T24 – Past Dues

TEMENOS EDUCATION CENTRE

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Past Dues - Objectives

 Product Overview

 Asset classification & Provisioning

 PD dependencies

 Application specific Parameters

 PD build sequence

 PD product features & other features

 Standard enquiries & System maintained tables

Slide 2
Past Due – Product Overview

Loans Liquidation
(LD,MM) account debited
irrespective of
Automatic
Loans (AZ) available
amount
Mortgages

Swaps Liquidation
account debited
Liquidation Semi and balance
Accounts
mode taken to PD
Automatic
Further
LC Drawings
liquidations
managed through
Bills PD settings

MD – Charges
Commission Manual
Entire dues taken
to PD. Any
When payment liquidation is
Is due done manually

Slide 3
Past Due – Product Overview

Current

When payment is
due, overdues alone

Penalty accruals neither calculated nor

Pre-grace booked throughout

Grace Penalties calculated. Can be charged /

waived if dues are paid when in same status

PDO Accrual and charging of penalty interest

Stops to charge penalty interest as

NAB repayment is in doubt

Outstanding deducted from current year

WOF profit and PD record is settled

FWOF Outstanding settled from Provision. Record

retained in PD for future recovery
Slide 4
Asset classification and provisioning

Standard Income
accrual

LD

NAB

MG Sub standard
WOF

Automatic
Provisioning
PD

Doubtful
Manual FWOF
Provisioning

Loss

Slide 5
PD Dependencies – Product related

 PD module uses the same category codes of underlying applications

 Category codes of underlying contracts automatically defaulted when
moved to PD

 When a balance in an account is manually captured, then a valid

category code linked to PD should be input
 Customer Account Category codes of 1000 - 9999
 LD & MM Category codes of 21050 - 21099
 MG Category codes of 25001 - 25099
 Swap category codes of 29000 – 29999

 It is possible to specify specific rules for Past due management for any
Account or other Contract Category code in PD.PARAMETER and one
for System to be used as default

Slide 6
PD Dependencies – Settlement accounts

 Original Settlement Account

 Customer / Nostro account defaulted from the underlying contract when the
PD contract is created and subsequently updated
 It is a multi-value field which will record different settlement accounts if the
underlying contract uses different accounts for settling different kinds of
payments
e.g. different accounts for principal and interest

 Repayment Account
 The account to be debited with repayment amount
 If no input is made then the first account in ORIG.STLMNT.ACT multi-value
Field will be defaulted

Slide 7
Application specific Parameters

Slide 8
PD - Parameter tables

 Parameter tables for PD

 PD.ACTIVITY
 PD.ADVICES
 PM.POSN.TYPE
 PD.AMOUNT.TYPE
 PD.PARAMETER

 Parameter tables for provisioning

 LN.ASSET.CLASS
 ASSET.CLASS.PARAMETER
 PD.WOF.REASON

Slide 9
PD.ADVICES

 PD.ACTIVITY is used to represent a status change in the life of a PD

contract like moving from Grace status to PDO status
 Id is 3 digit code
 Id 110 reserved for chaser advices
 PD.ACTIVITY is linked to PD.PARAMETER

 In PD.ADVICES, we can specify, activity wise, application wise, product

wise, the type of advices to be produced or none
 109 or 109-LD or 109-LD-21051
 Message type should have been pre defined in DE.MESSAGE
 Can also produce pre defined Deal slips
 A charge / commission can be attached here to collect whenever the
message is produced

Slide 10
PD.AMOUNT.TYPE

 Types of amounts allowed in PD module are defined here

 Allows base types like PR, IN, CH, CO, TX, PE, PS etc and the five
additional pay types, A1 to A5, defined in MG
 Possible to define extra types of up to six characters, but with the first two
characters to be one of the above – TXLOC
 Also possible to define by product categories – PR21050

 These amount types are used in PD.PARAMETER

 Transaction codes to be used and position type to be used, if need be,

are also specified
 Position type should be pre defined in PM.POSN.TYPE
 Position type input is optional and only for activities which update PM
reports

Slide 11
PD.PARAMETER

 PD.PARAMETER sets rules for handling overdue payments

 Depending on the number of different sets of rules required, different

PD.PARAMETER records can be created
 Mandatory record with Id of Company Code
 As many records with Ids of Category codes of products covered
If not set up, default rules from record with Company code used
 Records with Id of AC and AC-Category code
If over-drawal in accounts are to be covered
 Records with Id of MD and MD-Category code
If unpaid charges and commissions of MD are to be covered

