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R14_UG_Profit Distribution System.pdf
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TEMENOS Headqua
rters SA.
TEMENO
S
T24Islam
ic
Banking
User
GuidePr
ofit
Distribut
ion Syst
em
(PDS)
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Profit
Distribution
System (PDS)
Page
2
of
40
Table of
Contents
Preface ...........
.........................
.........................
.........................
.........................
.......................
4
Overview ........
.........................
.........................
.........................
.........................
.......................
4
Prerequisites...
.........................
.........................
.........................
.........................
...................... 5
Parameter Set
up ...................
.........................
.........................
.........................
................. 5
Product Type
-
IS.H.PRODU
CT.TYPES,
ISB
........................
.........................
............. 5
Products -
IS.H.PRODU
CTS, ISB
........................
.........................
.........................
........ 5
Pool System
Parameter -
IS.PDS.SYSTE
M.PARAMET
ER, INPUTT
......................
5
Pool
Definition -
IS.PDS.POOL.
PARAM,
INPUTT
.........................
.........................
..... 6
Pool
Weightage -
IS.PDS.WEIG
HT, INPUTT
.........................
.........................
........... 11
Customer wise
special
weightage
–
IS.PDS.CUST
OMER,
INPUTT
......................
11
Category wise
Parameter
–
IS.PDS.CATE
GORY,
INPUTT
........................
............ 12
Tenor wise Pa
rameter
–
IS.PDS.TENO
R, INPUTT
.........................
.........................
. 13
Getting Starte
d ......................
.........................
.........................
.........................
......................
14
Finance Contr
acts .................
.........................
.........................
.........................
............... 14
Mudaraba
Investment
deposits...........
.........................
.........................
........................
14
Mudaraba Acc
ounts ...............
.........................
.........................
.........................
.............. 16
Wakala Depos
its ....................
.........................
.........................
.........................
.............. 17
Shareholder e
quity ................
.........................
.........................
.........................
............... 19
PDS Simulatio
n .....................
.........................
.........................
.........................
............... 19
Simulation of
profit
calculated
between any
two dates
........................
.....................
19
Input spread
and Special sp
read
........................
.........................
.........................
........ 27
PDS Distributi
on ....................
.........................
.........................
.........................
............... 28
Simulation
using
projected
balances
for the future d
ate..................
........................
. 29
Enquires .........
.........................
.........................
.........................
.........................
.....................
30
Simulation
Summary
–
Contract wise
.........................
.........................
........................
30
Simulation
summary
–
Balance
bracket wise ...
.........................
.........................
........ 31
Distribution Su
mmary ............
.........................
.........................
.........................
.............. 32
Asset &
Liability balan
ce ..................
.......................
.......................
.......................
......... 33
Income gener
ated from Ass
ets of the Pool
........................
........................
................. 34
Average
balance/
Minimum bala
nce of the
contracts
–
Pool wise.......
................... 3
4
Pool
Movement Tra
cker .................
.........................
.........................
.........................
..... 36
خطأ! اسم الملف غير معين.
Profit
Distribution
System (PDS)
Page
3
of
40
Limits .............
.........................
.........................
.........................
.........................
......................
36
Delivery ..........
.........................
.........................
.........................
.........................
.....................
36
Services..........
.........................
.........................
.........................
.........................
..................... 3
6
Accounting
Process..........
.......................
.......................
.......................
.......................
......... 37
Troubleshootin
g .....................
.........................
.........................
.........................
..................... 4
0
Glossary .........
.........................
.........................
.........................
.........................
.....................
40
Index ..............
.........................
.........................
.........................
.........................
......................
40
Profit
Distribution
System (PDS)
Page
4
of
40
Preface
The scope of
the guide is to
elaborate on
the
functionalities
available in
profitdistributi
on system
[PDS]. The
reader needs
to have the
basic
understanding
inIslamic
banking, T24
–
LD.LOANS.A
ND.DEPOSIT
S,
MM.MONEY.
MARKET
and ACCOUN
T application.
Overvie
w
T24 Profit
Distribution
System [PDS]
module
covers the
mechanism
used
forcalculation
and
distribution of
profit by
Islamic banks.
It is fully
integrated to
T24system
taking
advantage of
the
LD.LOANS.A
ND.DEPOSIT
S,
MM.MONEY.
MARKET, AC
COUNT modu
les. It support
s definition an
d monitoring o
f Mudaraba d
eposits,Wakal
a deposits
and Savings
products.
