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## 1.2 Release Enhancements

This topic provides information about enhancements in the Oracle Banking Retail Lending Servicing.

Loan Segments Supported

This topic provides information on the loan segments supported.

- Unsecured Personal Loans
- Secured Personal Loans
- Basic features of Home Loans
- Basic unsecured revolving Line of Credit

Operations

- Monthly Accruals

  Accruals is the process of booking income for various revenue generating components, primarily, interest and fees. Retail lending supports daily accrual frequencies as is used by most lenders and banks for their asset products. An additional accrual frequency is now introduced in the form of monthly accruals. Many of the lenders and banks opt for monthly accruals in order to reduce burden on their technology infrastructure as the accrual processing can then be restricted to a certain pre-configured frequency as compared to daily processing leading to enhanced batch timings.

  Additionally the monthly accrual frequency also facilitates defining:
  - A specific date of the month on which accruals would be processed
  - Day prior to instalment date wherein monthly accruals are processed on the respective instalment date
- Holiday Treatment for Repayment Schedules

  A lender can have multiple branches that could be used for loan disbursements. Each of these branches can have their own calendar which could be different from the other branches. The difference could be on account of certain days marked as local holidays for the branch representing the region in question. Being a holiday, the customers belonging to that branch may not be able to access the branches for transacting on their accounts. Holidays for related functions like clearing houses would further complicate matters leading to unfunded accounts for instalment pay-outs or similar matters that are likely to delay the instalment payments. Holiday treatment, thus, if enabled, offers a choice to the lender in the form of repayment date adjustments wherein the dates can be either preponed or postponed, as configured. Further, the lenders can restrict date adjustments where they are leading to month cross-overs.

  In event of unforeseen circumstances or exigencies, lenders are likely to declare adhoc holidays using the related branch’s holiday calendar. A procedure is introduced to listen to all such requests and adjust the payment schedules for the affected accounts as per the pre-configured holiday treatment.

  This feature is not applicable to billing products and the same is validated.

- Yield Amortization

  Regulations in certain demographics mandate yield accounting for components like interest, fees and expenses. The ask is to initially amortize these components based on straight line and further account for the eventual yield for the loan based on the net present value as the life cycle evolves. Yield accruals are passed along with the accrual frequency so as to adjust the accruals. The adjustment revolves around the effective interest rate that is computed considering the eligible fee and expense components, as applicable to the loan account, depending on their collection from the borrower. Further, events like amendments, prepayments lead to re-computation, as applicable.

  Additionally retail lending now also supports expense accounting and accruals for a particular account for its life-cycle and applicable events.

- Simulation – Waivers

  Retail lending supports component based waivers for Principal, Interest and Fees. As a practice, any transaction in retail lending that has a direct impact on the borrower’s repayment schedule, existing and upcoming dues – are displayed upfront in the form of a simulation transaction so that the bank representative interacting with the borrower has decent information with him so as to engage in meaningful conversations and guide him in an appropriate manner.

  Transactions in the form of amendments and prepayments that impact the repayment schedule are preceded by a simulation request that displays the end result prior to authorizing the transaction. These are transactions that have a direct impact on the principal component thus affecting the repayment schedule.

  A principal waiver implies reduction in the outstanding principal balance thus impacting the repayment schedule. A simulation service is provided to display the impact of principal waivers on the repayment schedule.

- Simulation – Capitalization

  As a practice, any transaction in retail lending that has a direct impact on the borrower’s repayment schedule, existing and upcoming dues – are displayed upfront in the form of a simulation transaction so that the bank representative interacting with the borrower has decent information with him so as to engage in meaningful conversations and guide him in an appropriate manner.

  Transactions in the form of amendments and prepayments that impact the repayment schedule are preceded by a simulation request that displays the end result prior to authorizing the transaction. These are transactions that have a direct impact on the principal component thus affecting the repayment schedule.

  Non-Billing Products - Retail lending supports capitalization of unpaid interest and fees thus having an immediate impact on the outstanding principal balance leading to an equivalent change in the repayment schedule. A simulation service is provided to display the impact of interest and fee capitalization on the repayment schedule accordingly.

  Billing Products - Retail lending supports capitalization of unpaid fees thus having an immediate impact on the outstanding principal balance leading to an equivalent change in the repayment schedule. A simulation service is provided to display the impact of fee capitalization on the repayment schedule accordingly.

- Fee Capitalization- Loan Billing Accounts

  OBRL now supports fee capitalization for billing accounts, enabling lenders to capitalize due but unpaid fees to address exigencies or circumstances in a that may require unpaid fees to be capitalized on a case-by-case basis, providing borrowers with temporary relief to fulfill their obligations.