Slide 12
PD.PARAMETER

 When dues of a contract move to PD, instead of applying interest any

more, we can apply a penalty interest rate or penalty interest spread

 Accounting related choices

 The first part of this table relates to assigning P&L Category codes
Current period, previous months, previous years for interest and spread
Previous periods used for back valued transactions
Write offs
 Transaction codes for
Debits and Credit entries for Write-off
Passing any adjustment entries
Netting several entries across a customer’s accounts
When opted so in PD record
Taking over balances through PD.CAPTURE

Slide 13
PD.PARAMETER – Accounting related choices

 Choice to indicate whether the already accrued penalty interest /

spread should be reversed from Profit and loss when a contract status
changes to NAB

 Choice to report in the balance sheet, the different overdue

components like overdue principal, interest, charges, commission etc
 In separate lines or together by using CRF.BY.TYPE Field

 Accrual cycle frequency for penalty

 Separate choices possible for local and foreign currencies
 Daily or Monthly frequency allowed

 Capitalisation frequency for penalty

 Can capitalise and charge penalty based on this - CE and CS
 Can be set for penalty interest or spread. If set for both, then the frequency
should be same

Slide 14
PD.PARAMETER – Status control

 PD records go through different status

 Pre grace, Grace, PDO, NAB and WOF / FWOF

 Through different fields, it is possible to mention how long an overdue

should be in a particular status
 Can be set as number of days or number of installments
Days can be from 0 to 999 and indicated as a number
Installment indicated as P followed by 1 to 2 numbers

 PRE.GRACE.PERIOD Field indicates the number of days when no

penalty interest is calculated or booked

 GRACE.PERIOD.INT, GRACE.PERIOD.SPREAD Fields indicate how

long the grace period lasts before penalty is applied
 At the end of this period, the status moves to PDO

Slide 15
PD.PARAMETER – Status control

 NAB.PERIOD.INT / NAB.PERIOD.SPREAD Fields indicate the

number of days / installments after which accruing and posting of
penalties should be stopped for overdues
 Calculation continues for information to enable subsequent collections
 If NO is indicated in these fields, then status change from PDO to NAB will
not be automatic

 SUB.PAY.SETTING Field identifies whether or not all subsequent

overdues should be automatically taken to NAB if the first overdue
payment has become a NAB
 NO in this field would make the subsequent overdues go through the normal
ageing process of PRE, GRA and PDO before becoming NAB

Slide 16
PD.PARAMETER – Status control advices

 STATUS.CHANGE and ACTIVITY.CODE multi value Fields help define

which advice should be sent when there is a status change
 Activity codes have been pre defined in PD.ACTIVITY
 Types of advices required for these activities have been pre defined in
PD.ADVICES

 Through SMALL.AMOUNT and SMALL.AMT.CCY Fields, we can stop

sending advices if the PD amount is less than stipulated amount

 Possible to form contract groups like Corporates, Private etc and apply
different rules for sending advices through CONTRACT.GRP and
associated Fields
 Groups formed in APPL.GEN.CONDITION for PD used
 Advice frequency, option to send advices as per date in frequency or as per
date of entry into PD, whether normal status change advices to be
continued or stopped, any chaser advice to be sent after reaching a status
and any special status to be recognised can be set for these groups

Slide 17
PD.PARAMETER – Penalty calculation

 Penalties can be calculated as Penalty interest and Penalty spread,

known as PE and PS. Normal interest calculation stopped for PD

 CONTRACT.METHOD Field has 6 choices to calculate penalty from

the underlying contract rate
 1 – Use underlying contract rate as penalty interest
 2 – Use underlying contract rate as penalty interest and calculate penalty
spread as defined in PENALTY.SPREAD Field. PE and PS will be accrued
separately
 3 – Use underlying contract rate as penalty interest and difference between
MAXIMUM.LEGAL.RATE Field and contract rate as penalty spread
 4 – Use underlying contract rate plus value in PENALTY.SPREAD Field.
Penalty interest and spread will be accrued together as PE
 5 – No penalty applied. For AC parameter records, this is the only choice
available
 Null - Use PENALTY.RATE Field or PENALTY.KEY + PENALTY.SPREAD
Field values. For MD parameter records, this is the only choice available

