You are on page 1of 73

T24 Arrangement Architecture -Loans -

T3TAAL - R18 1
AA Loans.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 2
When you run a transaction against an Arrangement, T24 behaves in a different way
from if you had run the transaction against an ordinary T24 account. The system
automatically invokes the appropriate Activity for that transaction.
All T24 financial transactions work against Arrangements, with the exception of the
Sweeps application. AC Cash Pool should be used to implement sweeps instead.
This works through a mapping between the T24 transactions and the AA Activities.
Depending on the transaction code you enter, it will know which AA activity you
intend to run.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 3
Let us now select a product that has chargeoff conditions defined in it.
We will select an arrangement under this product with some accrued interest or bills
available

Upon performing a backdated chargeoff, the balance changes would be triggered.

Let us compare the balances before and after the chargeoff and discuss the results.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 4
We have now selected the mortgage loan and an arrangement under that product
that is “current” status.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 5
This arrangement is disbursed and CURACCOUNT has a value $30000. The accrual is
$110.96

T24 Arrangement Architecture -Loans -


T3TAAL - R18 6
Charge off activity performed on arrangement selected and authorised.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 7
The activity to trigger chargeoff is used and the effective date is lesser than the
current system date.
The transaction amount in the activity is positive. Here we have charged off $15,000.
Now we can find balances updated under charge off.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 8
Select a Deposit arrangement
Input a fully negotiable loan inline with the Linked arrangement as Deposit
arrangement with a margin on the deposit interest
View the arrangements for the tracking information updated.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 9
Select a Deposit arrangement from list the deposits that is funded and current status.

T24 Arrangement Architecture -Deposits -


T3TAAD - R18 10
Create a fully negotiable loan with amount similar to the deposit arrangement.

T24 Arrangement Architecture -Deposits -


T3TAAD - R18 11
Set up the principal interest linked to the deposit arrangement using fields : Spread
set to YES, Linked Arrangement and Linked property
In this case the margin of 0.5 is added on top of the deposit interest for the loan
arrangement.

The loan is setup for auto disbursal and settlement account is setup only for
disbursement in this case.

T24 Arrangement Architecture -Deposits -


T3TAAD - R18 12
Upon authorisation we can find the loan arrangement contains the information of the
deposit arrangement as tracked for interest rate
The deposit arrangement contains the information of the arrangement that has
tracked rates and used this as source arrangement.

T24 Arrangement Architecture -Deposits -


T3TAAD - R18 13
Select a Deposit arrangement from list the deposits that is funded and current status.

T24 Arrangement Architecture -Deposits -


T3TAAD - R18 14
The AA account balances can be reported separately using category and other
attributes of AA.ACCOUNT.DETAILS.
To track the reporting changes for the AA contracts to be reported based on the
details from REPORT.END.DATE field in AA.ACCOUNT.DETAILS, CONSOLIDATE.COND
accepts fields from AA.ACCOUNT.DETAILS. Consol key would be built based on the
values from the fields in AA.ACCOUNT.DETAILS which contains the value date, Report
End Date and arrangement overdue status .
While forming the Consol Key, the AA.ACCOUNT.DETAILS record id has to be passed
along with account id so that the system would read this record and forms the consol
key.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 15
While the Asset Types of other T24 applications are hard coded, in AA the types of
AC.BALANCE.TYPE will be used as Asset types for consolidation. They can be used
while designing financial reports.

You can see that the Asset Types for AA Current Principal will be CURACCOUNT and
for Current Commitment, it will be CURCOMMITMENT. These have been defined in
AC.BALANCE.TYPE.

In case of other T24 applications, the asset types for interest and charges accrual
balances are automatically taken by the system as the contra P&L Category to which
the P&L has been accounted to.

