T24 Miscellaneous Deals

TEMENOS EDUCATION CENTRE

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Objective

 Overview of Miscellaneous Deals Module

 Linkages between MD module and T24 Core and other applications

 Dependencies and parameter tables to be set up

 Main business features of MD module

 Accounting, messaging and enquiries

Slide 2
MD – Product overview

MD
Contingent /
Contingent / Memorandum
Memorandum
Liabilities
Assets

Increases

Decreases

Single participant
Guarantees Asset
Liability
Netted
Multi participant
Guarantees
Asset Participation
Liability taken
NOT
Receiving Invocation Netted Paying
Commission Commission

Slide 3
MD Dependencies – Product related

 MD is designed to handle any miscellaneous deals broadly classified

as Contingent Assets and Liabilities and Memorandum Assets and
Liabilities
 Suggested category code range is 28000 – 28999 for guarantees issued
and received

 User defined descriptions to group the deals and ranges of category

codes for each deal sub type is defined in MD.PARAMTER
 Contingent Assets - 28000 to 28099
Bid bond issued - 28005 to 28009
Performance bond issued - 28010 to 28014
 Once authorised, the ranges cannot be modified in MD.PARAMETER

Slide 4
MD Dependencies – Product related

 Category of a MD could be changed after authorisation but within the

range meant for the deal sub type

 MD also uses P & L category codes indicated in MD.PARAMETER for

accrual of charges and commission

Slide 5
MD Dependencies – Settlement related

 No standard settlement rules for accounts in MD application, but default

values obtained
 While taking provision, if account number of Customer or Nostro is not input
for PROV.CR.ACCOUNT Field, then internal account mentioned in
MD.PARAMETER gets defaulted
 For releasing provision, value in PROV.REL.ACCOUNT Field gets default
value from PROV.DR.ACCOUNT Field
 While invoking, value in INV.DR.ACCOUNT Field gets default value from
PROV.REL.ACCOUNT Field, if provision is held
 If payment method is indicated as Nostro in Drawings, then Payment
account is defaulted using NOSTRO.ACCOUNT Field for the payment
currency

Slide 6
Application specific Parameters

Slide 7
MD - Parameter Tables

 The Parameter tables to be set-up during implementation are:

 MD.PARAMETER

 MD.CLAUSES

 MD.TXN.TYPE.CONDITION

 APPL.GEN.CONDITION

 MD.GROUP.CONDITION

Slide 8
MD.PARAMETER

 Company level parameters for processing MD

 Id is Company code

 Supports 4 broad contract types of miscellaneous deals

 CA and CL, Contingent Asset and Contingent Liability
Used for commitments like Guarantees issued, received
 MA and ML, Memorandum Asset and Memorandum Liability
Used for softer options like Guarantees issued on behalf of another bank

 Separate rules for limit checking could be set for them

 Mandatory, Optional and No input choices available in Fields
CONT.LIMIT.LINK, MEMO.LIMIT.LINK, CL.LIMIT.LINK and ML.LIMIT.LINK
Complete flexibility available to classify miscellaneous deals into asset
and liability products and further into those requiring limit checking.
Choosing None is same as choosing Optional in respect of
CL.LIMIT.LINK Field and ML.LIMIT.LINK Field

Slide 9
MD.PARAMETER

 Separate category code ranges can be set for these four types

 Respective PL category codes for accrual of time based commission can be

set up in CURRENT.ACCRUAL, PREVIOUS.MONTH and
PREVIOUS.YEAR Fields
NEW.CURRENT Field can be used to change value in
CURRENT.ACCRUAL Field. Should not be input during initial build

 ACCRUAL.CYCLE Field defines the accrual cycle for accruing time based
commission
Can be set at frequency of daily, weekly or monthly
DAILY or BSNSS or WEEK1 to WEEK9 or M01 to M12

Slide 10
MD.PARAMETER

 Deal sub types

 User definable deal sub types under any of the four valid types can be input
in Field DEAL.SUB.TYP (Upto 5 alpha numeric)
BBOND for Bid Bond, SHGTE for Shipping Guarantee
 Start and end category code range for each of these sub types to be
indicated in SUB.CAT.STRT and SUB.CAT.END Fields
These category codes should be within the range meant for the respective
contract type