  Key enhancements for Billing accounts include:
  - Capitalization: Full or partial capitalization of due but unpaid fees, prioritized by oldest arrears; current-dated, including post-maturity.
  - Re-computation: Re-computation basis as “Balloon Payment” is supported when fee is capitalized for Billing accounts.
  - Transaction Support: Reversal of prior transactions without auto-reapplying capitalization is supported for both Billing, Non-Billing accounts.
- Stop Accruals- Catchup Processing- Loan Billing Accounts

  OBRL enhances accrual handling for billing accounts in 'Stop Accrual' status (e.g., 'LOSS'), enabling seamless reprocessing when full or partial payments are received to restore accurate balances and resume accruals.

  Key enhancements include:
  - Event and Status Automation: Status Change service removes accrual event ACCR during 'Stop Accrual'; STCH batch re-inserts them post-payment if status shifts to 'Continue Accrual'.
  - Billing-Specific Catch-Up: Continues bill generation after payments, with automated catch-up accruals for deferred interest, process catch-up bills and process any catch-up payments to apply toward the updated balance.
- Loan against deposits

  Retail lending supports enhanced Loan Against Deposit (LAD) functionality, enabling banks to offer loans secured by deposits.

  Key features include:
  - Direct Deposit Linkage: Ability to link LAD loans directly to one or more deposit accounts without requiring collateral creation.
  - Multi-Deposit Linkage: Support for both DIRECT and COLLATERAL linkage types, allowing association with multiple deposits to secure a single loan.
  - Interest Rate Derivation: Interest pricing based on deposit rate plus configurable margin, using methods such as weighted average, highest, or lowest deposit rate.
  - Lien Management: Automated lien creation, update, and release for linked deposit accounts, with support for full blocking and release on loan payment, closure or rescission.
  - Deposit Replacement and Substitution: Ability to replace an existing linked deposit with another eligible deposit during the loan lifecycle.
  - Enquiry and Reporting: Enhanced enquiry screens to display deposit account details, linkage amount, and lien reference number.
- Enhanced Collateral Management

  This release introduces significant enhancements to collateral management for retail lending, enabling the linkage of multiple collaterals to a loan account and supporting various collateral-related operations throughout the loan lifecycle.

  Key features include:
  - Multiple Collateral Linkage: Ability to link multiple collaterals to a loan account, with support for different collateral types and linkage types (Primary/Secondary).
  - Collateral Utilization: Automatic updating of collateral utilization based on loan disbursements, repayments, and other events, with support for multiple collaterals.
  - Collateral Addition/Modification/Substitution/Release: Ability to add, modify, substitute, or release collaterals during the loan lifecycle, with validations and processing rules to ensure data consistency.
  - Sanction Amount Revision: Support for collateral addition/modification during sanction amount revision (financial amendment).
  - Enquiry and Reporting: Enhanced enquiry and reporting capabilities to display collateral details, linkage amounts, blocked amounts and utilized amounts.

  This feature is applicable to both billing and non-billing accounts, and is designed to work with existing ELCM/Collateral systems. This feature enables enhanced risk management through automated collateral utilization and validation rules and a streamlined processes for collateral addition, modification, substitution, and release.

- Credit Limit Integration for Retail Lending

  The release includes enhancements to support credit limit facilities for retail lending, enabling customers to access flexible credit. The feature integrates with Oracle Banking ELCM (Enterprise Limits and Collateral Management) to manage credit limits and track utilization across the loan lifecycle.

  Key features include:
  - Support for onboarding loan accounts against a credit limit/facility
  - Integration with ELCM for creating and managing credit limits
  - Validation of credit limit availability and utilization during loan disbursement, capitalization, payment, and waiver
  - Support for adding or modifying credit limits during the loan lifecycle
  - Enhanced transaction views to display credit limit linkage and modifications

  The feature provides a more comprehensive and integrated lending solution, enabling lenders to manage credit risk and offer flexible credit facilities to customers.

- Modification of Parties linked to loan

  The feature allows for the modification of parties linked to a loan, including changing the primary borrower, adding/removing/modifying the joint applicants and guarantors. This feature is applicable for both billing and non-billing accounts. The feature includes various validations and processing to ensure data consistency and accuracy. Provides a flexible and efficient way to manage changes to loan parties.

- Right to Rescission

  The Right to Rescission offers a configurable framework that supports borrower cancellation rights during a defined cooling-off period. It allows lenders to set the rescission window and, if exercised within that period, to unwind the loan by reversing financials with full auditability. This global framework complies with U.S. Truth in Lending Act (TILA) Regulation Z requirements.

