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T3IBSAL - InclusiveBankingSuite Lending Operations

The document discusses group loan disbursements and repayments in InclusiveBankingSuite. It describes how bulk disbursements and repayments can be performed for multiple group members at once using parameterized screens. Key steps and parameters for group disbursements and repayments are outlined, including the use of configuration tables to customize the process for each institution. Workshops provide examples for performing manual group disbursements and repayments.

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PRAVIN JOSHUA
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0% found this document useful (0 votes)
288 views110 pages

T3IBSAL - InclusiveBankingSuite Lending Operations

The document discusses group loan disbursements and repayments in InclusiveBankingSuite. It describes how bulk disbursements and repayments can be performed for multiple group members at once using parameterized screens. Key steps and parameters for group disbursements and repayments are outlined, including the use of configuration tables to customize the process for each institution. Workshops provide examples for performing manual group disbursements and repayments.

Uploaded by

PRAVIN JOSHUA
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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InclusiveBankingSuite

Lending Operations
T3IBSAL

Agenda

01 Loan Disbursements - Groups

02 Loan Repayment

03 Loan Maintenance

04 Loan Closure & Write off

Capture
New Loan

Close Disburse
Loan Loan

Effect Manage Loan


Changes to Repayments
Loan
Group Disbursements

Bulk disbursement of Group Loans supported in InclusiveBankingSuite using the Group


disbursement screen EM.FT.BULK.INPUT,DISBURSE
Parameter set up table, EM.FT.BULK.PARAM can be accessed through the path All in one > System
Parameters>Groups>Group Bulk Payments Param

Customer accounts of
this category are
made available for
selection. The first
account is defaulted
on the field

EM.FT.BULK.INPUT,DISBURSE is the version used for disbursement of group


loans. Disbursements of members of the same group can be posted in bulk from a
single screen.
To allow flexibility, the table EM.FT.BULK.PARAM enables the configuration of
the group disbursement screen by each institution.
Manual Disbursement – Group

For the system to disburse group loans at the same time for all members, the user
must follow these steps:
1. Open Single Group View
2. Click on Bulk Operations
3. Under Shortcuts (left hand side) click on Group disburse
4. On Group Disburse screen, click on New Group Disburse (right hand side).
Note that all relevant values are defaulted.
5. Set Disburse field (left column) to Yes for all members whose loans must be
disbursed
6. Commit the record. System generates all entries for all loans and sets loan
status to Current in the SCV Loans tab.

For further details on how to disburse and collect loans, refer to the training module
T3IBSAL.
Group Disbursements
The group Disbursement screen is automatically defaulted with all arrangements in “not
disbursed” status.
To skip disbursement of some group loans, set the ‘Disburse’ field to No.
To disburse partially (depending on product set up), key in the partial disbursement
amount.
 Group disbursement is currently supported through FT. It is possible to disburse the loans
through an internal account if desired. The category code of the internal account
should be an allowed category in EM.FT.BULK.PARAM
 When authorized, the FT records are generated via OFS. Any unprocessed FTs can be
reviewed and resubmitted using the “Resubmit FT” function.
Workshop 1 – Group Disbursements

Use All in One role page > Teller > Loan operations > Group Disbursement or Single
Group View > Bulk Operations > Group Disburse >New Group Disburse
 Perform a group disbursement for your Group application generated previously through
Group Loan Origination.
Use All in One role page > Teller > Loan operations > Enquiries > Completed Group
Disbursements or Single Group View > Bulk Operations > Group Disburse
 View the status of bulk disbursements and drill down on the right to view the details
Workshop 2 – Solution

1
Workshop 2 - Solution

The
arrangements
are disbursed
T3IBSAL

Agenda

01 Loan Disbursements - Groups


02 Loan Repayment
03 Loan Maintenance
04 Loan Closure & Write off

Capture
New Loan

Close Disburse
Loan Loan

Effect Manage Loan


Changes to Repayments
Loan
T3IBSAL

AA Lending Transactions: Repayments


Repayments can be grouped into 4 types
• Scheduled Repayment of regular due amounts, for instance the monthly installments on a
mortgage loan.
• Payoff: where the client pays off the entire loan before the maturity date
• Principal Decrease: where the client prepays a part of the outstanding capital
• Credit to the arrangement: an advance payment where – if allowed in the product – the
client can pay an amount that is higher than the due amounts and where the excess is set
aside for future due amounts
Group collections (payments) functionality is supported in InclusiveBankingSuite