 Events processing
 Could be set as “Online” or “End of day” in EVENTS.PROCESSING Field
If set to End of day, limit updating for decreases and accounting entries
for changes to principal done only during close of business

 Commission and charge schedules can be processed either at SOD or

EOD of the scheduled date
 This can be either at parameter level or at contract level

Slide 11
MD.PARAMETER

 Maturity related

 Even after expiry, a guarantee could be kept in the live file

For instance, till the original guarantee is received on hand

 EXPIRY.MODE Field has two options Manual and Automatic

 If set to Manual, guarantee will continue to be in live file even after maturity
and has become null and void
This choice is defaulted to MD record, but could be changed

 When set to Automatic, on maturity, the record moves to history after the
days mentioned in DAYS.POST.MAT Field
1 to 999 Working or Calendar days can be mentioned - NW / NC

Slide 12
MD.PARAMETER

 Provision related
 Impact on Limit could be set to be less provision amount taken, if any, by
setting Yes in INCLUDE.PROVISION Field
If set to No or Null, impact on limit will be for the full guaranteed amount
 Provision could be credited to an internal account
Category code used to default an internal account when a customer
account is not input as Credit provision account is mentioned in
PROV.CATEGORY Field

 Transaction codes
 Crediting and debiting provision amounts in TR.PROV.CODE.CR and
TR.PROV.CODE.DR Fields
 Paying and receiving time based commission in CSN.PAY.TXN.CODE and
CSN.REC.TXN.CODE Fields
 Crediting and debiting during invocation in TR.INV.CODE.DR and
TR.INV.CODE.CR Fields

Slide 13
MD.PARAMETER

 Participant’s share in commission could be temporarily parked in

internal account with category code defined in PART.CSN.ACC Field

 Soft delivery related

 Option to continue with old delivery set up to be indicated in
BACKWARD.DELIVERY Field with value Yes
For new implementations, this should be set as NO
 MD.CLASS.TYPE and EB.CLASS.TYPE multi value Fields are necessary
for soft delivery set up
Recommended that values be defined during initial system build so that
secondary build stage can take care of soft delivery
To enable viewing Preview messages in soft delivery, in PGM.FILE, for
the record MD.DEAL, in the Field ADDITIONAL.INFO, “PREVIEW”
should be input

 Rounding rules for conversion is standard by default

 Other methods as defined in EB.ROUNDING.RULE can be attached to
ROUND.TYPE Field

Slide 14
MD.CLAUSES

 Standard conditions required for different guarantees are stored in this

table

 To reduce the input time while inputting a guarantee, the Id of this

record can be input and committed in multi value field GTEE.DETAILS
in the MD to get the clauses text defaulted

 Id can be up to 6 Alpha numeric characters

 Full description can be recorded in the multi value field DESCR

Slide 15
MD.TXN.TYPE.CONDITION

 For each deal sub type defined in MD.PARAMETER,

MD.TXN.TYPE.CONTION table can be used to default values at MD
level
 PROVISION.PERCENT Field to default Provision to be taken when
PROVISION Field is set to YES in MD.DEAL

 For time based commission, we can set up minimum amount to be

collected currency wise or as local currency equivalent
 CURRENCY and MIN.COMM.AMT Fields to indicate currency wise
minimum commission
 MIN.COMM.AMT.LCCY Field to indicate local currency equivalent of
minimum commission when currency wise is not available

Slide 16
MD.TXN.TYPE.CONDITION

 Time based commission, we can set up minimum tenure

 MIN.COMM.TENURE Field to indicate the minimum tenure represented in
days for which commission is to be calculated

 To ensure that a minimum amount of commission is recovered for any

Deal, MIN.COMM.AMT and MIN.COMM.TENURE Fields are used
together

 Percentage of commission for any Category under a DEAL.SUB.TYPE

can be defined and that will be defaulted in the Deal
 This definition of commission percentage becomes mandatory if
MD.CSN.RATE.CHANGE Field is to be invoked

Slide 17
Preferential Grouping

 APPL.GEN.CONDITION with Id as MD.DEAL can be used to form

groups for setting preferential conditions
 Grouping could be based on either a Field defined in
STANDARD.SELECTION record for the application or a local subroutine
name
 We can form a group of people residing in US as follows
CONTRACT.GRP called USRES with RESIDENCE EQ US

