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Overview

Banking Cycle
Process Flow at Branch Level
Basic Features
Bank Products
Account Features and Restrictions
Transaction Set
End of Day Batch Process
Terminologies
Banking Cycle
Start of Banking Day

Open Branch Triggers the change of banking day


Over the Counter and Other Financial Transactions
Process Transactions Branch Delivery
Non-Financial Transactions
Processing of Outward checks sent to Central Clearing
End-of-day Balancing System
Tellers Total, Cash in Vault, Review of validation slips

Close Branch Triggers the end of branch transactions


Inward Return
Process Inward Check Inward Check Deposit
Returned Check and Other Cash Items (RCOCI)
End-of-day Batch
Service Charging
Management
Automatic Fund Transfer
Processing
System
Interest Computation and Posting
TD Accruals, etc.
End of Banking Day
PROCESS FLOW (Branch Level)
Open Branch
Back-Office and
Financial Transactions Non-Financial Transactions
Printing of Post Back-office
Late Check Processing Batch Reports Transaction

Cashier/Teller prepare for Downloading


Financial Transactions GL Balancing
of Data

Teller PICOS In
Process
Process Over Process Non- Outward Check
Teller Cash
the Counter Financial
Transfer/Request
Transactions Transactions Send to Central
Clearing
Cashier/Teller End-of Day Balancing

Turnover of Bkpr End-of-day


Teller PICOS Out Validation slip Balancing

Close Branch
Common Bank Product
Current Account
Non-interest bearing
Checkbook-based
Savings Account
Earns interest
Passbook or ATM based
Time Deposit
Interest bearing deposit, Interest rates vary depending
on the principal amount and term
Supported by certificate issued by the bank
Documentary stamp charge
New Product Features
Current Account
Passbook-based
Earns interest
Time Deposit
Passbook-based
Withdrawable interest
One passbook with several placements
Automatic Transfer Arrangement
Account Features & Restrictions
Joint Account
OR an account opened by two or more person; ANY of the
signatures is required.
AND an account opened by two or more person; ALL of the
signatures are required.

Payroll Account / Account with Waive Charge


No below maintaining charge

Tax Exempt Account


Interest credited to the account will not have withholding tax

Limited to Cash account


Only cash deposits and withdrawals are accepted by the bank until the
clients identity has been established
Transaction Set
FINANCIAL TRANSACTIONS
Cash Deposit
Allows the client to deposit cash to an account. Amount deposited is
available for withdrawal
Check Deposit
On-Us Check - checks drawn against the same bank
Off-Us Check - checks issued by an account holder of another bank
(1) Local; (2)Regional; (3)Inter-regional; (4)Out of Town Checks
Withdrawal/Encashment
Allows the client to debit the transaction amount to his/her account as
long as it is available
Debit /Credit Memo
Allows the bank personnel to debit or credit the transaction amount to
an account without the use of cash or check
Fund Transfer
Pertains to a type of debit and credit that allows transfer of a desired
amount from one account to another
Transaction Set
TIME DEPOSIT TRANSACTIONS
TD Placements
Refers to the opening of time deposit account
Pre-termination
Withdrawal transaction made on the TD account prior to its maturity
Redemption
Withdrawal of the placement upon maturity
Renewal
A time deposit account that has matured and interest is paid out and
the original principal is placed anew
Rollover
A time deposit that has matured and the interest forms part of the
new principal
Maintenance of Interest Rate Bulletin
Update the interest rate based on term and principal amount
Transaction Set
MISCELLANEOUS TRANSACTIONS
RECEIPTS
Bills Payment
This process is offered to institutions or companies to accept over the
counter collections/payments on their behalf.
Managers Check Issuance
Checks drawn by the bank upon itself negotiated within the locality
Demand Draft Issuance
Written order by a branch addressed to and made payable to another
branch outside the locality of the issuing branch
Bank Charges
Fees for the services offered by the bank
Checkbook Reorder
Counter check
Bank Deposit Certification
Safety Deposit Box Rental
Transaction Set
Telegraphic Transfer
Refers to remittances from one branch to another branch but the client
do not have any account with the branch where the funds are to be sent
Misc. Receipt (Others)
Refers to other services offered by the bank which are not part of the
above itemized transactions

PAYOUTS
MC/DD Encashment
Encashment of issued MC/DD
Cash Disbursement
refers to reimbursements and payments for expenses incurred by the
bank
ForEx Buy/Sell
Transaction Set
ACCOUNT INQUIRY / MAINTENANCE