Manual Repayments:
The four Repayment options
under the Funds Transfer or
Teller application
T3IBSAL

Repayments - Scheduled Repayments


With scheduled repayments we mean payment of due amounts on the due
date or of overdue amounts
If the arrangement is linked with a servicing account through the Settlement
product condition, repayments will be done automatically
If no funds are available on the servicing account payments will become
“overdue” following business rules defined in the product which are based on
the bank’s policies
Repayment of outstanding amounts will be done in a predefined order, for
instance first Penalty Interest, then Charges, then Principal Interest, then Capital
Repayment of Interest, Charges and Capital can be done from different
accounts
Repayment can also be done manually through Funds Transfers and Teller
screens
Workshop 2 – Manual loan repayment
Using AA Loans > Loan Enquiries > Find arrangements (LIVE) or AIO RBHP > Loans AA >
Loans
 Choose an existing arrangement that you have created in previous workshops and look
at the financial details in the Arrangement Overview
 Perform a repayment transaction on the outstanding principal amount using Teller by
drilling down on the right arrow to select repayment operation type.
 Look at the financial details in the Arrangement Overview including bill status
Workshop 2 - Solution

Option 1
T3IBSAL

Workshop 2 – Manual loan repayment

Option 2
Group Payment Parameters – EM.FT.BULK.PARAM
Parameter table used to configure Group Disbursements and Group Collections.
Parameters can be defined system wide or branch wise
 Table ID can be SYSTEM or Company Id
Two bulk types are currently supported; Group Collections Screen (GCS) and DISBURSE
FT.MASTER.OFS.VER is the version to be used to post the individual FT payments using
OFS
Each payment item on the collections screen is parameterized In the PAYMENT.TYPE
sub-value fields

Group repayments can be posted in bulk from a single screen.


EM.FT.BULK.INPUT,GCS is the version used for repayments posting per group.
To allow flexibility, the table EM.FT.BULK.PARAM enables the configuration of
various group repayments screen by each institution.
Group Payment Parameters – EM.FT.BULK.PARAM

Payment type
 GCS repayment items are configurable and
not hardcoded
Allowed categories
 Accounts of this category code are filtered
and made available on the drop down list of
payment Accounts
Default Credit Account
 Allowed parameters are Yes, No and Loan.
For Loan repayments, LOAN should be
selected in order to display all the loan
accounts of the Customer. If YES is selected,
the first Account of the ALLOWED.CATEG will
be auto-populated.
Default Loan repayment Amount
 Whether or not to default the loan amounts
due.
FT OFS Version
 Bank specific versions can be used here
instead of the Default version.
EM.FT.BULK.INPUT
The group collection details are parameterized on EM.FT.BULK.PARAM. On the collection
screen, the following details are to be populated.
 Group number and name
 Group member Items with PROCESS.PAYMENT set to Yes will be processed. Select No to skip a
member.
 Parameterized Payment types are available on drop down list
 Loan repayments are made into the loan Account. All Customer loans are presented on the
screen.
 All Loan accounts of the member automatically defaulted. Savings accounts defaulted based on
parameter set up.
 Group account auto populated from G.ACCOUNT.NUMBER field on MCB.GROUP application
Workshop 3

Choose existing group loans that you have created in previous workshop and;
 View the group collection sheet
 perform a group repayment action.

Use All-In-One RBHP > Teller > Loan Operations > Group Collection or Single Group View >
Bulk Operations > Group Collection >New Group Collection

(Prior to this workshop, trainer will run COB to the next due date for bill generation)

Use All-In-One RBHP > Teller > Loan Operations > Completed Group Collection or Single
Group View > Bulk Operations > Group Collection
View the processing status of the repayment items.
Workshop 3 - Solution
T3IBSAL

Repayments – Overpayment

Some loan products may offer the possibility for the customer to “overpay”, i.e. pay
more than the scheduled due amount
This functionality is only available through manual repayments as the automatic
settlement of repayments through the Settlement product condition will only perform
payments of amounts due
Depending on the settings in the product, an over payment may lead to a principal
decrease or to the arrangement being credited with an “unallocated amount”
In the case of an unallocated amount, any future (regular) due payments will be
made from this amount first