These
products can
be defined
using
theparameter
setup.Feature
s are:
Creation of M
ultiple
pools with uni
que
parameter set
up with:
o
Categories for
Profit
source and ex
penses for
each Pool ID
o
Assigning of
Profit sharing
ratio, Accrual
rate and
Mudarib share
foreach Pool
ID
–
Tenor
–
Currency
o
Profit
distribution
frequency
set up for
Mudaraba
accounts
o
Shareholder
contribution
for each Pool I
D
o
Zakah for the
actual distribut
able
profit on each
Mudaraba
deposit/Mudar
aba accounts.
o
Withholding T
ax for the
actual
distributable
profit
on each Muda
rabadeposit/
Mudaraba
accounts.
o
Special weigh
tage at the
Customer leve
l
Assigning Po
ol ID
to finance and
deposit contra
cts during
contract
booking
Amending
Pool ID
assigned
to finance and
deposit contra
cts any
time duringthe
month
Defining Profit
equalization
reserve
(PER) as Amo
unt
or Percentage.
Utilizethe
funds
in PER accoun
t if required in
the
subsequent m
onths.
Defining Inves
tment risk rese
rve (IRR)
as Amount
or Percentage.
Utilize thefund
s in IRR
account
if required
in the subsequ
ent months.
Modify/ adjust
the profit rate
calculated duri
ng simulation.
Payment
of additional pr
ofit as HIBA.
Accruals
on a daily
basis using th
e provisional
rate and pass
adjustmentent
ries based
upon the
actual rate on
the date of
distribution.
Usage of Last
distributed
profit rate for s
ubsequent
month
accruals.
Running simu
lation
and distributio
n for each Poo
l ID.
Running
simulation
and distributio
n
by merging mo
re than one po
ol together.
Customized e
nquiries to che
ck the results.
Profit
Distribution
System (PDS)
Page
5
of
40
Prerequi
sites
Install PDS
pack as per
the
details provide
d in
Installation gui
de.
Parameter
Setup
Product
Type -
IS.H.PRODU
CT.TYPES, IS
B
User has to
create new
product type
for PDS
Products - I
S.H.PRODUC
TS, ISB
User has to
create new
product code
for PDS. This
will be used
while
generating
theaccounting
entries.
Pool System
Parameter -
IS.PDS.SYST
EM.PARAME
TER, INPUTT
The first level
file in most
T24 modules
is a system
parameter file
which
provides
theuser with
the option to
specify the
product code
of PDS
module and
the
transactiontyp
es to be used
during
accounting.
The profit
distribution
frequency
used
fordistributing
profit to
Mudaraba
accounts
can be
parameterized
at the
“SYSTEM”
level.The
accrual
income
category
parameterized
is used for
passing the
accrualadjust
ment entries
during
distribution.
Profit
Distribution
System (PDS)
Page
6
of
40
Pool Definiti
on -
IS.PDS.POOL
.PARAM, IN
PUTT
This file is
used to define
the parameter
setup for new
Pool ID.
Profit
source catego
ry of the
finance
contract along
with
its sub product
codeis
inputted in the
PROFIT.CAT
EG field.
o
For example,
if the user
wants to
consider only
the profit
earned
fromvehicle
Murabaha
contracts as
income to this
Pool ID. Then,
Field PROFIT
.CATEG is
inputted with
the
PL category
used foraccru
al of finance
contracts.
[LMM.INSTAL
L.CONDS>>P
L.O.SET.IR..C
UR].
Field PROD.
CATEGORY
is inputted wit
h the category
of theMurabah
a finance
contract.
[LD.LOANS.A
ND.DEPOSIT
S>>CATEGO
RY]
Field PROD.
CODE
is inputted
with the
product code
of VehicleMur
abaha.
[LD.LOANS.A
ND.DEPOSIT
S>>LOAN.TY
PE]
Expenses
category of th
e finance
contract along
with its sub
product
code isinputte
d in the
EXPENSE.CA
TEG field
along with the
EXPENSE.PE
RC needsto
be considered
for this Pool.
Categories of
the Mudaraba
deposit/ Muda
raba savings
account used
forbooking/
allocating
contracts to
this pool is
inputted in this
CATEGORY
field.Multiple c
ategories can
be captured. V
alue
in this field is
validated
whileassigning
weightages.
Categories of
the Wakala de
posit contract
used for booki
ng/ allocatingc
ontracts to this
pool is
inputted in this
WAKALA.CAT
EGORY field.
Multiplecatego
ries can be
captured.
Value in this
field is
validated while
assigningweig
htages.
Profit
Distribution
System (PDS)
Page
7
of
40
Currency
of the
Mudaraba
deposit/ Muda
raba savings a
ccount/
Wakaladeposit
used for
booking /
allocating
contracts to
this pool is
inputted in this
CURRENCY
field. Value in
this field is
validated while
assigning
weightages.
Profit
payable categ
ory to be para
meterized
in PROFIT.PA
Y.CATEG field
.User is
allowed to
input a Valid
Internal categ
ory in this
field. An
internalaccoun
t to be created
by using this
category and
PDS product
code. In
orderto avoid
the locking
collision
ACCOUNT>>
HVT.FLAG to
be set as
“YES” or
Sub accounts
to be created
in the lower
releases.
