clicking will populate the Final Computed Amount for all adhoc fee rules as per below
      • For Rate - based on underlying SDE and Rate provided in Final Configured Value.
      • For Amount – Same value as Final Configured Value.

      Note:

      • On changing fee rule from amount to rate, system considers the SDE configured at GEDRULES for calculating the amount.
      • Actual SDE balances during liquidation is considered for computation of Adhoc fee configured as rate and having liquidation preference as auto.
      • System alerts (override) on save of the record, if a fee rule is of type amount but a rate is opted for liquidation.
      • Similarly, system alerts (override) on save of the record, if a fee rule is of type rate but an amount is opted for liquidation.
    • You are allowed to select the Liquidation date against each opted fee rule – can be current dated/future dated (defaulted with current date) but cannot be backdated.
      • Current dated liquidations can have Liquidation preference either as Manual or Auto.
      • Future dated liquidations can have Liquidation preference only as Auto.
    • You are also allowed to select the amortization duration (amortization end date) against each selected fee rule - Only ‘Daily’ and ‘One-time’ amortization frequencies are supported for an adhoc fee.
      • This parameter defaults the facility expiry date if the same is provided at the linked facility level.
      • If required, you can overwrite the defaulted date and enter a new one subject to below validations.
      • Amortization end date cannot be greater than the facility expiry date.
      • For accrual frequency opted as ‘One-Time’, amortization end date should be same as fee liquidation date – System will validate.
      • For accrual frequency opted as ‘Daily’, amortization end date should be greater than fee liquidation date – System will validate.
      • System will consider the entered amortization end date for calculating the daily accruals/amortization amount.
    • Once the record is saved and authorized, the adhoc fee maintenance record will retain only those fee rules which have been opted for liquidation – liquidate option selected as ‘Yes’.

      Note:

      The adhoc fee record should be authorized in the same branch where it has been created.
    • Adhoc fee liquidation is carried out based on below conditions.
      • If liquidation preference is manual and liquidation date is current dated, fee amount is liquidated immediately.
      • If liquidation preference is auto and liquidation date is current dated, fee amount is liquidated as part of EOD same date.
      • If liquidation preference is auto and liquidation date is future dated, fee amount is liquidated as part of EOD on future date.
    • Accounting entries for the adhoc fee is posted at the linked facility for both fee liquidation (FLIQ) and fee accrual/amortization (FACR) and can be viewed in FACILITY > EVENTS button.
    • You can view the adhoc fees collected against the facility using the screen GESADHOC.

      Note:

      • Pending facility events if any such as INIT, UTILs and DE-UTILs will also be triggered as part of Manual Fee liquidation event (FLIQ) if they are yet to triggered for the facility.
      • If no Manual fee is configured then all events such as INIT, UTILs and DE-UTILs is triggered as part of Auto fee liquidation during end of the day processing – EOD BATCH.
      • Adhoc fee gets liquidated based on the facility currency.
      • You can collect the same adhoc fee any number of times from adhoc fee maintenance screen – including multiple times on the same date.
      • Each time an adhoc fee (same or different) is to be liquidated against a facility, you are required to create a new adhoc fee maintenance record - separate records for successive liquidations.
      • Separate FLIQ and FACR events with accounting entries gets posted if same adhoc fee is liquidated multiple times against a facility.
      • You can modify below fields in an existing adhoc fee maintenance record having yet to be liquidated adhoc fees – current dated (auto liquidation) or future dated.
        • Liquidate flag
        • Branch
        • Account No
        • SDE Type
        • Final Configured Value
        • Liquidation Date
        • Amortization End Date
      • You cannot modify any attribute of adhoc fees which are already liquidated except ‘Amortization End Date’.
      • For adhoc fees, which are yet to be liquidated (current and future dated), system validates and throws error message if you try to liquidate the same fees again
      • For adhoc fees, which are already liquidated, system warns and throws an OVERRIDE if you try to liquidate the same fees again on the same date irrespective of the amount.
      • To cancel an yet to be liquidated adhoc fee (current and future dated), you should visit the existing adhoc fee maintenance record and select the liquidate option as ‘No’ and save the record again.
    • Examples