 MD.GROUP.CONDITION with Id as the valid group created in

APPL.GEN.CONDITION or customer Number indicated as C-NNNNNN
can be set up to create default conditions regarding provision to be
taken
 Deal sub type wise, Category wise, Provision percentage
 Debit and Credit provision accounts

Slide 18
MD Build sequence

1. APPL.GEN.CONDITION Mandatory *

Optional

2. MD.CLAUSES

3. MD.PARAMETER*

4. MD.TXN.TYPE.CONDITION MD.PARAMETER
(Deal sub type)

MD.PARAMETER
5. MD.GROUP.CONDITION (Deal sub type)

APPL.GEN.CONDITION

Slide 19
MD – Product features

Slide 20
Product features – Products handled

 Guarantees issued
Singly, without any participation
With other participants – multi participant guarantees
 Performance guarantees
To secure some performance of the Principal Debtor
Bid Bond (Tender Bond), Performance Bond
 Financial guarantees
To secure repayment of a loan or debt incurred by the Principal Debtor
Advance Payment (letter of indemnity), Payment guarantee in case of non
payment

 Handling invocation of guarantees issued

 Guarantees received

 Any other contingent asset or liability can also be recorded

Slide 21
MD.DEAL

 Used to book any non-funded transaction (contingents) as firm

commitment or softer option as memorandum type
 Guarantee, Line of credit

 Scheduled increases and decreases in deal amount and provision can

be registered

 Flat charges can be collected using FT.COMMISSION.TYPE

 Can be collected in any currency

 Time based commission similar to interest can be collected

 Can be collected in any currency which is different from deal currency
 CONVERSION.TYPE Field will be used for defining exchange rate

Slide 22
MD.DEAL – Basic elements

 Mandatory Fields
 CUSTOMER
For guarantees issued, Customer on whose behalf it was issued
For guarantees received, Customer who issued it

 CURRENCY, PRINCIPAL.AMOUNT, DEAL.DATE & VALUE.DATE

Change in Principal only through scheduling increase or decrease

 MATURITY.DATE
Fixed or Call or Notice allowed

 CONTRACT.TYPE, DEAL.SUB.TYPE & CATEGORY

Category change allowed but should correspond to Deal sub type

 ADVICE.REQD and EVENTS.PROCESSING

Option available to produce or suppress advices

Slide 23
MD.DEAL – Basic elements

 Other Important fields:

 ALTERNATE.ID - Option to have another serial number different from the
system generated number
Take care to map either this Field or Id Field, as need be, for delivery
messages through DE.MAPPING
 FURTHER.ID - Further identification of a delivery message (Tag 23 of MT
760)
ISSUE - When the message is an Issue of Guarantee
REQUEST - When the message is requesting an issuance of a
Guarantee
 APPLICABLE.RULE and NARRATIVE (Tag 40 C of MT 760)
4 choices to indicate the applicable rule while Issuing or requesting to
issue another bank - ISPR, NONE, OTHR, URDG. If OTHR is chosen,
Then NARRATIVE Field is mandatory to indicate rules governing the
guarantee
 AMENDMENT.NO - Input of amendment number resets GTEE.DETAILS
and SENDER.INFO Fields to enable communicating amendment details
This Field is populated in Tag 26E of MT 767

Slide 24
Product features - Provision

 Provision can be in any currency and even exceed Guarantee value

 Provision percentage calculated on Principal as on date

 Can be kept in an internal account or customer account with or without

interest

 Limit can be impacted after taking Provision into account or without by

setting INCLUDE.PROVISION Field to Yes or No

Slide 25
Product features - Provision

 For taking provision online, set PROVISION Field to Yes

 Other relevant Fields are PROV.DR.ACCOUNT, PROV.CR.ACCOUNT and
PROV.PERCENT / PROV.AMOUNT

 For release during COB, set RELEASE.PROVISION Field to Yes

 Other relevant Fields are PROV.REL.DATE, PROV.REL.ACCOUNT and
RELEASE.AMT

Slide 26
Workshop - 1

 Use User Menu > Corporate Operations > Guarantees > Guarantees
Issued > Issue of Guarantees > Issue of Bid Bond
 On behalf of your another customer, request Allied Irish Bank (Customer Id:
100427) to issue a Bid Bond for USD 60,000 which is valid for 3 months
from date in favour of M/s.ABC Ltd, Ireland
 Guarantee covered under ISPR rules of ICC
 Choose Delivery mode as SWIFT
 Look at the delivery messages through delivery preview and get the record
authorised