An AA Repayment can be performed


through the Funds Transfer or Teller
application
T3IBSAL

Repayments - Principal Decrease


The Principal Decrease payment rule allows the repayment of part of the
outstanding capital before the maturity date of the loan
Principal Decrease is an Arrangement Activity and can be effected
using an FT or Teller transaction
The system can automatically recalculate either the future repayment
amounts or the new loan term after a Principal Decrease if the loan
product has been set up to do so

AA Principal Decrease can be performed


through the Funds Transfer or Teller
application
T3IBSAL

Workshop 4 - Principal Decrease


Use AA Loans > Loan Enquiries > Find arrangements (LIVE) or All-In-One RBHP > Loans AA >
Loans

Choose an existing arrangement that you have created in previous workshops and look
at the financial details in the Arrangement Overview
Perform a Principal Decrease on the outstanding principal amount
Have the Principal Decrease transaction authorised
Look at the financial details in the Arrangement Overview
T3IBSAL

Workshop 4 - Solution
The current outstanding
principal amount is 5,019.64 in
this example
T3IBSAL

Workshop 4 - Solution

Principal is decreased by
USD 3,000 and
instalments recalculated
T3IBSAL

Early Redemption of a Loan - Payoff


The AA Payoff payment rule allows for a total early redemption of a loan
arrangement
In addition to the outstanding capital, there may also be accrued interest
and charges to be settled during an early redemption
In order to calculate the total redemption amount the Simulation engine is
used
The amount calculated in the Payoff simulation is then used to pay off the
loan through the AA Arrangement Activities and can be done via an FT or
Teller transaction

An AA Payoff can be performed through


the Funds Transfer or Teller application
T3IBSAL

Early Redemption of a Loan - Payoff


 A Payoff can be requested at any point during the life of the loan arrangement
 The effective date can be either today’s system date or can be forward dated
 A Payoff statement is produced for information for the customer
 An early redemption fee can be applied automatically in case of an early repayment
of a loan contract
 Payoff calculates the dues for outstanding Capital, Interest and Charges linked to the
Arrangement
 If any overpayments had been made previously to the contract these will be taken into
account for the calculation of the Payoff amount
T3IBSAL

Workshop 5 - Payoff

Use AA Loans > Loan Enquiries > Find arrangements (LIVE) or All-In-One RBHP > Loans AA > Loans

Choose an existing loan arrangement


Open the Arrangement Overview and check the current outstanding amounts
Use the Request Payoff option (in New Activities) to calculate the total redemption amount
Once the amount has been calculated, effect a Payoff for this arrangement through the AA
Arrangement Activity (FT) screen
T3IBSAL

Workshop 5 - Solution

In this particular loan


arrangement a number of
payments are due and
overdue

Request Payoff will


calculate the total
amount due for the loan
redemption
T3IBSAL

Workshop 5 - Solution

Request the Payoff Calculation

Specify the Payoff date

Confirm to calculate
T3IBSAL

Workshop 5 - Solution
1. The Simulation Runner kicks off

2. Click on the search icon to


view the payoff amount payable
T3IBSAL

Workshop 5 - Solution

User only needs to enter the Payoff can be done through


payoff amount as shown on the Teller or Funds Transfer
the payoff statement application
Workshop 5 - Solution
T3IBSAL

AA Lending Transactions: Overdue payments

When scheduled or due payments are not met on time, AA can manage the overdue
payments based on the overdue rules set up in the AA product which model the bank’s
Terms and Conditions
AA allows for overdue payments to go through various stages/periods of overdue such
as Grace, Delinquent, Non-Accrual Basis, based on the number of days that bills remain
unpaid, or based on the number of payments not met
Penalty interest will be calculated on overdue payments as configured in the AA loan
product
T3IBSAL

Overdue Payments
The Debit Rule in the Settlement arrangement condition defines how the AA loan product
reacts when not enough funds are available in the servicing account
 Full: the entire amount due will be taken from the servicing account even if this will cause the
account to be overdrawn
 Partial: the available amount will be taken from the servicing account and the remaining
unpaid part is moved into overdue status.
 None: if the full amount is not available, no amount will be taken from the servicing account and
the entire due amount is moved into overdue status
T3IBSAL