  Right to Rescission can be configured at policy and product segment levels to reflect regional practices:
  - Period basis: Calendar days or Working days (leveraging branch holiday calendars when using working‑day counts).
  - Start trigger: Product‑segment option to begin the window from Contract Sign, Disclosure Delivery, Account Open/Onboard, or First Disbursement.
  - Disbursement control: Optional bank rule to block disbursement while the window is active. A waiver condition allows processing where permitted by policy.
  Operations
  - Initiate/Complete processing: Authorized users can initiate or complete rescission via OBBRN and secure services. The system validates eligibility (product support, timing within window, settlement details present, no disqualifying servicing events) before proceeding.
  - Automated unwind (RECN event): On initiation, the system reverses disbursement and any booking/ad‑hoc fee recoveries using original value dates, recalculates/reverses accruals. Completion is permitted after reversals are finalized.
  - Event controls during rescission: While rescission is active, the system restricts conflicting actions (payments, financial amendments, rate revision, write‑off, payoff/closure, fee amendments). Allowed actions focus on reversal/settlement (example, disbursement reversal, fee refund/waiver as part of unwind, accrual recalculation). Bills generated prior to rescission are voided; closure proceeds after completion.
- Additional Fields Data support for Account Create API

  Enabled capture and validation of Account-level Additional Fields Data / User Defined Fields (UDFs) during onboarding, with storage and inquiry support, leveraging Common Core Additional Field Maintenance.

  - Account Onboarding (accounts/accountCreate) now accepts an optional additionalFields block to capture UDFs at account creation.
  - UDFs are validated against Core Maintenance → Additional Field Maintenance using Common Core additional-attributes services.
  - When provided and valid, UDFs are stored in OBRLS and returned via Account Details (accounts/accountDetails).
- Line of Credit

  Retail Lending now supports a new product segment/product type as Line of Credit (LOC). This addition expands the platform's capabilities to include flexible, revolving credit products alongside traditional loans.

  A Line of Credit (LOC) is a flexible borrowing product offered by financial institutions, allowing borrowers to access funds up to an approved credit limit on an as-needed basis. Unlike traditional loans, LOCs are revolving, meaning borrowers can draw funds, repay them, and redraw without reapplying. Interest is typically charged only on the outstanding balance.

  In the context of a Line of Credit (LOC), there are typically two types of periods:
  - Draw Period: This is the period during which a customer can borrow money from the line of credit. Customer can draw funds as needed, up to a pre-determined credit limit, and is required to make minimum amount due payments. During this time, interest is calculated on what is borrowed.
  - Repayment Period: After the draw period ends, the repayment period begins. During this time, customer can no longer draw funds from the line of credit, and must repay the outstanding balance, usually through regular instalments that include both principal and interest.

  This release supports a basic unsecured revolving LOC life cycle with a perpetual Draw period only. Lifecycle includes LOC Account Onboarding, Advance draw down, Billing/Payments and closure of an LOC account.

  Below are the features supported on operations side at service layer:
  - Manual Advance processing: The system supports the initiation of manual advances (draws) for Line of Credit (LOC) accounts during the Draw Period within the sanctioned credit limit on an as-needed basis, with support for both Trial (simulation) and Actual (execution) modes.
  - Bill generation, Bill Details Inquiry, Bill Statement, Bill Status Inquiry and Repayment are supported for LOC.
  - In LOC, the billing process is described as below:
    - Bills are generated on Bill Generation date and not on Bill due date.
    - Monthly bills are generated showing Total Outstanding, Minimum Amount Due (MAD), and Total Minimum Amount Due (TMAD). MAD is calculated using the predefined method set during product definition, and TMAD equals the sum of current cycle’s MAD & any unpaid MAD from prior cycles.
    - Interest and Fees have the “Include in Instalment” flag set to Off, since their inclusion is driven by the MAD formula. Fees charged after bill generation are not included in the current bill and are excluded from the appropriation sequence & is due in next bill.

      If Principal is not part of the MAD formula, billed principal is derived as exclusion of billed interest arrears and billed fee arrears from MAD for that bill.

    - Delinquent Due is the sum of unpaid billed principal arrears and billed interest arrears within TMAD.
    - Payments are appropriated by bill order; arrears are applied based on the Longest Overdue flag set as N. A bill is marked paid once its Delinquent Due is fully settled.
  - Adhoc Charges, Transaction Inquiry (Reversal not supported), Balance Inquiry, PayoffQuote up to current due date, Manual account closure are supported for LOC.
  - Events Inquiry, Failed Events Inquiry, Account Details Inquiry are supported for LOC.

Inactive Account Creation

Oracle Banking Retail Lending Servicing (OBRLS) now supports the creation of loan accounts in an “INACTIVE” status. This enhancement enables institutions to onboard accounts prior to activation, with activation possible at a later stage via web service by posting an event. While in “INACTIVE” status, accounts have zero balances and most financial transactions are restricted. A new “INBK” event records the creation of such accounts, and specific parameters and validations have been introduced to govern their activation or closure. This update improves operational flexibility for loan onboarding and lifecycle management.