 Use User Menu > Corporate Operations > Guarantees > Accounting
Entries > View Authorised Entries
 Look at the accounting entries and drill down to see the records

Slide 27
Workshop – 1 Solution

Slide 28
Workshop – 1 Solution

Slide 29
Workshop – 1 Solution

Slide 30
Workshop – 1 Solution

Slide 31
Workshop – 1 Solution

Slide 32
Product features – Changes to Principal

 Possible to effect scheduled and unscheduled changes to principal

 Scheduled increases and decreases can be done while inputting the deal
itself. Later changes can be done through amendments
 System will update principal amount during COB of event date

 Future increases, accounting entry is passed as forward contingent

 If limit update is required

 limit affected on line for initial principal amount + all scheduled future
increases
 limit impact for future decreases done at COB of event date

Slide 33
Product features – Provision default order

 MD.TXN.TYPE.CONDITION
 Deal sub type wise default conditions for Provision percent and time based
commission

 MD.GROUP.CONDITION for group

 For groups formed through APPL.GEN.CONDITION Deal sub type wise,
Category wise Provision percent
 Takes precedence over MD.TXN.TYPE.CONDITION

 MD.GROUP.CONDITION for individual customer

 Record set with Id C-XXXXXX
 Can mention Provision debit and credit accounts also
 Takes precedence over MD.GROUP.CONDITION for group

Slide 34
Product features – Provision and Principal movement

 Provision can be taken or released during Principal movements

 Additional provision for principal increase and release during principal
decrease possible
 Provision can be scheduled along with forward principal movement using
associated multi value Field PROV.AMT
 Release of outstanding provision can be
system dated or at a future date
scheduled with principal movements using multi value Field REL.AMT

 If provision percentage is mentioned and scheduling Fields left blank,

system defaults provision taking and release amounts in line with
provision percentage
 User can input different amounts not necessarily in line with original
percentage

 System maintained table MD.PROV.BALANCES gives details of

movements in Provision that have happened so far

Slide 35
Product features – Flat Charges collection

 Non-time based charges are one time and not linked to guarantee
period

 Collected on Principal outstanding while inputting a deal

 FT.COMMISSION.TYPE record Id used in Field CHARGE.CODE
 Multiple charges in different currencies can be collected through
CHARGE.ACCOUNT Field of respective currencies
 On line or scheduled for future dates
 With or without tax as defined in FT.COMMISSION.TYPE

 System maintains MD.BALANCES with full history of deals, charges

collected and scheduled and also invocation details

Slide 36
Workshop - 2

 Use User Menu > Corporate Operations > Guarantees > Guarantees
Issued > Issue of Guarantee > Issue of Performance Bond
 Issue a rental bond for USD 25,000 on behalf of your customer for 6 months
 Beneficiary is another customer of your bank
 Collect as flat charges the following
 Collect FT.COMMISSION.TYPE - GTEEISSUE – USD 250.00 from
customer’s USD account today
 Collect charges – GTEEADVIS - GBP 50 after 3 months customer’s GBP
account
 Commit the record and get the record authorised

 Use User Menu > Corporate Operations > Guarantees > Accounting
entries > View Authorised entries
 Look at the accounting entries
 Look at system maintained MD.BALANCES using command line

Slide 37
Workshop – 2 Solution

Slide 38
Workshop – 2 Solution

Slide 39
Workshop – 2 Solution

Slide 40
Product features – Time based commission

 While inputting a guarantee, Commission (CSN) can be collected or

paid depending on whether defined as Asset (CA / MA) or Liability (CL /
ML)
 As a fixed amount or as a percentage of principal amount and according to
tenor, like interest

 Can be collected / paid

 As a rate and a spread over that
 Only in deal currency but can be collected from different accounts on
different dates
 At a determined frequency or scheduled for specific dates
 At the beginning or at end (in advance or in arrears)