During
distribution the
profitamount
calculated is
parked in this
account
before
distributing to
the
Customeracco
unt.
Profit reversal
category to be
parameterized
in PROFIT.RE
V.CATEG field
.User
is allowed to
input a
valid P&L cate
gory. This field
is used
whilereversing
the excess
profit accrued
during early
maturity of
Mudaraba
deposits.
Profit expens
e
category to be
parameterized
in PROFIT.EX
P.CATEG
field.User is
allowed to
input a
valid P&L
category. This
field is used
as
profitexpenses
to distribute
the profit
amount.
Suspense cat
egory is for fut
ure purpose.
HIBA
pay category
to be paramet
erized
in HIBA.PAY.
CATEG field.
User isallowed
to input a valid
P&L category.
This field is
used as HIBA
expenses
todistribute the
HIBA amount.
Shareholder
expense categ
ory to be para
meterized in S
H.EXPENSE.
CATEGfield.
User is
allowed to
input a valid
P&L category.
This field is
used to
debitthe
Shareholder
expenses.
Shareholder
equity categor
y
to be paramet
erized
in SH.EQUITY
field. Userhas
to
manually com
pute and input
the
shareholder
equity
amount for
thisPool. This
amount is
considered as
shareholder
contribution
for this pool.
Investment ris
k reserve [IRR
]
category to be
parameterized
in IRR.CATEG
field. User is
allowed to
input a valid
internal
category. An
internal
account tobe
created by
using this
category
and PDS prod
uct
code. This acc
ount is usedfor
accumulating
and
dispersing the
IRR amount
whenever if ne
cessary.Invest
ment risk reser
ve
can be inputte
d at the pool
level as
percentage
oramount
using
IRR.PERC/
IRR.AMT field.
Profit
equalization
reserve [PER]
category to be
parameterized
in PER.CATE
Gfield. User is
allowed to
input a valid
internal
category. An
internal
account tobe
created by
using this cate
gory and
PDS product
code. This acc
ount is
usedfor accum
ulating and dis
persing the
PER amount
whenever if
necessary.
PERcan be
inputted at the
pool level as
percentage or
amount using
PER.PERC/P
ER.AMT field.
Early settle
category is us
ed
to parameteriz
e the internal
category used
duringearly
maturity of the
Mudaraba dep
osit.
EM reverse
profit category
is used to par
ameterize the
PL category
usedduring
reversal of
profit amount
during early
maturity of
Mudaraba
deposit.
Mudarib
fee category
to be paramet
erized
in MUD.FEE.
CATEG field.
User isallowed
to input a valid
P&L category.
This field is
used to park
the
Mudaribfee
calculated
during Pool
distribution.
Profit
Distribution
System (PDS)
Page
8
of
40
Zakah,
Withholding T
ax [WHT]
to be paramet
erized in TAX
field. This
can beparame
terized in TAX
and
TAX.TYPE.C
ONDITION.
More
information on
settingup TAX
records
available in
ACCOUNT
user guide
.
During
distribution the
Zakahand
WHT is
computed on
the profit
amount.
These
amounts are
debited
fromthe
customer
account after
crediting the
entire profit
amount.
Pool currency
is parameteriz
ed
in POOL.CCY
field. Pool calc
ulations aredri
ven by
considering
the base
currency
chosen in this
field. For
crosscurrency
calculations
the exchange
rate is
picked from
the currency
market setin
CURRENCY.
MKT field.
Transaction
types
used for Profit
distribution, Pr
ofit
reversal is par
ameterizedin
PFT.DIST.TX
N.TYPE and P
FT.REV.TXN.
TYPE field res
pectively.
User can up
Profit
distribution fre
quency at the
Pool level by c
hoosing suitab
lefrequency in
MUD.PDS.DI
ST.FREQ field
. During
Mudaraba
deposit
bookingthe
frequency will
get defaulted
from the
Parameter. If
required it can
beamended at
the contract
level.
User can
set up
Profit capitaliz
ation
frequency at t
he Pool level
by
choosingsuita
ble frequency
in
AC.PFT.DIST.
FREQ field.
Profit amount
for
Mudarabasavi
ngs accounts
is capitalized
based upon
the
frequency par
ameterized int
his field.
Option
available for
setting up the
frequency at
the SYSTEM
levelusing
IS.PDS.SYST
EM.PARAME
TER. Precede
nce is given to
the
Pool levelsetu
p. If it is not
available then
only SYSTEM
level frequency
is considered.