Slide 18
PD.PARAMETER – Penalty calculation

 If the contract rate is not to be linked for calculating penalty rate or

penalty spread, it is possible to indicate a separate penalty rate or
penalty spread
 PENALTY.RATE Field can be set to indicate a fixed rate for calculating PE
 PENALTY.KEY Field can be set to indicate a floating rate for PE
 PENALTY.SPREAD Field can be set to indicate a PS
This value is also used for options 2 and 4 in Contract method, when a
spread is to be included as penalty

 Possible to indicate cap and floor rates between 100 and 0% by

MAXIMUM.LEGAL.RATE and MINIMUM.RATE Fields
11 digits including decimal places

Slide 19
PD.PARAMETER – Penalty calculation

 PEN.CALC.BASIS Field defines the basis on which penalty interest is

calculated and PS.CALC.BASIS Field for spread
 PS.CALC.BASIS Field could be used only if the contract method is set to
use underlying contract rate and penalty spread

 Basis of calculation could be a combination of any of the amounts like

 PR Overdue Principal
 IN Overdue Interest
 CO Overdue Commission
 CH Overdue Charges
 TX Overdue Taxes
 A1 to A5 Overdue Additional pay types of Mortgages
 RP Repayment amount

Slide 20
PD.PARAMETER – Automatic penalty spread calculation

 By using AUTO.ADJUST.SPREAD Field, penalty spread on a PD could

be calculated automatically by the system
 If this field is flagged to YES, penalty spread is calculated as the difference
between the value in PENALTY.RATE Field in Contract or
PD.PARAMETER and the interest rate of the underlying contract
Penalty rate = 12%. Contract rate = 10%. PS = 2%
 This can be used only when the contract method is Null, i.e. to use only
Penalty rate or Penalty key
 This spread will come into effect after the number of days or installments
specified in PE.SWITCH.PERIOD Field have been crossed
 POST.GR.PE.CALC and POST.GR.PS.CALC Fields used to indicate basis
for calculation of penalty interest and penalty spread
OP, being Outstanding Principal (Overdue in PD and outstanding in
underlying contract) can be the only choice for PS calculation

 Even after the overdues are cleared, penalty spread could be continued
on the outstanding loan by setting the RESTORE.CALC Field to null

Slide 21
PD.PARAMETER – Repayment choices

 REPAYMENT.ORDER Field indicates the hierarchy of repayment

amount processing
 All Amount types should be mentioned with a descending order of
preference
 This order and accordingly adjustment amounts are defaulted while
processing repayments for PD.
Possible to manually alter allocation amounts by user at adjustment stage

 A different hierarchy of repayment can be indicated for fully written off

cases
 If not defined in FWOF.RPY.ORDER Field, repayment order hierarchy is
followed

 When the liquidation mode is semi automatic, it is possible to make the

system look at the liquidation account from time to time and
automatically adjust the balance towards dues

Slide 22
PD.PARAMETER – Repayment choices

 Handling repayments in Semi automatic liquidation mode

 RETRY.FREQ Field helps to set the frequency for adjusting dues from
liquidation account

 MIN.AUTO.PERCENT Field helps to set the minimum percentage of the

outstanding amount that is required to be on the liquidation account before
adjustment
0 to 999 allowed. 10 means unless the liquidation account has a balance
to meet atleast 10% of the dues, no adjustment should be tried
If 0 percent is set here, any balance in the liquidation account is available
for adjustment

Slide 23
PD.PARAMETER – Repayment choices

 USE.AVBL.FUNDS Field helps decide whether the liquidation account

should be debited irrespective of availability of funds or not
 Yes option will provide funds only to the extent of availability in the
liquidation account and the balance overdues will continue in PD
 Null option will result in even overdrawing the liquidation account if the
balance is not sufficient to clear overdues

 This field, in conjunction with MIN.AUTO.PERCENT will effectively

decide amount available for overdue payment
 80 in MIN.AUTO.PERCENT Field and No here will clear the overdues by
overdrawing the liquidation account if need be, provided, it had atleast 80%
of the overdues. The liquidation account can be overdrawn to a maximum
extent of 20% of overdues.
 If this field is set as Yes, then minimum automatic percent required will be
ignored and any amount available will be collected without overdrawing the
account