      Table 2-108 Examples

      Original Record Current Date : 17-01-2022
      UNIQUE REFERENCE NUMBER REC001
      Facility FAC001

      Table 2-109 Example

      Liquidate Adhoc fee Branch Account Number Account Number Final Configured Value Final Computed Amount Liquidation Date Amortization End Date
      Yes Inspection Fee 505 ACCNT001 Manual 1000 1000 17-01-2022 17-01-2023
      Yes Legal fee 505 ACCNT001 Auto 5% 500 17-01-2022 17-01-2023
      Yes Admin Fee 505 ACCNT001 Auto 300 300 19-01-2022 19-01-2023
      Yes Renewal fee 505 ACCNT001 Auto 7% 700 19-01-2022 19-01-2023
      • Scenario 1 – Same adhoc fees are to be collected again on the facility – same day.

        Table 2-110 New Record

        Modification 1 – UNLOCK Current Date : 17-01-2022
        UNIQUE REFERENCE NUMBER REC002
        Facility FAC001

        Table 2-111 New Record

        Liquidate Adhoc fee Branch Account Number Liquidation Pref Final Configured Value Final Computed Amount Liquidation Date Amortization End Date Remarks
        Yes Inspection Fee 505 ACCNT001 Manual 600 600 17-01-2022 17-01-2023 New Record with same fees – Override
        Yes Legal fee 505 ACCNT001 Auto 3% 300 17-01-2022 17-01-2023 New Record with same fees – Override
      • Scenario 2 – Modification on existing record – Adhoc Fees yet to be liquidated - same day.

        Table 2-112 Modification 1 – UNLOCK

        Modification 1 – UNLOCK Current Date : 17-01-2022
        UNIQUE REFERENCE NUMBER REC001
        Facility FAC001

        Table 2-113 Modification 1 – UNLOCK

        Liquidate Adhoc fee Branch Account Number Liquidation Pref Final Configured Value Final Computed Amount Liquidation Date Amortization End Date Remarks
        Yes Inspection Fee 505 ACCNT001 Manual 1000 1000 17-01-2022 17-01-2023 No Modification allowed as already liquidated (except Amortization End Date).
        Yes Legal fee 505 ACCNT001 Auto 6% 600 18-01-2022 18-01-2023 Highlighted cells have modified values.
        Yes Admin Fee 506 ACCNT002 Manual 500 500 17-01-2022 17-01-2023

        Liquidation Pref changed to Manual – Liquidation happens on save.

        Liquidation date changed to current date.
        No Renewal fee 505 ACCNT001 Auto 7% 700 19-01-2022 19-01-2023 Fee will not be liquidated on 19-01-2022.
      • Scenario 3 – Modification on existing record – Adhoc Fees yet to be liquidated – next day.

        Table 2-114 Modification 2 – UNLOCK

        Modification 2 – UNLOCK Current Date : 18-01-2022
        UNIQUE REFERENCE NUMBER REC001
        Facility FAC001

        Table 2-115 Modification 2 – UNLOCK

        Liquidate Adhoc fee Branch Account Number Liquidation Pref Final Configured Value Final Computed Amount Liquidation Date Amortization End Date Remarks
        Yes Inspection Fee 505 ACCNT001 Manual 1000 1000 17-01-2022 17-01-2023 No Modification allowed as already liquidated (except Amortization End Date).
        Yes Legal fee 505 ACCNT001 Auto 7% 700 18-01-2022 18-01-2023 Modification allowed as not yet liquidated – Will be liquidated in 18-01-2022 EOD.
        Yes Admin Fee 506 ACCNT002 Manual 500 500 17-01-2022 17-01-2023 No Modification allowed as already liquidated.
        Yes Renewal fee 505 ACCNT001 Auto 7% 700 19-01-2022 19-01-2023 Fee will be liquidated on 19-01-2022.

Parent topic: Facilities Maintenance