In case of AA, the user specified PL related balance types such as ACCLOANINT (for
accrued LOANINT Property Balance) will be used.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 16
It is possible to issue Customer statements / passbooks for arrangements
Statement setup can be configured through Statement property class. Please refer to
ELearning Statement property class for further details.
The statement entries raised for the Arrangements are updated with the Narratives
from the Transaction code of the transaction which is triggered through the
Arrangement Activity. When Accounting entries are raised for an AA Account, Soft
Accounting picks up the description from the TRANSACTION table and maps them to
narrative. Narrative updations in statement entries for Arrangements are handled by
Soft Accounting with the help of setup done in AC.POSTING.DETAILS file. To get the
appropriate narrative description, ENTRY.VALUE multi-value field in the
AC.POSTING.DETAIL file to be set with the options like PROPERTY, ACTIVITY, and
ARRANGEMENT.ACTIVITY. Based on these options, the Narratives in the Accounting
entries will be updated with the Property / Activity / Arrangement Activity names and
their descriptions. To achieve the same the VALUE.SOURCE field should be set as
EVENT.
A new field NARRATIVE is introduced in the AA Arrangement Activity table (AAA) to
write further description for the triggered activity. It would be used mainly for Ad hoc
Charges. This narrative is in addition to the Property description.
This gives a clear picture of the purpose of the Activity and also helps the end user as
well as the Bank to identify/consolidate the same.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 17
AA generates accounting movements to move from one balance to another (e.g. to
move from the current balance to the due balance on a repayment date). From an
accounting perspective these movements are confusing to a customer, hence need to
be masked in statements / passbooks.
Possible to mask a set of Stmt entries from Enquiry or Statement printing, if flag
MASK.PRINT is set in the Stmt.Entry record.
The entries generated to make Payments due will not be changed, but these entries
will not appear in the Customer statement.
AC.ALLOCATION.RULE is used to identify which set of entries should be masked for
Statement printing: Field MASK, if set to ‘YES’ for both the Mvmt & Target entries
(default is blank), system then sets the MASK.PRINT flag in the STMT.ENTRY. This is a
part of the multi-value fields associated with Event.Type in AC.ALLOCATION.RULE.
Although the internal entries will be generated, they will not appear in the Customer
statement or related enquiry.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 18
Enquiries on AA Arrangements are part of every Arrangement record.
Balance Enquiry will display the commitment amount, current principal, due
principal, charges due, ad hoc payments unspecified credits, etc.
Activity Log (AA.ACTIVITY.HISTORY) will display all Activities that have been executed
for an Arrangement in date and sequence order; provides access to the Arrangement
Activity record to view the Activity details and the Arrangement Conditions at the
point when the Activity was launched.
Each Activity performed on an arrangement is effective dated and stored in T24 in the
sequence of activities, with links to any financial transactions (e.g. disbursements,
repayments, etc.), when it was performed, how many times was it performed etc.
The users can view multiple versions of the activity viz Financial, User Initiated,
System Initiated and Future activities. Future activities will be shown in the same logs
but will have their date in a different format (e.g. italics) to note that the activity has
not yet taken place.
Activities like accruals with NOLOG attributes are not recorded in
AA.ACTIVITY.HISTORY.
Bills enquiry is used to view due dates of bills, activity type, amount, whether paid or
not status, Days past due (DPD) ie: Number of days by which each bill has moved to
the Overdue status

T24 Arrangement Architecture -Loans -


T3TAAL - R18 19
Charges enquiry can be viewed by payment date (By Date) and by Charge property
(By Type). It displays the charges enquiry by payment date, type, default amount,
waived amount if any, final amount and the outstanding amount.
Associated Messages for activities are generated in AA. These messages could be
viewed through Messages Enquiry. Further drilling down will display the full details of
the message.
Payment Schedule generated based on product conditions could be seen under this
enquiry.
Interest details enquiry will display the interest details, such as interest scheduled
date, interest rate, interest days, amount of interest and principal on which interest is
calculated, etc.
The Arrangement Overview screen under the section “Account Details” shows a
“Maturity Date” if Null has not been specified at the arrangement level. The
“Renewal Date” is still shown as a theoretical maturity date as determined by the
values in change product.
AA.OVERDUE.STATS is used to record relevant information to any overdue status the
arrangement has reached through its current life cycle for analysis purpose. It records
the required information like number of times the arrangement reached a certain
Overdue status, total number of days at each Overdue status, average amount and
the dates in which funds have moved into and out of a particular aging status.