Overdue Payments

 When payments become overdue they will have an overdue status as defined in the
setup for the loan product.
 Typically a bank may accept a Grace period where no penalty interest is applied, a
Delinquent period where Penalties are applied and a Non Accrual Basis period where
interest income would be suspended.
 AA automatically assigns these statuses to overdue amounts and provides the tools to
keep track and manage the overdue amounts
 AA will also automatically send out reminder notices at predefined intervals in respect of
the overdue status
 Fees/Charges may be attached to payments becoming overdue
T3IBSAL

Overdue Payments – Details Available

The overdue status is


clearly marked in
the arrangement
overview

The overdue amount


The penalty interest accrued

Due and overdue details

Overdue fees
T3IBSAL

Overdue Payments - enquiries

Under Bills we find all


payments that have
become due with their
overdue status

Average
status Start date of overdue No of days
status amount for overdue
status
T3IBSAL

Overdue Payments – Advices

Advices generated
when payments
become overdue or
reach a new overdue
status
Bulk File Upload

 The File Upload functionality is hinged on the T24 Data Formatting Engine (DFE) which is a common interface
framework designed in such a way that it supports both uploading of messages/files received from external
system into T24 as well extract data from T24. The application supports delimiter based files and fixed position
messages/ files.
 Provides a mechanism through which bulk files may be uploaded from external applications e.g. Excel, and
processed in the InclusiveBankingSuite. Examples include uploading of staff loan repayments in bulk deducted
at source through the payroll.
 Both financial and non-financial files can be uploaded with the appropriate configuration in place

 The following parameter tables are required for File Upload Utility to function:

 EB.FILE.UPLOAD.PARAM
 DFE.PARAMETER
 DFE.MAPPING
 EB.PARAM>ALL-EM.FILE.UPLOAD
 EB.FILE.UPLOAD.TYPE

The InclusiveBankingSuite File Upload functionality supports the day to day


operations of the Institution by providing a mechanism through which bulk files
may be uploaded from external applications e.g. Excel, and processed in the
InclusiveBankingSuite. Examples include uploading of staff loan repayments in
bulk deducted at source through the payroll. Both financial and non-financial files
can be uploaded with the appropriate configuration in place, as described later in
this document.
The File Upload functionality is hinged on the T24 Data Formatting Engine (DFE)
which is a common interface framework designed in such a way that it supports
both uploading of messages/files received from external system into T24 as well
extract data from T24. The application supports delimiter based files and fixed
position messages/ files.
Bulk File Upload

File Upload parameter tables are accessible through the path:


o Role Based Menu>All In One>System Parameters>File Upload
File Upload Parameterisation>EB.FILE.UPLOAD.PARAM
 The upload directory path is specified in EB.FILE.UPLOAD.PARAM. The record SYSTEM contains the
path to where the tcserver/tocf will upload the file to the system. The upload path specified here
should be the same as the one defined earlier for tcserver listener (tcserver.xml file)
<UPLOAD_PATH> tag.
 The record SYSTEM is delivered with the EM update. Please amend the record and specify paths
for the institution under implementation.
File Upload Parameterisation> DFE.PARAMETER
 This is the overall parameter table to
define the file type, mode of transaction
and corresponding upload path. This file
holds the details of the system wide
parameters that are required to run the
DFE Framework.
• BNK-EM.FU.FUNDS.TRANSFER record is
delivered with the EM update. Please
amend the record and specify paths for
the institution under implementation.
• In a Multi Company/book environment,
company mnemonic pre-fixed record
must exist for for every company that will
use file upload functionality e.g. CNK-
EM.FU.FUNDS.TRANSFER. Based on that
prefix Company Code field is defaulted
in DFE.PARAMETER.
File Upload Parameterisation> DFE.MAPPING
 This table is used to define the mapping for the
upload file.
 The ID of this table is used in the field
DFE.MAPPING.ID in the DFE.PARAMETER table.
 The data which is received by the DFE uses the
Mapping Table to match each field from within that
raw data (from the file uploaded) with system field.
Mapping table is used to match columns from the
file with fields from the IBS table that data is
uploaded to. (e.g. FUNDS.TRANSFERS,
CUSTOMER)by
File Processing

The File Upload functionality can be accessible through the path:


o Role Based Menu>Home>File Upload>Upload New File
File Upload

 The EB.FILE.UPLOAD application is used to upload new files. Files can be uploaded from the
user’s local machine or from a server location.
 The default value on the Processing Type field is a parameter maintained in EB.PARAM>ALL-
EM.FILE.UPLOAD record
 The format, columns of the file to be uploaded (e.g. Excel) should match the parameters
defined in EB.FILE.UPLOAD.TYPE and DFE.MAPPING respectively.
 Upon committing the record, the file is automatically uploaded and processed. For example,
FT records are created in INAU status awaiting authorization
 The service BNK/EM.DFE.FILE.PROCESS triggers the file upload process and should be set to
AUTO.
File Upload

The authorization icon in the Processed Files enquiry drills down to a fast path enquiry
that is used to authorize or delete highlighted records in bulk.