 Collection / payment, accrual and capitalisation at COB

Slide 41
Product features – Commission

 Commission on MD deals can be amortised or accrued over a period of

time by suitably defining in FT.COMMISSION.TYPE (Data stored in
EB.ACCRUAL)

 Commission accruals can be calculated by including the first or last or

both days of accrual period
 A pre-defined record in EB.ACCRUAL.PARAM application could be
indicated
Possible to define records here to include first day, last day or both
By setting “Yes” to INCLUDE.START.DATE and LAST.DAY.INCLUSIVE,
commission will be calculated for both days
If no record exist in EB.ACCRUAL.PARAM, commission will be calculated
for the first day only

 If ACCR.REV.PARAM is defined, then the system will reverse the

accruals till the previous day and will accrue the amount till the system
date

Slide 42
Product features – CSN options

CSN.PAYMENT.TYPE
INTEREST.BASIS
Begin or End

FIXED.AMOUNT FIXED.AMOUNT
Yes No

CSN.RATE
CSN.AMOUNT
CSN.SPREAD

CSN.FREQUENCY CSN.DATE

BACK.FORWARD.KEY
1 Calendar day CSN.ACCOUNT
2 Next working day CSN.ACCOUNT CSN.ACCOUNT
3 Previous working day
CSN.ACCOUNT
CAPITALIZE.DATE
(For CSN.PAYMENT.TYPE End)
After maturity date

Slide 43
Product features - Setting conditions for CSN

 In MD.TXN.TYPE.CONDITION, in addition to setting provision

percentage for a Deal sub type, we can also set up conditions
regarding commission
 Minimum amount to be collected currency wise or as local currency
equivalent
 Minimum tenure for which commission is to be calculated

 To ensure that a minimum amount of commission is recovered for any

Deal, minimum amount and tenure are used together

 Percentage of commission for any CATEGORY under a

DEAL.SUB.TYPE can be defined and that will be defaulted in the Deal
 Definition of commission percentage becomes mandatory if
MD.CSN.RATE.CHANGE is to be invoked

Slide 44
Product features – CSN rate changes

 Rate change for all live contracts at any point of time can be effected
only through MD.CSN.RATE.CHANGE
 Id is Rate change processing date
Can be current or future date
 Rate change effective date can be past, current or future date
If future, should be before processing date
 Deal sub type wise, Category wise, new commission rate
Can be input only if used in MD.TXN.TYPE.CONDITION
 Retrospective effect can be given by option
Applicable only for deals without participation
 Excess / shortfall credited to / debited to CSN account, P &L and Accruals
 Differential Tax collected for upward revision. No Refund
 COB job. Updates MD.TXN.TYPE. CONDITION

Slide 45
Product features – Correspondent Bank limits

 Limit issued to T24 bank by correspondent banks can be set up

 Whenever guarantees are issued on this bank, system updates this

limit (in addition to updating limit of guarantee applicant)

 In LIMIT.PARAMETER, EXT.LIMIT.APP, EXT.LIMIT.NO and

EXT.LIMIT.RTN Fields should have been duly filled as
 MD.DEAL
 NNNNN (any unique number – maximum 5 digits)
 MD.CB.LIMIT.UPDATE (standard routine)

 Limit of the Correspondent Bank is set in MD.CB.LIMITS

 Id shall be CB Limit Number followed by Customer Id of Correspondent
bank
 NNNNN.CCCCCC

Slide 46
Product features – Correspondent Bank Limits

 In MD.DEAL, if the RECEIVING.BANK Field is filled, only then

CB.LIMIT.UPDATE Field opens up
 Default value “Yes” will update the correspondent bank’s limit set up with
principal amount and future positive movements disregarding provision
held, if any
 If limit is not set up, but over ride is approved, system creates default limit

 If Correspondent bank limit is not required, this Field can be set to “No”

Slide 47
Product features – Invocation of guarantees issued

 Invocation possible for Contract types CA and MA

 Operation in stages
 Process followed by
 either Execute or Cancel
 Under Process, invocation is under processing. Neither accounting nor limit
updated. Only delivery messages acknowledging invocation request and
seeking payment
 If executed, payment messages, accounting entries and limit updated
 If cancelled, no change to deal. Hence no accounting entries or limit
updated. Delivery message indicating rejection sent