Also displays the Limit and Collateral information of the customer and retrieves the

T24 Arrangement Architecture -Loans -


T3TAAL - R18 20
Arrangement records based on the Limit IDs under Limit and Collateral Tab. In the
Arrangement overview screen under the Basic tab, the Limit property conditions
shows the Limit Reference number, single limit and Allow netting using the data taken
from AA.ARR.LIMIT and the Collateral details. The drilldown icon opens the limit
record from the LIMIT application

T24 Arrangement Architecture -Loans -


T3TAAL - R18 20
Arrangement Enquiries

T24 Arrangement Architecture -Loans -


T3TAAL - R18 21
In this workshop, we are going to select the existing arrangement created and view
the Balances

T24 Arrangement Architecture -Loans -


T3TAAL - R16 22
select the existing arrangement created and view the Balances and messages.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 23
select the existing arrangement created and view the bills, changes and overdue
details.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 24
T24 Arrangement Architecture -Loans -
T3TAAL - R18 25
T24 Arrangement Architecture -Loans -
T3TAAL - R18 26
T24 Arrangement Architecture -Loans -
T3TAAL - R18 27
T24 Arrangement Architecture -Loans -
T3TAAL - R18 28
T24 Arrangement Architecture -Loans -
T3TAAL - R18 29
Based on segmenting customers into groups and determining the profitability of the
customer

A customer segmentation allows you to drive sales force behavior strategically and
increase the overall profitability and sustainability of the business by creating a
customer hierarchy and focusing on specific groups.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 30
Channel Pricing is a strategy for Product variation.
It allows financial institutions to offer a version of an existing product with a different
pricing by restricting the channels that a customer can use to maintain or transact
with their account.
The most common example of this is Internet only products.
The requirements for Channel Pricing differ from Relationship Pricing, as the pricing
normally depends on which channel the customer chooses to use for a particular
product rather than a customer’s relationship with the bank.
Remember: It is possible to define that relationship pricing is applicable to all, only
some or no product variants.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 31
Preferential pricing offers clients better prices or rates on all or part of their business.
For example, a bank could offer a client preferential pricing – a higher rate on
Deposits or a lower interest rate on loans, if the client uses more of its products or
services.
Preferential pricing refers to the use of any of the available methods (i.e. Product
Variations, Relationship Pricing and Promotional Pricing) to provide customers with
interest rates and/or charges, which are better than the standard product.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 32
Variations in product can be achieved based on a eligibility Check. We have already
seen that Eligibility is variation specific property class and product condition can be
defined for every variation.
Channel Pricing, Customer Segment Pricing, Preferential Pricing can be achieved by
defining eligibility criteria for the customer to get the special features.
This can be subsidized interest or charges.