Profit basis
by using
which the
profit calculati
on to
be performed
is chosen
inthe
INTEREST.BA
SIS field.This
Pool ID is
available for
user selection
in the Finance
and Deposit/
Savingsbooki
ng versions.
Based upon
the selection
contract is
assigned to
that Pool.
Duringsimulati
on income
generated
from those
finance
contracts is
allocated to
that
pool.Separate
pool needs to
be created for
assigning the
Non
–
Sharia
contracts to
thatpool.
Highlight
Add Note
Share Quote
Profit
Distribution
System (PDS)
Page
9
of
40
Profit
Distribution
System (PDS)
Page
10
of
40
!خطأ.خطأ! اسم الملف غير معين.خطأ! اسم الملف غير معين.خطأ! اسم الملف غير معين.خطأ! اسم الملف غير معين
اسم الملف غير معين.
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Profit
Distribution
System (PDS)
Page
11
of
40
Pool Weight
age -
IS.PDS.WEIG
HT, INPUTT
This file is
used to setup
the weightage
for each Pool
ID, Category
and
Currency.The
ID of the file is
Pool ID
–
Category
–
Currency.Wh
ere,Pool ID is
validated
against the
Pools created
in
IS.PDS.POOL
.PARAM.
‘
ALL
’
isallowed to
be inputted if
the user wants
to define the
same
weightage for
all the Poolsin
IS.PDS.POOL
.PARAM.Cate
gory is
validated
against the
categories
defined
inIS.PDS.POO
L.PARAM>>C
ATEGORY
field.
‘
ALL
’
is allowed to
be inputted if
the userwants
to define the
same
weightage for
all the
categories
belonging to
the Pool ID.
“Currency” is
validated agai
nst the
currencies defi
ned in
IS.PDS.POOL
.PARAM>>CU
RRENCY
field.Ex:Pool1
–
21016
–
USDPool3
–
ALL
–
AED ALL
–
ALL
–
SAR
Calculation
amount band
‘From’ and
‘To’ can be
parameterize
d in the field
PRIN.FROM
and PRIN.TO
fields.
Weightages
for each band
is inputted in
the
fieldBAND.W
EIGHT,
Mudarib share
for that band
can be
inputted in
BAND.MUD.S
HARE,Invest
ment risk
reserve as
percentage
can be
inputted in
BAND.IRR.PE
RC,
Profitequalizat
ion reserve as
percentage
can be
inputted in
BAND.PER.P
ERC,
and Accrual r
ate as
percentage
can
be inputted
in ACCR.RAT
E field.
Multiple
bands canbe
created for
each ID.
Customer
wise special
weightage
–
IS.PDS.CUS
TOMER, INP
UTT
This file is
used to
provide
special
weightage at
the customer
level. During
simulationthe
weightage for
each contract
is identified by
using
IS.PDS.WEIG
HT. If there is
aparameteriza
tion in this file
to provide
special
weightage to
customer then
theweightage
given in this
file is used for
calculation.
User can
input a special
weightagefor
a Customer ID
in the CUST.
WEIGHT field.
خطأ! اسم الملف غير معين.خطأ! اسم الملف غير معين.
Profit
Distribution
System (PDS)
Page
12
of
40
Category wis
e Parameter
–
IS.PDS.CAT
EGORY, INP
UTT
This file is
used to setup
the category
level
parameters.Th
e ID of the file
is either
PoolID.Catego
ry or
Category.Whe
re,
“Pool ID” is
validated
against the
Pools created
in
IS.PDS.POOL
.PARAM. ALL
is
allowed to be
inputted if the
user wants to
define the
same setup
for all the
Pools
inIS.PDS.PO
OL.PARAM.
“Category” is
validated
against the
categories
defined in
IS.PDS.POOL
.PARAM>>CA
TEGORY
field. ALL is
allowed to be
inputted if the
userwants to
define the
same setup
for all the
categories
belonging to
the Pool ID.
The balance
types needs
to be used
for calculating
the profit amou
nt
forMudaraba
deposits/
Wakala
deposits/
Mudaraba
savings
accounts can
beparameteriz
ed in this file
using
CALC.BALAN
CE.TYPE
andDIST.BAL
ANCE.TYPE
fields.
Currency
wise minimum
balance
required
for Mudaraba
savings accou
ntsparticipatin
g in the Pool
calculation
and
distribution is
set in the
fieldCURREN
CY and
MIN.BALANC
E. Minimum
balance can
be
parameterized
formultiple
currencies. If
the account
does not meet
the criteria
defined in
thisfield then it
is neglected
for calculation
and
distribution.
Minimum dep
osit period in d
ays
for Mudaraba
deposits partic
ipating in theP
ool calculation
and
distribution is
set in the field
MIN.DEP.PER
IOD. Ex. 30D
خطأ! اسم الملف غير معين.خطأ! اسم الملف غير معين.
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