Slide 24
PD.PARAMETER – Repayment choices

 REPAYMENT.METHOD Field helps decide the order of repayment with

3 choices

1. Repayment order by repayment type irrespective of date

Amount available must be greater than minimum auto percent value of
the total repayment due for each payment type for all dates

2. Total outstanding by date for all repayment types

Amount available must be greater than minimum auto percent value of
the total repayment due for all types on that date

3. Repayment order by date and then by repayment order within date

Amount available must be greater than minimum auto percent value for
each individual type in order specified in repayment order by date

Slide 25
Workshop - 1

 System set-up has been done as follows:

 REPAYMENT.ORDER IN, PR, CH
 MIN.AUTO.PERCENT 10
 USE.AVBL.FUNDS NO
 REPAYMENT. METHOD 3

 The dues position of a customer are as below. On April 1, 2009, the

customer has paid USD 600 into liquidation account. How will the
appropriation be?
Date Pr dues Int dues Ch dues

Jan 12, 2009 1,000 345 35

Feb 19, 2009 547

Mar 15, 2009 5,000 375 44

Slide 26
Workshop - 1 Solution

Account Balance
USD 600
Jan 12, 2009
MIN.AUTO%
10
Interest 345

Principal 1,000
USE.AVBL.FUNDS
Charges 35 NO

34.5 available ?
Funds available
USD 600
YES
Adjust IN
dues of 345
345 available ? YES

Slide 27
Workshop - 1 Solution

Account Balance
USD 255
Jan 12, 2009

Interest NIL
MIN.AUTO%
Principal 1,000 10
USE.AVBL.FUNDS
Charges 35 NO

100 available ?
Funds available
USD 255
Adjust PR dues NO
IN FULL
A/C overdrawn
1000 available ? YES
by USD 745

Slide 28
PD.PARAMETER – Other choices

 RETRY.REPAY.STATUS Field to decide the level upto which

automatic repayment would be tried
 It this is set to NAB then attempts will be made to repay contracts with a
status of PRE, GRA, PDO and NAB

 Capitalisation frequency for Penalty interest and spread

 The capitalised interest and spread appear with types CE and CS and it is
possible to apply penalty on them

 Possible to choose a basis different from the interest day basis of the
parent contract
 PE and PS calculation will take place on this basis
 If not mentioned, basis of parent contract will apply for PD also

 Possible to attach a charge to be defaulted whenever a repayment

takes place

Slide 29
PD.PARAMETER – Payment rollover

 If a Customer pays installment amount of a loan in full, then it is

possible to shift due date of the oldest overdues forward to the next
due date by opting as Yes in PAYMENT.ROLLOVER Field
 Components of loan that are to be considered as Installment components
like PR, IN etc. are indicated in INS.AMT.TYPES multi value Field
 The total overdue installment may include other components like PE, PS etc
 When atleast one loan installment amount is paid in full, then due date for
the balance amount of over due installment is shifted to next due date

 To enable this functionality

 SUB.PAY.SETTING Field should have been set as Yes, by which if one PD
installment becomes NAB, then subsequent installments would become
NAB straightaway without going through ageing process
 REPAYMENT.METHOD Field should have been set as 1, by which dues
would be adjusted by repayment type irrespective of date
 PE & PS should be named as the first two components in the Repayment
order and should not be capitalised as CP and CS

Slide 30
PD.PARAMETER – Other choices

 When a PD contract becomes NAB, it is also possible to suspend

interest accrual in underlying LD, MG and AZ contracts

 SUSPEND.INCOME Field can be multi valued and any of these applications

could be included for the record with Id as Company Id

 Income would cease to accrue to P&L and would be credited to Suspended

Asset type of SP

 For records created with category codes of LD, MG or AZ related, this field
could be set as Yes

Slide 31
PD.PARAMETER – Other choices

 When the status changes to NAB, it is possible to reverse all the

accrued income by choosing Yes in REVERSE.PL.AT.NAB Field

 For LD, MG and AZ, if the income has been opted to be suspended, then all
the unrealised income including interest and commission in the contract as
well as PD would be reversed

 If income has not been opted to be suspended, then only PE and PS

portions would be reversed

 Reversal of current and previous year’s income can be segregated and

accounted for separately through CAT.OD.INT.CUR, CAT.OD.INT.PRV.YR,
CAT.OD.SPR.CUR and CAT.OD.SPR.PRV.YR Fields