If one or more variations are specified for a particular property, the proofing
mechanism will check whether conditions for those variations exist for that Property.
If not and error will be raised.
In the case of ELIGIBILITY, all variations specified at the Product level must exist and
be specified at the Property level.
If a product has been defined as multi currency, then a currency specific property
with a variation (e.g. internet) must have that variation defined for every currency.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 33
The eligibility rules are evaluated at the Product Catalog level during new
arrangement creation.
AA evaluates the eligibility criteria of each variation (e.g. senior, staff, child) in the
priority order specified and uses the first variation for which the customer is eligible.
If the customer is not eligible for any of the variations or the default (if specified) then
the Product will not appear in the customer specific version of the Product Catalog.
The user can open a variation manually, if the eligibility criteria have been set to raise
an Override as opposed to an error.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 34
When triggered by either a static change or on a period (depending on the condition
of the currently applicable eligibility) the system will again check the eligibility of each
variation in order to determine which one the customer is best suited for.
If they are eligible for a higher priority variation (i.e. an upgrade) then AA will trigger a
“Change Variation” activity namely : ACCOUNTS-CHANGE.VARIATION-ARRANGEMENT,
DEPOSITS-CHANGE.VARIATION-ARRANGEMENT, LENDING-CHANGE.VARIATION-
ARRANGEMENT, RELATIONSHIP.PRICING-CHANGE.VARIATION-ARRANGEMENT
and the conditions will change based upon the “reset” setting of each property.
If they are not eligible for an upgrade but they are still eligible for the current
variation then no further action is required.
If they need to be downgraded then AA will trigger a “Change Variation” activity to
downgrade their conditions based upon the “reset” settings.
Finally, if they are not available for any variation or the default, then for financial
arrangements AA will follow the existing rules that will change the product itself to a
specified product without eligibility rules. In the case of a Relationship Pricing
arrangement a new option (described later) will automatically close the arrangement.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 35
 Create Interest product condition in USD currency
for

 Staff variation created – fixed rate of 7%


 Foreign variation created – fixed rate of
6.75%
 No variation – fixed rate of 6%

 Indicate a tier type as single and Accrual Rule as


FIRST along with Interest day basis “B”
 Attributes are negotiable by default

T24 Arrangement Architecture -Loans -


T3TAAL - R18 36
View the rules in EB.RULES.VERSION for staff customers and resident
customers.

Create variations for STAFF and FOREIGN in EB.LOOKUP

T24 Arrangement Architecture -Loans -


T3TAAL - R18 37
Interest product condition in USD currency for

 Staff variation created – fixed rate of 7%


 Foreign variation created – fixed rate of
6.75%
 No variation – fixed rate of 6%

T24 Arrangement Architecture -Loans -


T3TAAL - R18 38
Create an Eligibility product conditions record similar to earlier one.
Set up the default product as the product created earlier

T24 Arrangement Architecture -Loans -


T3TAAL - R18 39
Create an Eligibility product conditions record similar to earlier one.
Set up the default product as the product created earlier

T24 Arrangement Architecture -Loans -


T3TAAL - R18 40
Create a child product to the default product with two variations for interest and
eligibility for them

T24 Arrangement Architecture -Loans -


T3TAAL - R18 41
Create a child product to the default product with two variations for interest and
eligibility for them

T24 Arrangement Architecture -Loans -


T3TAAL - R16 42
Create a child product to the earlier product with two variations for interest and
eligibility for them

T24 Arrangement Architecture -Loans -


T3TAAL - R16 43
Create Arrangement under each eligibility condition
View the variations and the interest defaulted as per the variation.

List the customer records that are of the staff sector. Create an arrangement with one
of those customers and view the variation chosen by the system and the related
interest defaulted

List the customer records that are non resident. . Create an arrangement with one of
those customers and view the variation chosen by the system and the related interest
defaulted

List the customer records that are non resident and also staff sector. Create an
arrangement with one of those customers and view the variation chosen by the
system and the related interest defaulted.

List the customer that do not match any of the criteria. Create an arrangement for the
customer - view the result

T24 Arrangement Architecture -Loans -


T3TAAL - R18 44
List the customer records that are of the staff sector. Create an arrangement with one
of those customers and view the variation chosen by the system and the related
interest defaulted

T24 Arrangement Architecture -Loans -


T3TAAL - R18 45
List the customer records that are non resident. . Create an arrangement with one of
those customers and view the variation chosen by the system and the related interest
defaulted