Account Balance Inquiry


Account Transaction Inquiry
Check Inquiry
Open Account
Allows the user to input account details of a client who wishes to open
an account. A unique account number will be given for each account
opened
Customer Information File (CIF) Maintenance
Allows the user to create and maintain personal information of the
client. Account cannot be opened without linking it to a client ID
Account Profile Maintenance
Allows the user to update account details such as account name,
account features/restrictions, etc.
Close Account
Transaction Set
ACCOUNT INQUIRY / MAINTENANCE

Float Maintenance
Allows the user to increase/decrease or clear float days of a particular
check deposited to the account
Place/Lift Hold
Allows the user to place/lift an account balance on hold; balance on
hold cannot be withdrawn
Place/Lift Stop Payment Order (SPO)
Allows the user to place/lift SPO to a particular check; check with SPO
status will not be processed.
Transaction Set
OTHER TRANSACTIONS

Passbook Issuance
Checkbook Issuance
ATA Enrollment
A facility to define the source account(s) of an account with Automatic
Transfer Agreement.
Teller Cash Transfer/Request
Cash Transfer to Vault
Cash Request from Vault
Teller to Teller Transfer
PICOS In
PICOS Out
Tellers Total
Electronic Journal
Transaction Set
INCLEARING TRANSACTIONS
Inward Return
Handles the debiting of an account when a previously deposited check is
returned by the drawee bank
Inward Check Processing
Manual Inward Check
PCHC Batch Processing
RCOCI Processing
Handles processing of accounts with insufficient balances or technically
defective checks after posting of inward checks
RCOCI Maintenance
Pertains to processing of checks that are previously lodged to RCOCI.
Honored Check
Returned Check
Dishonored Check due to DAUD/DAIF
Dishonored Check Technically Defective
SPO - DAUD/DAIF
SPO Funded
Close Account
CONCEPT OF OUTWARD/INWARD CHECK
DAY 1 Outward
DAY 1 Bank2
Bank2 Outward Checks
Client (Bank2) will be sent
Attoclearing
PCHC cut-off, Bank2 PCHC will segregate
deposit
collates all check deposits and send checks to
the check
corresponding banks
Bank1 client to his DAY 2 Inward Bank2
issue a check Bank2 Day 3,
check will Inward DAY 1 Inward Bank1
(5,000) to a Account
be cleared Checks
Bank2 Client Debit Inward Checks
(Bank2) sent
check (Bank1) sent by
NO by PCHC
deposited PCHC
DAY 2 Outward Inward
Bank1 Return?
Outward Checks YES Check amount
(Bank1) will be sent Inward Check
will be debited Processing
to PCHC together DAY 2 to the account
with the Returned Bank1 will balance
Checks contact the
client for RCOCI Lodged
Honor Sufficient
Disposition to RCOCI
NO Check? NO Balance?

YES YES
Debit the check amount
including honor charge to
the account End of Process, check
will not be returned
Transaction Set
ADMIN TRANSACTIONS

Open/Close Branch
Calendar Maintenance
Tagging of banking holidays
Bank/Branch Maintenance
Define the branch details including Clearing cut-off time, transaction amount
threshold for Anti-Money Laundering, Local Currency, etc.
Vault Management
Used by cashier of the bank to process cash transfer/request to/from Cash
Center, Bangko Sentral ng Pilipinas (BSP) or other branch.
Group and User Maintenance
Transaction Limits
Staff Limits
Audit Log
Transaction Set
UTILITIES TRANSACTIONS