Slide 32
PD.PARAMETER – Other choices

 By setting IMPACT.LIMIT Field as YES, the customer’s limit can be hit

by all overdue amounts that flow from the parent application like
overdue principal, interest, charges etc
 However, amounts accruing on the PD contract like penalty interest and
spread will not affect limits

 Penalty interest calculations can be suitably rounded by using any pre-

defined rule set in EB.ROUNDING table like Natural, Round up, Round
down etc.
 ROUNDING.RULE Field can be used for this

 Possible to accept or waive the penalties calculated during the Grace

period when the repayment is done while the PD is still in GRA status.
WAIVE.GRA.PE and WAIVE.GRA.PS Fields could be opted or not
 Both should have the same option, to be waived or not
 Allowed only if CONTRACT.METHOD is not set as 4 or 5 - when penalty
spread is added to penalty interest or when there is no penalty

Slide 33
LN.ASSET.CLASS

 Used to define internal classification of Assets based on their quality

 Standard, Sub-Standard, Doubtful, Loss etc

 Id upto 3 digit number. Assets to be defined in ascending order of

overdues
 Standard 10, Sub-standard 20, Doubtful 30 etc

 Basic rules regarding provision, write-off and income recognition like

Provision percentage, P&L and Internal account categories set for
defaulting into ASSET.CLASS.PARAMETER
 When an asset class needs provisioning, P & L head is debited and an
internal account for Provision credited
 When an asset class is marked for write-off, then Provision account debited
and Asset credited
 When an asset class is not supposed to accrue income, then status
becomes NAB and accounting for accrued interest is discontinued in P&L

Slide 34
ASSET.CLASS.PARAMETER

 ASSET.CLASS.PARAMETER is used to set down conditions to classify

assets to fit into the already defined asset classes and to follow
processing rules thereafter
 Id is Company code

 Categories of loans for which provisioning is required is to be indicated

 Some or all LD and MG Categories can be chosen
 These categories to be indicated for PD also to cover provisioning of loans
when they are in LD / MG or later move to PD
 Separate records in PD.PARAMETER should be created for these
categories
REVERSE.PL.AT.NAB Field for those records should be set as Yes to
reverse all the accrued income from out of PL
For all contracts under these categories, accrual or non accrual will be
decided by ASSET.CLASS.PARAMETER and not PD.PARAMETER

Slide 35
ASSET.CLASS.PARAMETER

 Period of overdues that would make a loan to be classified under a

particular asset class are defined

 Could be reckoned with number of days it is overdue with regard to any

PD.AMOUNT.TYPE like PR, IN, CH, CO or ALL
PR 30 , IN 15 or ALL 45, meaning sum total of any overdue of 45 days

 Operands provided to monitor amount types either singly or in combination

Standard means no overdues
Sub-standard means Principal overdues in range of 1 and 29 days
Doubtful means Principal overdues of 30 or more days and Interest
overdues above 60 days

 Asset classes should be organised in ascending order

Slide 36
ASSET.CLASS.PARAMETER

 Other aspects to be mentioned for each asset class

 Provision percentage
 Recognition or de-recognition, of income from loans, for portion moved to
PD and Standard Assets not having related PD Contracts
 P&L category to be used for debiting provision and internal account
category code for crediting provision
 All the above values are defaulted from LN.ASSET.CLASS, but could be
changed here, if need be

 Frequency of provisioning will be common to all asset classes

Slide 37
PD.WOF.REASON

 Used to define reasons for writing off a loan

 When a loan is written off manually by changing the asset class to

write-off status in PD record, this reason can be mentioned there

 Id is 2 digit number

Slide 38
PD Build sequence

Mandatory *
1. PD.ACTIVITY
Optional

2. PM.POSN.TYPE

3. PD.AMOUNT.TYPE * PM.POSN.TYPE
Basic types mandatory

4. PD.PARAMETER * PD.AMOUNT.TYPE
Default record mandatory PD.ACTIVITY
Others optional APPL.GEN.CONDITION

5. PD.ADVICES PD.ACTIVITY

FT.COMMISSION.TYPE
6. LN.ASSET.CLASS

7. ASSET.CLASS.PARAMETER LN.ASSET.CLASS

8. PD.WOF.REASON

Slide 39
PD Product features

Slide 40
Past Due Record

 Main application is PD.PAYMENT.DUE

 If T24 has created a PD record using the Semi-Automatic or Manual

Liquidation mode, key to this record is the contract reference prefixed
by PD
 PDLD0733900049
 PDMG0733900015
 PDTF073390001401