47
File Upload

Failed records can be reviewed and resubmitted through the Failed Uploaded records enquiry
File Upload
 The list of fully processed files grows over time and may need to be archived from time to time.
Fully processed files can be archived through the delete icon shown below. All records in the
files must either be authorized or deleted, before file archiving. Where this condition is not met,
an error message is displayed.
T3IBSAL

Agenda

01 Loan Disbursement

02 Loan Repayment

03 Loan Maintenance

04 Loan Closure, Write off & Recovery

Capture
New Loan

Close Disburse
Loan Loan

Effect
Manage
Changes to Loan
Loan Repayments
T3IBSAL

AA Lending Transactions: Loan Maintenance


Any modification to an arrangement is done through Activities
Activities are actions performed on loan arrangements and allow us to make
modifications to the various elements of existing arrangements
Examples of typical modifications:
 A change in loan principal amount
 A change in Interest
 A change to the loan duration
 Adjusting a bill amount

Modifications to an arrangement are performed from the Arrangement


Overview, under New Activity
In InclusiveBankingSuite Principal increase (Top-up) and change in loan
duration (reschedule) operations can be processed using Direct Loan Input or
Loan Origination Modules.
T3IBSAL

AA Lending Transactions – Loan Maintenance


For each element in the loan arrangement – such as Principal Interest or the
Repayment Schedule - certain actions can be performed
For instance for the Term Amount element we could change the loan duration, or
the repayment frequency in the Repayment Schedule
If we initiate a modification through the New Activity link in the loan Arrangement
Overview we will see all options available to us.
T3IBSAL

AA Lending Transactions: Loan Maintenance

Elements for
which
Arrangement
Conditions can
be changed Activities that can be performed
T3IBSAL

AA Lending Transactions: Loan Maintenance

For each element and each activity we have three options:

Apply modification today Apply Simulate the


modification at modification
a future date
T3IBSAL

Workshop 6 – Loan Maintenance

Use All-In-One RBHP > Loans AA > Loans > New Loan

 Create a new loan arrangement for a loan amount of USD 13,000 over 1
year. Have the arrangement authorized

 Recall the loan arrangement and change the loan term to a new duration
(for example from 1 year to 2 years).
 Get the arrangement authorized
 Observe the changes made to the activity log
 Observe any changes made to the Repayment Schedule

 Make another change as follows:


 Change the Principal Interest effective 3 months from todays’ system date
 Get the arrangement authorized
 Observe the changes made to the activity log
T3IBSAL

Workshop 6 - Solution

Commitment USD 13,000 and


Term 1Y

In Settlement, indicate
the settlement
account(s)
T3IBSAL

Workshop 6 - Solution

Once the arrangement is authorised we enter the


Arrangement Overview in order to make the change

Select Change Term under


Term Amount and indicate
the change to be made
today
T3IBSAL

Workshop 6 - Solution

The arrangement is
opened to allow
modifications

The element we choose to


modify is opened and the
fields for term and maturity
date are available for
editing
T3IBSAL

Workshop 6 - Solution

Note: we need to have the


modification authorised. The
arrangement will still be
found under the Authorised
arrangements!
T3IBSAL

Workshop 6 - Solution

Note that a modification to an


arrangement needs to be
authorised before we can do
any other modifications!

The event (activity) that leads


to the change

The
Repayment
Schedule
will be
updated
T3IBSAL

Workshop 6 - Solution

Note the Change Term activity


in the Activity Log
T3IBSAL

Workshop 6 – Solution part 2

Future-dated modification

Modify the same arrangement but


this time choose Interest Calculation
as the item to modify.
T3IBSAL

Workshop 6 - Solution
T3IBSAL

Workshop 6 - Solution
Top-up/Reschedule in InclusiveBankingSuite
In InclusiveBankingSuite, principal increase and term change activities can also be processed
using the Direct Loan input application.