Slide 48
Product features – Invocation of guarantees issued

 INV.STATUS Field and related fields in MD.DEAL used for all 3 stages

 INV.PAYMENT.METHOD and INV.SETTLE.ACCOUNT Fields can

have values of Internal, Nostro and External and correspondingly any
Customer, Nostro and Internal accounts

 On execution, system updates MD.BALANCES suitably and records

invocation details in MD.INVOCATION.HIST table

Slide 49
Product features – Receiving guarantees

 Reverse process of issuing Guarantees

 Guarantees can be created manually or semi-automatically in

MD.DEAL
 When guarantees or amendments are received from other banks via SWIFT
as MT 760 or MT 767, the same can be captured by system through
interface and put on IHLD status in MD application for the bank to check
and authorise

Slide 50
Workshop - 3

 Use User Menu > Corporate Operations > Guarantees > Guarantees
Received > Guarantee Received - Covering Facility

 Record a guarantee received from your customer for USD 50000 to cover
the overdraft facilities offered to another customer by the bank

 Guarantee is valid for a period of 12 months

 Commit the record and get it authorised

Slide 51
Workshop – 3 Solution

Slide 52
MD – Participation deals

Slide 53
Product features – Multi participant deals

 Guarantees with large amounts involving participation of other banks –

risk is spread and commission shared (full or part)

 Master deal booked for entire value of guarantee - Leader’s portion as

well as participants. Limit only for Leader’s portion
 Under first option, Asset and Liability are NOT NETTED in master deal.
Participant shares could be booked as separate deals when counter
guarantee is received
Entire commission booked as income and participants share distributed
as expense
 Under second option, Asset and Liability are NETTED in master deal. Only
the Leader’s share accounted under its name
Option available to split the commission or not. If the commission is
proposed to be split, the participant’s share will be credited to an internal
account and only Leader’s share booked as income

Slide 54
Workshop - 4

 Use User Menu > Corporate Operations > Guarantees > Multi-
Party/Participation Guarantees > Issue of Multi-party Guarantee
 Input a master deal for USD 1 million on behalf of your corporate customer
for 6 months in favour of Tulip International Ltd
 Allot shares of USD 200 thousand and USD 500 thousand to two
participants – say Allied Irish Bank (Customer No: 100427) and Merrill
Lynch (Customer No: 100639)
 Do not net the asset and liability portions so that the entire amount is
recorded in accounting
 Collect commission @ 2% on a monthly frequency at the end of each month
from customer’s USD current account
 Commit the record and get it authorised

 Use User Menu > Credit Operations > Limits > Enquiries > Liab Enquiry
 Look to see the effect on limit

 Using Command line

 Look at MD.BALANCES for commission details

Slide 55
Workshop – 4 Solution

Slide 56
Workshop – 4 Solution

Slide 57
Workshop – 4 Solution

Slide 58
Product features – Movement in participation

 Positive or negative movement for participants is possible from time to

time

 For a given movement date, principal movement for all participants,

including the leader, should be indicated in Field PRIN.MOVEMENT
 Positive and negative movements should be shown separately and not
netted against each other

 Sub value Fields PART.CUS and PART.PRN.MVMT to be used to

indicate participant wise movement

 Balance amount is always for the leader

Slide 59
Product features – Online maturity

 Input of YES in ONLINE.MAT Field to mature Deal Online

 Input allowed only if the EVENTS.PROCESSING Field is also set as
ONLINE
 Maturity would be treated as TODAY

 Online maturity possible only if the Deal does not have

 any Principal movements scheduled
 any Charges scheduled for a future date
 Invocation set to Process, Execute or Cancel
 Overdue status relating to PD
 linkage to Syndicated Loans
 pending Drawings in case it is linked to LC

 Online Maturity shall not be permitted for any Forward Deals

Slide 60
Product features – Online maturity

 Commission accounting entries, limit reinstatement, release of margin

done online along with liquidation of the Contract

 When the Commission is set as a frequency, system would set the

CAPITALIZE.DATE Field as TODAY and the entries would be passed

 Where commission is Begin type and without frequency, all future

schedules should be deleted. Accounting entries would however be passed
for the current schedule amount in full

 Where the commission is End type and without frequency, all future
schedules should be deleted and the CSN.DATE Field has to be input with
Current date. Accounting entries would be passed only for the amount
accrued till date