T24 Arrangement Architecture -Loans -


T3TAAL - R18 46
List the customer records that are non resident and also staff sector. Create an
arrangement with one of those customers and view the variation chosen by the
system and the related interest defaulted.
Now we understand the significance of priority given.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 47
List the customer that do not match any of the criteria. Create an arrangement for the
customer - view the result

T24 Arrangement Architecture -Loans -


T3TAAL - R18 48
T24 Arrangement Architecture -Loans -
T3TAAL - R18 49
T24 Arrangement Architecture -Loans -
T3TAAL - R18 50
T24 Arrangement Architecture -Loans -
T3TAAL - R18 51
T24 Arrangement Architecture -Loans -
T3TAAL - R18 52
View the Allocation Rule and Posting Details

T24 Arrangement Architecture -Loans -


T3TAAL - R18 53
View the allocation rules.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 54
In this workshop, we are viewing the EVENT TYPES , MVMT.TARGET, OPP.TARGET,
MVMT.CR.TXN in the DEBIT-CHARGE Allocation rule.

T24 Arrangement Architecture -Loans -


T3TAAL - R15 55
View the POSTING.DETAILS for CATEG-AA

T24 Arrangement Architecture -Loans -


T3TAAL - R15 56
And SPECIAL-AA, STMT-AA

T24 Arrangement Architecture -Loans -


T3TAAL - R15 57
Create New CHARGE Property with type set as Suspend

T24 Arrangement Architecture -Loans -


T3TAAL - R18 58
In this workshop, we are going to create a New Charge property with type set as
Suspend

T24 Arrangement Architecture -Loans -


T3TAAL - R15 59
Create Balance types, Allocation Rules for the Charge property created and create a
new Accounting product condition to attach the new charge property with the
allocation rules.

T24 Arrangement Architecture -Loans -


T3TAAL - R18 60
In this Workshop, we are going to create Balance Types for the Charge property
created

T24 Arrangement Architecture -Loans -


T3TAAL - R15 61
We are going to create Balance Types for the Charge property created

T24 Arrangement Architecture -Loans -


T3TAAL - R15 62
•Create a new Allocation Rule for the new CHARGE property (You can copy
Accounting Allocation Rule “DEBIT-CHARGE” and change the P&LCategory
retaining other details)

T24 Arrangement Architecture -Loans -


T3TAAL - R15 63
Create a new Product Condition and assign the above rule to your CHARGE property
(Copy the existing Product condition and replace the new allocation rule to your
CHARGE property)

T24 Arrangement Architecture -Loans -


T3TAAL - R15 64
Attaching the New Charge to the Product Group and Product

T24 Arrangement Architecture -Loans -


T3TAAL - R18 65
In this workshop, we are going to
• Open our Product Group created earlier and
• Add the CHARGE property to Charge Property Class
• Rebuild the Product Group

T24 Arrangement Architecture -Loans -


T3TAAL - R18 66
•Open the Product which we have created and add a product condition to
new CHARGE property added in the Product group
• Replace the existing product condition for ACCOUNTING Property with the
new one you have created

T24 Arrangement Architecture -Loans -


T3TAAL - R18 67
Proof

T24 Arrangement Architecture -Loans -


T3TAAL - R18 68
and Publish the Product

T24 Arrangement Architecture -Loans -


T3TAAL - R18 69
T24 Arrangement Architecture -Loans -
T3TAAL - R18 70
You have learnt in this Learning Unit, about the accounting flow in AA, how soft
accounting has been implemented, and Accounting Property Class.

You will now be able to:


1. Lending Product Line and Property Classes
2. Setting parameter tables, create Property and Product conditions for
Lending Product Line
3. Creating Lending Product Group and Product, proof and publishing the
product
4. Lending activities, Simulation, Reverse and Replay
5. Balance Types and move balances, suspending arrangements
6. Accounting flow in AA
7. Using enquiries relevant to this module

T24 Arrangement Architecture -Loans -


T3TAAL - R18 71
T24 Arrangement Architecture -Loans -
T3TAAL - R18 72

You might also like