10.2 Pool Interest Method

This topic describes the information about the Pool Interest Method.

For Pool Interest method, IC and WHT configuration should be done on the Notional Header Account of the Pool.

The notional header should be mapped to IC product with the two formulae follows:

• Credit / Debit formula for computing the interest
• Debit formula for computing the tax

The system performs the interest calculation as per the balance on the Header Account as well as compute the tax on the same.

The Interest Payable GL (Credit Interest), Interest Receivable GL (Debit Interest) and the Tax Payable GL (WHT) along with the accounting will be maintained in the system. The Bridge GL for interest will be maintained in the Third-Party Account maintenance screen as usual.

Oracle Banking Liquidity Management does the tax distribution to child accounts using the same method as what is used for Interest Reallocation. As per the liquidation cycle maintained, the system does the Interest and Tax postings to DDA.

Tax will be paid to the government from the Notional account in the Jurisdiction of the Notional account.

For negative interest, WHT is not applicable.