File Processing
(1)Store and Forward; (2)Late Check processing; (3) Payroll Processing
Data Download
(1)FoRex Rates; (2)Bank Charges
Back-up and Restore Facility
back-up and restore data
Parameter Set-up
Product Set-up
Product Details
Interest Computations
Product Charges
Transaction Set-up
Transaction codes and mnemonic
Effect on tellers total including the behavior of the transaction
Transaction Set
REPORTS
ON DEMAND REPORTS
This pertains to reports that are available to users any time of the day and will
reflect real time information and balances.
Processed SAF
Electronic Journal
Tellers Total
Branch Cash Position
Vault Transaction Journal
List of Accounts with Automatic Transfer Agreement
List of Accounts Exempted from Withholding Tax
List of Accounts Exempted from Below Minimum Charge
List of Accounts Limited to Cash
List of Dormant Account
List of Escheated Accounts
Bank Statement
Numerical Listing of Accounts
Alpha Listing of Accounts
Transaction Set
INWARD CHECK REPORTS
List of Processed PCHC Inward Check for the Day
List of RCOCI
START of DAY REPORTS
List of Processed Late Checks
List of Maturing TIME DEPOSIT
List of Un-acted Matured TIME DEPOSIT
END of DAY REPORTS
Daily Batch Report
Daily Service Charge Report
Uncollected Service Charge Report
Place/Lift SPO for the Day
Place/Lift Hold/Garnish for the Day
List of Account with Float Adjustment for the Day
List of Reactivated Accounts for the Day
List of Terminated CTD/SSA for the Day
Posted Transaction Report (CASA/TD)
List of Late Checks Deposited for the Day
Transaction Set
CONT. END of DAY REPORTS
Daily Batch Report
Miscellaneous Transaction Report
Summary of Balances
CASA Trial Balance
List of Outstanding CTD/SSA
Weekly
List of Opened Accounts for the Week
List of Closed Accounts for the Week
List of Maturing CTD/SSA for the Week
Monthly
List of Outstanding Service Charges for Collection
Outstanding SPO
Outstanding Hold/Garnish
Outstanding MC/GC/DD
Monthly Accrual Report
Accounts Moved to Dormant/Escheat for the Month
Breakdown of Deposits
END OF DAY BATCH PROCESS
Collection of uncollected service charges
process the debiting of uncollected charges to accounts

Automatic Transfer for Accounts with ATA


process the automatic funding to the receiver accounts with ATA that
falls below the required minimum maintaining balance

Accumulate Daily Balance


this process aggregates the accounts balance. The aggregate balance
shall be used in the computation of average daily balance and accrued
interest.

Compute / Post Interest


this process computes interest bearing accounts based on the defined
computation basis
END OF DAY BATCH PROCESS
TD Interest Computation
Compute interest of all outstanding TD accounts
Compute for AIP, WTAX, interest expense of maturing CTD/FSD and
book to the respective accounts.

Computation of Average Daily Balance


this process computes the average daily balance of each account
based on the accumulated daily balance.
New Account ADB for accounts opened during the month is
computed as accumulated daily balances divided by the difference of
the opening date and last calendar day of the month plus 1
Old Account ADB is computed as accumulated daily balance divided
by the calendar days of the month.

Accrued Interest Payable (AIP) Computation


END OF DAY BATCH PROCESS
Below Minimum Service Charging
this process charges active and dormant accounts which fall below the
required minimum balance depending on the computation basis as
defined in the parameters unless exempted from service charges.

Reclassification to Dormant / Escheat


Dormant All accounts that have been inactive as per bank-specified
period of time shall be reclassified from active to dormant account
status
Escheated All accounts that have been dormant as per bank-
specified period of time shall be reclassified from dormant to
escheated account status.

Automatic Closure of Active and Dormant Zero Accounts


this process automatically closes active and dormant accounts with zero
balances for a bank specified period of time.
END OF DAY BATCH PROCESS
FLOATS ROLLDOWN PROCESS
A process that automatically decreases float days of check deposited to
an account
Tuesday - Local Check Deposit
Date TranCd Debit Credit CurrBal AvailBal FltDay
Mon 10000 10000
Tue LocChk 5000 15000 10000 2

Tuesday End of Day batch processing, system performs floats rolldown


Date TranCd Debit Credit CurrBal AvailBal FltDay
Tue LocChk 15000 10000 1

Tuesday End of Day batch processing, system performs the rest of batch
processes
END OF DAY BATCH PROCESS
FLOATS ROLLDOWN PROCESS
Wednesday - After open branch

Date TranCd Debit Credit CurrBal AvailBal FltDay


Wed LocChk 15000 10000 1

Wednesday End of Day batch processing, system performs floats rolldown

Date TranCd Debit Credit CurrBal AvailBal FltDay


Wed 15000 15000 0

Wednesday End of Day batch processing, system performs the rest of


batch processes
Thursday - After open branch check deposited can be withdrawn
END OF DAY BATCH PROCESS
COMPUTATION OF AVERAGE DAILY BALANCE (ADB)
ADB is computed as accumulated daily balance divided by the calendar
days of the month.
Day Trancd Debit Credit CurrBal AvailBal Accum Accum
Cur Avail