Note:

Currently, no branch screen available to activate the Inactive account, which will be taken up in subsequent releases.

United States Region - Market Regulatory Support

- UCC – Security Interest in Collateral

  The Uniform Commercial Code (UCC) - Article 9 governs secured transactions in the United States. This feature generates data required for the UCC filing of loans secured by collateral. The system generates data required for filing UCC-1 upon first disbursement of a loan. The data for filing UCC-3 is generated during specific events, such as addition/modification/delink of collateral linked to loan, changes to parties linked to loan and loan closure. Based on the data generated, filing of UCC is to be done by external system.

- Regulation O – Insider Restrictions

  Regulation O governs lending by banks to insiders such as executive officers, directors, principal shareholder on preferential terms more than certain limits. To enable compliance with the regulation, a new service is being provided at loan servicing that will retrieve the overall loan exposure of the party and insiders linked to the party. The origination system can consume this service to evaluate whether the new loan application is breaching the exposure limit.

- SCRA – Recompute Options and Override Rate

  Enhances SCRA servicing with flexible re-computation options and an optional SCRA override rate, aligning SCRA behaviour with interest rate change amendments and improving operational consistency.

  - Recompute Basis options extended to SCRA events (US locale):
    - Activation: Balloon Payment or Recompute Instalment
    - Deactivation: Balloon Payment or Recompute Term
  - Optional SCRA Override Rate at application, capped by Lending Policy SCRA Rate.
  - Backdated processing supported for Activation (and for Deactivation as per policy), with payment reapplication and excess/shortfall handling using existing mechanisms.
- FCRA (Fair Credit Reporting Act) - Risk based Pricing Notice

  The Fair Credit Reporting Act (FCRA) is a U.S. federal law designed to promote the accuracy, fairness, and privacy of consumer information in credit reporting.

  Retail Lending now supports compliance with the Fair Credit Reporting Act (FCRA) requirements for Risk-Based Pricing Notices (RBPN). Under FCRA, if a financial institution uses a consumer credit report to review an existing loan account and takes an adverse action such as increasing the Annual Percentage Rate (APR) -based wholly or partly on that report, it must provide an RBPN to the consumer. The Amendment (VAMI) event in OBRL serves as the key trigger for evaluating rate changes. If Final Rate → Current rate & reason for rate change is Credit Report used, the data needed to generate RBPN notice is stored in the integration schema that can be used to generate report by the reporting system.

- Reg Z

  Oracle Banking Retail Lending (OBRL) now includes enhanced support for Regulation Z (Reg Z) compliance, a key US federal regulation under the Truth in Lending Act (TILA) that mandates transparent disclosures for consumer credit products.

  This release focuses on identifying Reg Z-applicable products and transactions, handling finance charges and APR re-computations on trigger of specific events.
  - Product Identification: Products will be flagged as Reg Z-enabled through a configurable product code mechanism.
  - Transaction Eligibility: Transactions will be evaluated for Reg Z applicability based on loan purpose and amount.
  - Finance Charge Identification: Finance charges will be identified and tracked for APR computation and disclosure.
  - APR Calculations: APR will be computed using the actuarial method and recomputed upon occurrence of specific Reg Z-triggering events.
  - APR History: APR changes will be recorded and made available for inquiry.
- 1099‑C Enhancements (Cancellation of Debt Reporting)

  Introduced a generic, configurable notice/disclosure/reporting framework with a pre‑seeded sample for 1099‑C (US debt cancellation reporting). The framework automates eligibility evaluation, data capture, and report generation through a batch process, and is designed to be extensible for other geographies and report types.

  - Enables automated detection and generation support for debt cancellation reporting based on configured “identifiable events” (pre‑seeded configuration focuses on write‑off scenarios).
  - Supports capture of key 1099‑C data elements for downstream reporting systems (for example: account number, event date, discharged amount, interest component, calendar year, debt description, filing reason code, party and collateral references).
  - Debtor identity and address details are sourced via Party integration (party IDs are provided for downstream retrieval and formatting/masking).
  - Collateral/property information is provided via linked collateral IDs for downstream enrichment.

United Kingdom Region - Market Regulatory Support

- UK APR Support

  Enabled computation and servicing support for UK Annual Percentage Rate (APR) under the Consumer Credit Act (CCA), extending the existing APR framework to a UK variant using XIRR on exact repayment cash flows.

  - New APR computation method "UK_APR" builds on the existing APR framework and supports UK rules (example, total charge for credit, irregular schedules, iterative accuracy).
  - Uses XIRR on amount financed and exact repayment schedule (dates/amounts) rather than unit‑period actuarial inputs; suitable for Retail Loan products such as Unsecured Personal Loans.
  - Integrates into servicing events (schedule generation/amendments) and downstream statements and inquiries.

Parent topic: Release Notes