Slide 61
MD Other features

Slide 62
Linkage with LC

 When Shipping guarantees are issued in case of any Import LC due to

delay in arrival of documents, the margin already collected for LC can
be apportioned or entirely used in MD.DEAL used for such guarantee
issue

 If need be, additional margin can be collected at guarantee level

 MD.DEAL has Fields to register LC.REFERENCE while issuing

guarantee under CA type
 Information regarding margin defaulted by System in LC.MARGIN.AMT and
LC.MARGIN.ACC Fields
 Transfer of margin from LC to guarantee could also be reduced

 In LC, system maintains information about the guarantee in multi value

Fields GTEE.REFERENCE and GTEE.MARGIN.AMT

Slide 63
Linkage with Drawings

 In DRAWINGS, we have GTEE.REFERENCE Field

 Input in this Field signifies that the Drawing is done for the set of
Documents for which Shipping Guarantee was issued

 In this scenario, the Credit Provision account of MD.DEAL is defaulted by

the System as Drawdown account of Drawings

 Excess or shortage of provision over drawing amount is credited to or

collected from a provision cover account

System defaults the provision debit account of LC to

PROV.COVER.ACCT Field in Drawings

 When a Drawing is done under the Shipping Guarantee, the Drawing

reference is stored in DR.REFERENCE in MD.DEAL

Slide 64
Linkage with SL

 Guarantees can be issued as part of Syndicated Lending operation

linking MD module

 While inputting such guarantees SL.REF.TRANCHE Field in

MD.DEAL should be input first with a valid Facility reference appended
with Tranche number under utilisation
 The referred facility should have included issuing a guarantee
 System defaults a value of GT in the Field SL.PROD.TYPE from the Facility
referred

 Then guarantee can be issued in MD and SL gets updated with this

information

 Increase/decrease in principal of such MD.DEAL is also possible

Slide 65
Product features - Accounting

 The accounting entries passed for MD module are Contingent as well

as Non contingent in nature
 STMT.ENTRY and CATEG.ENTRY passed for Debit / Credit to Accounts
and PL heads
Accounts include Customer accounts and Internal accounts
PL heads include Charges and Commission
 RE.CONSOL.SPEC.ENTRY is passed online for new contracts if the Field
EVENTS.PROCESSING is set to ONLINE
 Asset types: FWDCONTDB, FWDCONTCR, CONTDB, CONTCR,
FWDMEMODB, FWDMEMOCR, MEMODB, MEMOCR - all contingent
 Transaction codes specified through MD.PARAMETER. Also uses
FT.COMMISSION.TYPE transaction codes
 RE.TXN.CODES : LNW, FNW, LIN, LRP, COM, ACC, MAT, CUS, APP,
SCH etc

Slide 66
Accounting entries

Contingent Asset handling

SE / CE /
Cr / Dr Account Remarks
SPEC

Dr CONTDB SPEC LNW – Live new Principal

Dr FWDCONTDB SPEC FIN – Forward Principal increase

FRP – Repayment Forward
Cr FWDCONTDB SPEC
Principal

Dr CONTDB SPEC LIN – Principal increase

LRP – Partial repayment of

Cr CONTDB SPEC
Principal (or Principal decrease)
Cr CONTDB SPEC MAT – On maturity of deal
Dr Customer account SE Payment of Charge defined in
Cr PL CE FT.COMMISSION.TYPE

Slide 67
Accounting entries

Contingent Liability handling

SE / CE
Cr / Dr Account Remarks
/ SPEC

Cr CONTCR SPEC LNW – Live new Principal

Cr FWDCONTCR SPEC FIN – Forward Principal increase

FRP – Repayment Forward

Dr FWDCONTCR SPEC
Principal

Cr CONTCR SPEC LIN – Principal increase

LRP – Partial repayment of

Dr CONTCR SPEC
Principal (or Principal decrease)

Dr CONTCR SPEC MAT – On maturity of deal

Dr Customer account SE Payment of Charge defined in

Cr PL CE FT.COMMISSION.TYPE

Slide 68
Accounting entries

Time based Commission – Collected in case of Assets

Two situations possible

1. Collected at the beginning and amortised over a period
2. Accrued over a period and collected at the end of the period