Jan 1 1000 1000 1000 1000

Jan 5 Cash 5000 6000 6000 10000 10000

Jan 10 LocChk 1000 7000 6000 41000 40000

Jan 12 7000 7000 55000 53000

Jan 31 7000 7000 188000 186000

Accum Cur = ( 1000 * (jan 5 jan 1)) + ( 6000 * (jan 10 jan 5) + ( 7000 *
(jan 31 jan 10 + 1)
Accum Avail = ( 1000 * (jan 5 jan 1)) + ( 6000 * (jan 12 jan 5) + ( 7000 *
(jan 31 jan 12 + 1)
ADB based on Current Balance = 188000/31 6064.51
ADB based on Available Balance = 186000/31 6000.00
END OF DAY BATCH PROCESS
ADB COMPUTATION VARIATIONS
Accounts opened during the month
Day Trancd Debit Credit CurrBal AvailBal Accum Accum
Cur Avail

Jan 17 Cash 10000 10000 10000 10000 10000

Jan 20 Wdl 2000 8000 8000 38000 38000

Jan 31 8000 8000 134000 134000

ADB computed can be :


Accumulation / no. of days of the month
=134000/31
= 4322.58
Accumulation / no. of days from opening date
= 134000/15
= 8933.33
END OF DAY BATCH PROCESS
ADB COMPUTATION VARIATIONS
With back-dated transaction
Posted Jan 10, backdated Cash Deposit of 4000 for Jan 8
Day Trancd Debit Credit CurrBal AvailBal Accum Accum
Cur Avail

Jan 1 1000 1000 1000 1000

Jan 5 Cash 5000 6000 6000 10000 10000

Jan 10 LocChk 1000 7000 6000 41000 40000

Jan 10 Cash-BD 4000 11000 11000 45000 43000

Accum Cur = ( 1000 * (jan 5 jan 1)) + ( 6000 * (jan 10 jan 5)) +
11000
Adjusted Accum Cur = Accum Cur + (4000 * 2)
END OF DAY BATCH PROCESS
SERVICE CHARGE COMPUTATION BASIS
Balance Type to Consider
Current Balance
Available Balance
Balance Computation Basis
ADB
Lowest Balance
Frequency of Charging
Monthly
Quarterly
Semi-Annual
Annually
Required Minimum Balance
Execution Cycle
Monthly
Quarterly
Annually
END OF DAY BATCH PROCESS
Service Charge Computation Method
Fixed
Dormancy Service Charge = 25.00 per month
Below Minimum Service Charge = 100.00 per month
Rated
Pre-termination charges
Usually a percentage of the interest computed
END OF DAY BATCH PROCESS
Service Charge Computation Method
Tiered
Base Charge = 50
Lower Limit Upper Limit Charge
1000 10000 100
10000.01 100000 200
100000.01 Above 300

Amount to be computed = 15000


Charge = 50 + 100 + 200
= 350
END OF DAY BATCH PROCESS
Service Charge Computation Method
Threshold
Base Charge = 50
Lower Limit Upper Limit Charge
1000 10000 100
10000.01 100000 200
100000.01 Above 300

Amount to be computed = 15000


Charge = 50 + 200
= 250
END OF DAY BATCH PROCESS
Service Charge Computation Method
Multiple
RCOCI Charges
Base Charge = 2000 (1,000 for Issuer & 1,000 for Drawee)
Per Multiple = 40000
Per Day Multiple Charge = 200
1. Returned Check Issued = 15000 Within 40,000
Charge = 2000 + 200
2. Returned Check Issued = 55000 Twice the 40,000
Charge = 2000 + (2 * 200) multiple
END OF DAY BATCH PROCESS
INTEREST COMPUTATION BASIS
Balance Type to Consider
Current Balance
Available Balance
Balance Computation Basis
ADB
Lowest Balance
Base Year to use in computation
365
360
Minimum lowest balance allowed for interest to be computed
Minimum ADB allowed for interest to be computed
END OF DAY BATCH PROCESS
INTEREST COMPUTATION BASIS
Frequency of Interest Computation
Daily
Monthly
Quarterly
Annually
Frequency of Interest Posting
Monthly
Quarterly
Annually
Frequency of Interest Compounding
Monthly
Quarterly
Annually
END OF DAY BATCH PROCESS
INTEREST RATE COMPUTATION METHOD
Fixed
Tiered
Base Rate = 1
Lower Limit Upper Limit Add On Rate
1000 10000 1
10000.01 100000 2
100000.01 Above 3