When Reschedule or Top-up action is selected on the Direct Loan input record, the system
presents a list of all the existing loans of the customer on a drop down list for the user to select
the loan to be amended.
A pop enquiry is also auto-generated showing the current details of the loan.
Top-up operations may be with or without changes to the term of the loan contract. To
amend the term of the loan, enter the newly requested value on the requested term field.
Workshop 7 – Top-up operation in InclusiveBankingSuite

Use All in One RBHP> Loans AA > Loans > New Loan
 Select a loan previously created for your customer.
 Process a Top-Up of USD 1,500 and increase the loan term by 3 additional installments e.g.
from 6M to 9M
 Get the record authorized
 Disburse the top-up amount to your client.
Workshop 7 - Solution

Before Top-up/reschedule action. Total


commitment is 4000 and Term is 12M
Workshop 7 - Solution
Workshop 7 - Solution

After Top-up/reschedule action. Total commitment is


increased to 5,500 and Term to 15M
Workshop 7 - Solution
Quiz – 1
1.Settlement instructions are effected against the first Customer’s account
a. Of the category code defined in the settlement stage of the IBS product builder.
b. Of the category code defined in the global product parameters file
c. Of category code 7313
2.Flat interest is calculated on which source balance?
a. TOTCOMMITMENT
b. CURACCOUNT
c. CURCOMMITMENT
3.Weekly flat loans are configured using which of the following interest day basis for
interest calculation?
a. A
b. E
c. G
4.Which of the following statements is correct?
a. Principal decrease is effected automatically when the prepayment is credited in the
settlement account with the right transaction code.
b. Principal decrease is effected automatically when the prepayment is credited in the loan
account with the right transaction code.
c. Both statements are correct.
T3IBSAL

Agenda

01 Loan Disbursement

02 Loan Repayment

03 Loan Maintenance

04 Loan Closure, Write off & Recovery

Capture
New Loan

Close Disburse
Loan Loan

Effect Manage
Loan
Changes to
Repayment
Loan s
T3IBSAL

AA Lending Transactions: Loan Closure

For every loan arrangement T24 opens an account. This account is used to store
and manage all of the loan’s balances: outstanding capital, due amounts,
charges
When the loan reaches maturity or if the loan is redeemed before the maturity
date, the underlying account needs to be closed
The Loan Closure functionality allows the closure of the underlying account
based on one of two criteria:
 Closure when the maturity date is reached
 Closure when the balances of the account are zero
Manual loan closure is only allowed where CLOSURE.METHOD is set to MANUAL
or NONE.

LENDING-CLOSE-ARRANGEMENT – Once the arrangement is identified for


closure based on the closure settings in the closure product condition, LENDING-
CLOSE-ARRANGEMENT is triggered. This activity is automatically triggered if
the closure method is selected “AUTOMATIC” and needs to be triggered manually
if closure method is selected “MANUAL”.
T3IBSAL

AA Lending Transactions: Loan Closure

Loan Closure would normally happen automatically at Maturity (if set up to close when
maturity is reached) or when all balances are zero (which could be at Maturity or when
the loan is redeemed early)
Loan Closure can also happen if a loan is cancelled within the initial cancellation period

Access to Closure through New Activity

Close Arrangement can be effected manually

LENDING-CLOSE-ARRANGEMENT – Once the arrangement is identified for


closure based on the closure settings in the closure product condition, LENDING-
CLOSE-ARRANGEMENT is triggered. This activity is automatically triggered if
the closure method is selected “AUTOMATIC” and needs to be triggered manually
if closure method is selected “MANUAL”.
Arrangement Write Off
Arrangement Write off is supported by the Balance Maintenance Property class
which allows the following functions to be executed:
Write off arrangements
 All balances in the arrangement are written off (both current and due)
Write off balances
 Only current balances are written off , outstanding bills remain.
Write of Bills
 Only issued bills are written off, current balances remain.
The contra entries are posted to the category code defined in
AC.ALLOCATION.RULE. Write off category must be defined for every payment
property in allocation rules.
The same category code should be parameterized for provisioning.
Write Off Procedures
Balance Maintenance is
accessible through the New
Activity link in Arrangement
Overview

View relevant balances


before write-off
Write Off Procedures
Write Off Procedures
Commit the transaction