SE / CE /
Cr / Dr Account Remarks
SPEC
Dr Customer Paying SE
Paid immediately
Cr Commission in advance SPEC
Dr Commission in advance SPEC
Periodical amortisation
Cr PL CE
Dr Commission due SPEC
Cr PL CE Periodical accrual
Dr Customer Paying SE Collection at end
Cr Commission due SPEC

Slide 69
Accounting entries

Time based Commission – Paid in case of Liabilities

Two situations possible
1. Paid at the beginning and amortised over a period
2. Accrued over a period and paid at the end

SE / CE /
Cr / Dr Account Remarks
SPEC
Dr Commission in advance SPEC Paid immediately
Cr Customer receiving SE
Dr PL CE Periodical
Cr Commission in advance SPEC amortisation
Dr PL CE
Periodical accrual
Cr Commission due SPEC
Dr Commission due SPEC
Paid at end
Cr Customer receiving SE

Slide 70
SWIFT messages supported

SWIFT Description Field Name

MT760 Guarantee FURTHER.ID - Issue or For Tag 23

Issuance Request For Tag 30
DEAL.DATE For Tag 77 C
GTEE.DETAILS For Tag 72
SENDER.INFO

MT767 Amendment REFERENCE.1 For Tag 21

FURTHER.ID For Tag 23
AMENDMENT.NO For Tag 26 E
DEAL.DATE For Tag 31 C
GTEE.DETAILS For Tag 77 C
SENDER.INFO For Tag 72

Slide 71
SWIFT messages supported

SWIFT Description Field Name

MT768 Guarantee SETTLE.ACCOUNT For Tag 25

Acknowledgem ACCT.WITH.BANK For Tag 57a
ent (If not filled existing account
relationship is to be used)

MT769 Guarantee SETTLE.ACCOUNT For Tag 25

reduction MOVEMENT.DATE For Tag 30
(Generated as AMT.OF.CHGS For Tag 32 a
part of COB) ACCT.WITH.BANK For Tag 57a

Whenever a cover payment has to be sent for a customer payment

message MT103, system generates another SWIFT message MT202COV
with MT103 details

Slide 72
System maintained tables

 Some important System Maintained tables

 MD.SCHEDULES
Guarantee wise, date wise schedules
 MD.SCHED.DATES
Guarantee wise, principal movement dates
 MD.CUSTOMER
Customer wise list of MD.DEALS outstanding
 MD.BENEFICIARY
Beneficiary wise list of MD.DEALS outstanding
 MD.BALANCES
Guarantee wise details of Principal, charges and commission
 MD.PART.CSN.BALANCES
Guarantee wise participant commission details
 REVERSED.MD.DEALS
Date-wise list of MD.DELAS reversed

Slide 73
System maintained tables

 EB.CONTRACT.BALANCES

 Balance file containing details of consolidation key and Asset type wise
balances

 Principal outstanding amounts in product files and any related amount

Fields such as accrued interest, charges, commissions, etc

 Current and historical details are maintained

 Information held currency wise, Asset type wise and date wise balance
as well as consolidation key

Slide 74
MD Standard enquiries

 Bank Guarantees Outstanding

 Complete list of all the outstanding guarantees

 Guarantees Due for Expiry

 Full details of guarantees which are due for expiry

 Invocation Claims Received Under Guarantee

 Invocation Claims Paid Under Guarantee

 Reversed MD.DEALs

Slide 75
MD Dependency diagram

MD.PARAMETER
INTEREST.BASIS MD.CLAUSES

CUSTOMER
CATEGORY MD
ACCOUNT FT.COMMISSION.TYPE
CURRENCY
MD.TXN.TYPE.CONDITION
NOSTRO.ACCOUNT MD.BALANCES
APPL.GEN.CONDITION
LIMIT MD.PART.CSN.BALANCES
MD.GROUP.CONDITION MD.CUSTOMER
COLLATERAL
MD.BENEFICIARY
MD.SCHEDULES
EB.ACTIVITY
MD.SCHED.DATES
EB.ADVICES
MD.EOD.LIST

Slide 76
Summary

 We have so far seen

 the dependencies and linkages between MD module and T24 Core and
other applications

 main business features of the MD module

Slide 77
Thank You
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