 Any over due, from time to time will be captured in the same record, but
detailed separately
 Due date and type wise

Slide 41
Capture Overdue from Accounts

 Using PD.CAPTURE, it is possible to manually create a PD record

 This would be when the loan repayments were allowed to settle to an
account when funds were not available and the liquidation mode on the loan
contract is set to Automatic rather than Semi-Automatic
 This functionality may also be used during take over, when the entire
contract is in Past Due status

 It may be borne in mind that the respective contract balance files (like
LMM.ACCOUNT.BALANCES) will not be updated when balances are
caught from account though contract No is referred

 Id for creating in PD.CAPTURE will be PDCA/Julian date/Serial No

 On authorisation, record moves to PD.PAYMENT.DUE with id of

 PDPD/Julian date/Serial No (at the time of authorisation) OR
 PD--/Contract No if a contract reference is used

Slide 42
Effect on Limits

 In the case of a Non reducing limit (revolving limit), when a principal

schedule is processed for a contract, available amount of limit is
reinstated, but is again reduced by PD amount

 For a reducing limit (non-revolving limit), online limit is reduced by the

principal scheduled amount. Info-limit is created for the PD amount

 For accounts, PD records created by system do not impact limits.

When they are captured through PD.CAPTURE, then information limit
is created

 By setting IMPACT.LIMIT Field in PD.PARAMETER as YES,

customer’s limit can be impacted by all overdue amounts that flow from
the parent application like overdue principal, interest, charges, etc
 But amounts accruing on PD contract like penal interest and spread will not
affect limits

Slide 43
Workshop - 2

 Use User Menu > Credit Operations > Loans > Enquiries > List of
Other Loans by Product
 Note down Id of a live LD Contract

 Use User Menu > Credit Operations > Loans > Past Dues > Capture
Overdue Amounts > Capture Overdue from Contracts
 Capture an “overdue amount” of USD 6,000 (Principal USD 4,500 and
Interest USD1,500) using this contract reference
 Interest 12%

 Get the record authorised

Slide 44
Workshop – 2 Solution

Slide 45
Workshop – 2 Solution

Slide 46
Past due processing

 Four operations are possible in PD.PAYMENT.DUE application

 SCHEDULE
For defining future events like penalty spread change

 ADJUSTMENT
For adjusting outstanding payment upwards or downwards

 MAINTENANCE
For changing contract details like Limit reference

 REPAYMENT
For manual repayment operations

Slide 47
Operation - SCHEDULE

 The SCHEDULE operation allows definition of future PD events

 Rate Changes
Can be back valued or dated today

 Spread Changes
Can be back valued or dated today

 Chaser advice and Regular advice

Can be scheduled from today or future date

Slide 48
Operation - ADJUSTMENT

 ADJUSTMENT operation is used to adjust the outstanding payment

amounts, by type, either upwards or downwards

 If the adjustment is done to PE and PS amount types, entries are passed to

affect P & L if PD is in OVERDUE status

 If the PD is in NAB, then entries are passed to affect the asset in Asset
Type SP

 If adjustment is done to any other PD.AMOUNT.TYPE, input of Liquidation

Account is mandatory
Adjustments will be from / to liquidation accounts in these cases

Slide 49
Operation - MAINTENANCE

 MAINTENANCE operation can be used to

 Change the way the exposure of overdue is reported by changing

LIMIT.REFERENCE
PORTFOLIO.NO

 Determine accounting rules

Whether accounting entries are netted over the client account
Whether the default settlement account is used

 Change the status of individual payments

Slide 50
Operation - REPAYMENT

 REPAYMENT operation monitors all manual payments to PDs

 If not NAB, repayment date can also be back valued till the oldest due
date or penalty repaid date
 Cannot be a future date

 Three possibilities under Repayment

1. Settle full amount
2. Settle with penalties
3. Partial settlement
With the same or different settlement order

Slide 51
Provisioning

 It is possible to manage provisioning automatically or manually for the

Category codes defined in ASSET.CLASS.PARAMETER

 LD, MG and PD applications have PROVISION.METHOD Field to

choose whether automatic or manual provisioning is envisaged at
individual contract level
 Null or AUTO for automatic provisioning
 MANUAL for user management manually.