Approve the input

Check the results


Write off Procedures
Customer records with Written off loans are flagged
Where provision amounts exists, the written off account is flagged as Financially
Written off. Otherwise the account is flagged as Write off.
Workshop 7 – Write off

Use All in One RBHP > AA Loans to write off one of the loans created in the previous workshops.
Workshop 7 - Solution
Workshop 7 - Solution
Workshop 7 - Solution
Loan Written Off

The report can be accessed using All in One > Loans AA> Arrears/Provisioning>Loans written off
The written off loans report displays a list of all loans written off including details such as the write
off amount, loan balance as at the time of write off, number of days in arrears up to write off
date and the provision amount as at the write off date.
The report can also be displayed per Account officer or per Group
Written off Loan Recovery

After loans are written off, the system provides access to the items written off, using
contingent accounts.

Two additional accounts are required to record and maintain access to written off items:
 A contingent account for the client will be created by the system to warehouse the amounts
written off. The mnemonic of this account will be (W+WOF Loan Account Number + W).

 A contingent control contra account to warehouse the second leg of all written off amounts.
Contingent control accounts may be opened per customer or per branch based on parameter
set up.
GIC.BD.PARAMETERS – WOF Recovery Parameters
Role based Menu > All in one Page > Parameters > General menu > Administrator > AA provisioning &
AA Products > AA provisioning and WOF parameters WOF parameters
GIC.BD.PARAMETERS – WOF Recovery Parameters

A system wide parameter table used to maintain WOF loan recovery parameters.
Recovery category
 The Profit and Loss where recovery funds are to be credited as income.
Contingent Customer Category
 Category code used to open the customer contingent account where written off items are
maintained
Contingent Internal Category
 Category code used to open the contingent control account for contra entries.
GIC.BD.PARAMETERS – WOF Recovery Parameters

Contingent Account Level


 Parameter used to determine whether Contingent control accounts are to be maintained at
customer level or branch level.
Customer Control Account Category
 The category code under which customer contingent control accounts are to be opened.
Recovery Order
 The order in which recovery funds are to be applied on written off balances. Balances are
maintained property wise on the WOF loan contingent account.

Either contingent internal category or customer control account category becomes


mandatory based on the parameter selection on contingent account level field.
Balances are maintained property wise on the WOF loan contingent account, as
contained in the balance maintenance arrangement condition at the time of write
off.
GIC.BD.PARAMETERS – WOF Recovery Parameters
When loans are written off, AA updates the arrangement status to Close or Pending Closure

Written off accounts can be viewed on the enquiry EM.AA.WOF.LOANS.REPORT


The AA contract and account underneath are then closed by the service
BNK/EM.WOF.PROCESS
 It takes 2 COBs to close an account.
The process also opens a contingent account for the customer using the category code
maintained on the parameter table GIC.BD.PARAMETERS.
If Contingent control accounts are to be maintained per customer, a control account will
be opened for the customer with a written off loan.
 If the institution elects to maintain the control account per Branch, an Internal contingent control
account will be opened if none exists.

For contingent accounts to be automatically opened, the contingency account


product need to be set up. This is done by creating a
Contingent Accounts
For contingent accounts to be automatically opened, an account product for recovery
accounts need to be set up using the category code defined in GIC.BD.PARAMETERS. The
category code must fall within the contingent category range defined on
ACCOUNT.PARAMETERS

The category code should be marked as Contingent in the CATEGORY table.

Please refer to the Accounts training manual on creation of Account products


Contingent Accounts Opening

 The process is initiated when a loan write off activity is authorized. The arrangement is then
set to PENDING.CLOSURE or CLOSE.

 The AA arrangement and underlying account are closed by the service


BNK/EM.WOF.PROCESS. It takes 2 COBs to close the Account.

 The Loan Recovery Account (Contingent Account) is opened in the loan currency using the
WOF loan account as the alternate ID.

 If not already present, a Control account in loan currency is opened for the customer(if
GIC.BD.PARAMETER is set to CUSTOMER) or for the branch(if GIC.BP.PARAMETER is set to
BRANCH) – this is also a contingent account

 The Contingent account is debited and the contingent control account is credited.
 The OFS messages are stored in a work file EM.WOF.RECOVERY.WRK showing the results and
failure reasons in any.