ADB Computed = 15000


Rate= 1 + 1 + 2
= 4%
END OF DAY BATCH PROCESS
INTEREST RATE COMPUTATION METHOD
Threshold
Base Rate = 1
Lower Limit Upper Limit Add On Rate
1000 10000 1
10000.01 100000 2
100000.01 Above 3

ADB Computed = 15000


Rate= 1 + 2
= 3%
END OF DAY BATCH PROCESS
INTEREST COMPUTATION CONSIDERATION
During accruals,
include the first day, exclude the last day OR exclude the
first day, include the last day
Computation of Interest
Computed Daily
Daily Interest = (EOD Bal * Rate)/ Base year
MTD Interest = MTD Interest + Daily Interest
Monthly Computation
Monthly Interest = (Accumulated Daily Balance * Rate)/ Base year
END OF DAY BATCH PROCESS
Automatic Transfer Agreement
Higher combined ADB requirement ( every ATA pair )
Source Account
One or more source accounts possible
Can be a source account to any number of destination accounts
Source account is usually a savings account
Debiting hierarchy
Debit according to highest available balance
Debit according to highest current balance
Destination Account
Usually a current account
Allows zero maintaining balance
Can not be used as a source account
END OF DAY BATCH PROCESS
EXTRACTION OF NOBOOK ITEMS
Date Trancd Credit Debit
1/15/08 NCSHDP 1000
1/16/08 NCHKDP 2000
1/16/08 NCSHDP 1000
1/17/08 NWDL 5000
1/19/08 NWDL 7000
1/25/08 NCSHDP 2000

Date Trancd Credit Debit


1/31/08 CMEXTR 6000
1/31/08 DMEXTR 12000
TERMINOLOGIES
Banking Day also referred to as business day or working day

Cut-off Time time defined in the parameter set-up to determine if


check deposited is still a regular check transaction or a late check
transaction

Float Day days before a check deposited becomes


available/withdrawable

Late check checks deposited today but exceeds the bank defined
cut-off time; posted next banking day

Mode of payment manner of payment used during transaction;


can either be cash, on-us check, off-us check, debit to account or
credit to account
TERMINOLOGIES
Outward Checks other bank checks deposited to a bank that will be
forwarded to Phil Clearing House Corp (PCHC)

Inward Checks checks issued by account holders of the bank deposited


to another bank

No Book over the counter transactions without presenting a passbook

Value Date transaction that supposed to be for a previous banking day


but was posted on the current banking day

DAUD Drawn Against Uncollected Deposit

DAIF Drawn Against Insufficient Funds


TERMINOLOGIES
Account Status refers to the status of an
account defined by the bank
Active an account with regular financial transaction
Dormant an account that do not have financial
transaction for 2 years
Escheat an account that do not have transaction for
10 years
Closed an account with zero balance; closing of an
account can be triggered by an account holder or the
bank.
TERMINOLOGIES
Interest Type manner of interest used for the interest
computation of the account

Minimum Maintaining Balance balance needed to be maintained


in order not to have a below minimum service charge

Balance to Earn Interest balance needed in order to earn an


interest

Balance type balance used in order to compute for the interest;


also used to get the below minimum charge
Current Balance refers to the total account balance
Cleared Balance = Available + Hold
Available Balance = Current Balance Float Hold
TERMINOLOGIES
Computation Basis refers to the manner used in
computing the interest; also used to know if an account
falls below the minimum balance. This is used together
with the balance type

Average Daily Balance (ADB) = computed as Summation of


Daily Balance over Number of calendar days

Lowest Balance the lowest ending balance of an account


for the month

Base Year refers to the denominator to used in the


interest computations can either be 360 or 365.
TERMINOLOGIES
Tax rate withholding tax deducted to products earning
interest
Interest Rate rate given to an account used for interest
computation
Term used for Time deposit placement; term defines
the number of days of TD placements becomes matured.
Maturity Date it is computed as the Placement date +
Term days 1
Bank/Service Charge fees used across the system;
charges/payment for bank services
FOR DEMO CONTACT DETAILS:
ANDREA ANDI YLAGAN CASTRO
(+63) 916 250 2503
(632) 515 06 46
andrea.castro888@yahoo.com.ph
Company Rider
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