 They also have fields to indicate the Asset class, Provision percentage
and provision amount to help manual management of provisioning
 When PD exists, these should match corresponding PD contract

 Worst of all classifications of any contract of a Customer is indicated in

CUSTOMER application for information

Slide 52
Workshop - 3

 Use User Menu > Credit Operations > Loans > Create Loans >
Corporate Loans
 Create a loan in LD for any of your customer
 Use the Category code 21053 defined in ASSET.CLASS.PARAMETER
 Loan amount USD 100,000 for 6 months at 5% fixed rate
 Get the record authorised
 Use User Menu > Credit Operations > Loans > Maintain Loans >
Manual Provisioning on Other Loans
 Make a manual provision of 20%
 Use an existing Asset Class
 Commit the Record

 Get the record authorised

Slide 53
Workshop – 3 Solution

Slide 54
Workshop – 3 Solution

Slide 55
Financial write off

 When a contract reaches financial write-off stage, provision amount is

set off against the loan asset
 Internal provision account debited and Loan asset is credited
 If a contract reaches FWOF stage and has not been fully provided for, then,
as a first step, provision is done for the remaining principal amount and
thereafter the actual write-off takes place

 For FWOF to happen automatically, the entire contract should have

become PD
 Option is also given to user to change the asset class and the provision
percentage manually, at the individual contract level

 When repayment is made under FWOF contracts, repayments are

debited from customer’s account and credited entirely to P&L item

Slide 56
PD Other features

Slide 57
Product features - Accounting

 Accounting entries passed for PD module are Non contingent in nature

 STMT.ENTRY and CATEG.ENTRY passed for Debit / Credit to Accounts

and PL heads respectively
Accounts include Customer accounts and Internal accounts
PL heads include Interest, Charges and Commission

 RE.CONSOL.SPEC.ENTRY passed on line for new PD records and for

repayment / closure using PD.PAYMENT.DUE

 Asset types: OVERDUEDB, NABDB, OVERDUEPR, NABPR, OVERDUEIN,

NABIN, OVERDUECO, NABCO, etc

 Transaction codes specified through PD.PARAMETER. Also uses

FT.COMMISSION.TYPE transaction codes

 RE.TXN.CODES : CRT, INC, DEC, RPY, ACC, WOF, CUS, APP etc

Slide 58
Standard enquiries and Reports in Model Bank

 Standard enquiries available include

 Outstanding Payments due - Customer wise outstanding

 Overdue items under a PD - Period wise outstanding

 List of financially written off PDs

 TRANS.JOURNAL Report
 LC related

Slide 59
System maintained Tables

 PD.BALANCES

 Records all financial movement and balance details of PDs

 Main calculation base for penalty accruals

 When PD.PAYMENT.DUE application is processed, past information of

PD.BALANCES is transferred at INAU stage to PD.BALANCES.SAVE and
historical information is transferred to PD.BALANCES. HIST after
authorising PD.PAYMENT.DUE record

Slide 60
System maintained Tables

 PD.RATES

 Diary of all rate changes that may be effected from time to time through
operation SCHEDULE

 When PD.PAYMENT.DUE application is processed, past information of

PD.BALANCES is transferred at INAU stage to PD.RATES.SAVE and
historical information held as multi value fields in PD.RATES after
authorising PD.PAYMENT.DUE record

Slide 61
System maintained Tables

 PD.REPAYMENT
 Stores all the repayment details of a PD
 Id is PD id followed by repayment date and sequence number of the
repayment within that date

 EB.CONTRACT.BALANCES
 Balance file containing details of consolidation key and Asset type wise
balances
 Principal outstanding amount and other related amounts 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 62
PD Dependency diagram

BASIC.RATE.TEXT PD.AMOUNT.TYPE
CUSTOMER BASIC.INTEREST PD.PARAMETER
CATEGORY INTEREST.BASIS APPL.GEN.CONDITION
ACCOUNT
CURRENCY
LIMIT PD
LD
MG FT.COMMISSION.TYPE
MM
MD
SWAP PD.BALANCES

DR PD.BALANCES.HIST

BL PD.RATES
PD.ADVICES
PD.REPAYMENT
PD.ACTIVITY

Slide 63
Summary

 We have so far seen

 The dependencies and linkages between PD module and T24 Core and
other applications

 Main business features of the Past due module

 Asset classification and provisioning in T24 for LD, MG and PD

Slide 64
Thank You

TEMENOS EDUCATION CENTRE

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