T24 core does not allow passing of accounting transactions between contingent and
non contingent accounts.
Recovery Account Update

In addition to transferring the WOF balance to the contingent account, WOF balances are
stored on the Account property wise as contained in the balance maintenance property at
the time of write off.
Workshop 8 – WOF loan recovery

Use All in One role RBHP > Customers> Search Customer > Single Customer View >
Customer Portfolio
 Open the Single Customer View of the customer whose loan was written off in Workshop 7.
 Observe the newly opened contingent account
 On the Customer contingent account, drill down to observe the account details.
Workshop 8 - Solution
Workshop 8 - Solution

Note the new contingent


account automatically
opened.

View the written off


balances updated property
wise
WOF Loan Recovery Transactions

Role based menu > all in one page > Teller>Transactions>Cash Deposit into Written off
loan
WOF Loan Recovery Transactions
Recoveries can be made in Cash, Cheque or Account transfers
 Accounting entries: Dr Cash, CR Bad debit recovered PL Category to recognize the bad debt
recovered as income. A second entry, Dr Contingent Control Account, Cr Customer contingent
Account is posted automatically via OFS.

The Loan written off account may be used as an alternate to the recovery account.
By keying in the loan account number, the system automatically populates the
recovery account. The correct debit cash account is auto populated based on the
debit currency selected.
WOF Loan Recovery Transactions
ID of secondary FT passed via OFS is stored on the field PAYMENT.DETAILS of the primary FT and
vice versa.
When full amount is paid off, the Recovery account is closed.
Control account also closed if at CUSTOMER level and there are no other written off loans to be
recovered for the customer.
WOF & Recovery Entries Illustration
Start WOF

Provision Entries
Dr. PL Categ (10,000)
Cr. Provision Acct (10,000)

WOF Loan – 10,000

Dr. Provision Acct – 10,000 Dr. Loan Cont Acct – 10,000


Cr. Loan Acct – 10,000 WOF Balance – Cr. Branch Cont Acct – 10,000
10,000

Start Recovery

Recover Loan –
2,000

Dr. Teller Acct – 2,000 Dr. Branch Cont Acct – 2,000


Cr. PL Categ – 2,000 WOF Balance – Cr. Loan Cont Acct – 2,000
8,000
Workshop 9 – WOF Loan Recoveries

Use All in One Role RBHP > Teller > Cash deposit into Written off Loan
 Record a loan recovery cash deposit
 Commit the record

Use All in One role RBHP > Customers> Search Customer > Single Customer View >
Customer Portfolio
 Drill down to Account details of the Customer’s contingent Account and view the
updated balances.
Solution – Workshop 9
Solution – Workshop 9

Note the updated balances on


the balance type fields based
on parameter set up.
Solution – Workshop 9
Reversal of Recovery Entries

Recovery entries can be reversed using the transaction reversal version available on the
menu.
 Account history restore is required before reversal of transactions in closed recovery accounts.

Upon reversal, property wise balances on the account are recalculated.


WOF Loan Recovered

The report can be accessed using All in One > Loans AA> Arrears/Provisioning>WOF Loans
Recovered
The written off loans report displays a list of all loans written off including details such as the write
off amount, the recovery account and the amounts recovered so far.
The report can also be displayed per Customer, per Account officer or per Group
WOF Loan Recovered

The report can be accessed using All in One > Loans AA> Arrears/Provisioning>WOF Loans
Recovered
The written off loans report displays a list of all loans written off including details such as the write
off amount, the recovery account and the amounts recovered so far.
The report can also be displayed per Customer, per Account officer or per Group
WOF Loan Customers With Credit Balances
The report can be accessed using All in One > Loans AA> Arrears/Provisioning>WOF Loan Customers
with Cr Balances
The written off loans report displays a list of Customer with written off loans yet with other Accounts
carrying credit balances.
Additionally, whenever transactions are attempted on any account of a customer with WOF Loans,
an override message is displayed to the user.
Other Enquiries
Outstanding Payments due report

Closed/Matured/Cancelled Loans
T3IBSAL

Congratulations ! Capture
New Loan

Close Disburse
Loan Loan

You have completed the


AA Lending Transactions
course
Effect Manage
Changes to Loan
Loan Repayments
Summary

You have learnt about :


 Creating new arrangements, arrangement overview, arrangement conditions.
 Loan operations; Loan disbursement, Loan repayment, loan maintenance, Loan Closure, Loan
write off and recoveries
 Using enquiries relevant to this module
 AA Loans functionality and configuration specific to InclusiveBankingSuite

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