ASSETMonitoring @CBS

HELPLINE CENTRAL HELP DESK 011-23719093,23323680 23323703,32035327 011-32035328 23710021(PBX) 23323697(FAX) GENERAL MANAGER(IT) 011-23323141 DY.GENERAL MANAGER(IT) 011-23717407 ASSISTANT GENERAL MANAGER(IT-CBS) 011-23718045 CHIEF MANGER (IT-CBS) 011-23765159 SR.MANAGER/MANAGER 011-23705948 Emalid-servicedesk@pnb.co.in Information Technology Division Head Office: 5, Parliament street New Delhi

CBS Knowledge Series

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CBS Knowledge Series

FOREWORD
Dear members of PNB Parivar, We have a tradition of accomplishing the given task with zeal and innovation. As you all know, management of our advances portfolio plays a very vital role in ensuring healthy and profitable growth of the Bank. Thus, it is absolutely necessary to keep our loans & advances portfolio healthy and performing. This requires very close and continuous monitoring of each loan account at every level i.e. Branch, Circle and Head Office. Our entire business transaction process is driven on a robust and dependable technology platform-CBS with Finacle application software. In order to facilitate monitoring the health of our loan assets the 'Team CBS' in the Information Technology Division, Head Office has introduced many customised menu options for managing this task effectively. In order to give a thrust and focus on the management of irregular and NPA accounts, a series of customised modules have been introduced in the last one year. These modules facilitate the management of assets throughout its life cycle. All these details have now been consolidated and compiled in a Booklet by the 'Team CBS' for the guidance of the field functionaries under the CBS Knowledge Series. I am happy to release this Ready Reckoner ASSET-MONITORING@CBS which will enable the field functionaries to effectively use the system for managing recovery of irregular and NPA accounts. I am sure that by using the system generated tools, our monitoring and management of irregular and NPA accounts will be more focused and bring in the desired results as we go along.

(K.R. KAMATH)

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CBS Knowledge Series

Life Cycle of Loan A/c

Handling in CBS
Contents
Start
Sr. Subject no. 1 Flow Chart of Asset Account 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Irregular/Overdue Account Advance Intimation Reminder/Report Recovery Statement LETGEN/LAODR Type of Demands Morotorium Data Correction Repyament Schedule Report Type of Loan Accounts Rephasement Common Operational Discripencies Calculation of Memoranda Dues Kitty in Written off Accounts Reports Related to NPA Other Reports Page no. 1-4 6 8 9 10 11 12 12 12 12-14 14 15-17 18 18 19 19-23

Pre sanction appraisal Sanction of loan Opening of account and disbursement of loans and Advances (Role of CBS starts here) Regular Account

No

Recovery within due date

Yes

(Standard Account) All dues recoverd

No

Closure of A/c

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CBS Knowledge Series

Life Cycle of Loan A/c

Handling in CBS
B Irregular Account * SMA period starts Need follow-up $ C
Identification as NPA Need close follow-up

Recovery received within the period of SMA

No

Recovery of overdue
Yes

Yes

Upgrade

A
No

No

C
* For Identification of Irregular A/cs Irregular Report PNBREP -1/8 SASCL Report LAOPI menu option Monthly statement of recovery - PNBRPT-3/28. Half Yearly Statement of Recovery - PNBREP-1/6

If reason of default beyond control of the borrower

Yes

@Rephasement/ Restructuring of A/c

No
$ For Follow up LAODR menu option LETGEN Menu option

Recovery as per new repayment schedule

Yes

@ with prior permission of competent authority

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CBS Knowledge Series

Life Cycle of Loan A/c

Handling in CBS
D Down grade of Asset classification

Lending is one of the basic activity of the Banking Industry. Profitability depends upon the quality of portfolio. Capital requirement is also related with the quality of Assets of the Bank. The better asset quality increases the profitability and improve the ratio of capital requirement to risk weighted asset. To understand the sequence of steps for better asset quality management, foregoing flow chart describes the life cycle in simple way. In CBS number of functionalities/reports are made available to achieve the ultimate objective of effective monitoring of loan portfolio. CBS systems facilitates management of account after the sanction. The loan/facility account is opened and disbursement is made in the CBS system on its sanction. The due care is to be taken while capturing the data at this stage to ensure appropriate/expected behavior of the system and account and to avoid irregularity reflected in any account due to wrong selection of Scheme code, GL sub head, interest code, Moratorium period and other details required during opening of account with emphasis on 'V' Details data feeding is to be given for correct MIS.
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Willful defaulter Legal Action/WLA Sarfaesi DRT Lok Adalat

OTS/Compromise

Recovery as per OTS/ Compromise/ Decree

Yes

No

Write-Off Sale of Asset

Closure of A/c

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CBS Knowledge Series

The account runs regular if customer deposit the due payments in the accounts or operate the account regularly. Whenever the normal/expected behavior of the account deviate from normal/expected pattern extra vigilance/care is required from the user to keep the accounts regular/performing. The irregularities in the account can be checked from followingrepo rts: a) Irregular Report PNBREP -1/8 i. ii. It is available for Sol/Set wise. It can be generated amount also. on the limit

c) SASCL Report a. SASCL report is made available on monthly basis from DC under 'Interest Report' link under SOL_ID='000000' available on the first page of Finacle.It is a pre generated data file and can be improted in the excel sheet(Circle wise data is available) In addition branch DBA has option to Run menu option 'SASCL Trial mode - N' in MIS server and customized Report from PNBRPT-26/1can be generated by any user as and when required(both menu option be run same day). If Trial mode is set as 'Y' Report can be generated from PNBRPT-26/5 by the same user only (DBA). Branch DBA also has option to run SASCL menu in Live server with 'Trial Mode-Y' and report can be generated through DAYRPT-24/5 by the same user only. Accounts appeared as 'STANDARD ASSET in the report generated from PNBRPT-26/1 or 26/5 or 24/5 after running of SASCL menu option with Overdue account only flag='Y', falls
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b.

iii. It can be generated on the Sector also like Agriculture /SME/Retail Lending Schemes/Other/All iv. It is also available on the period basis like upto 30 days, upto 60 days and more than 60 days b) Daily Outstanding report PNBRPT 3/7 i. This report help in monitoring the credit portfolio as it provide the irregular amount immediately if the demand remains unsatisfied.

c.

d.

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CBS Knowledge Series

under the SMA(Special mention account) category of accounts. Please also refer related guidelines revised vide itd/cbs/ cir/no.121/2010 dated 22/11/2010. For inquiry of overdue loan a/cs M e n u option LAOPI It is available in Live (Production server) for one account at a time only, range of accounts can be checked in MIS (Report Server) After knowing the position of accounts and extent of irregularity, follow up with the borrower/ customer may be required the same has been facilitated in CBS and details are as follows: PNBRPT 3/ 23. Advance Intimation Letter in Loan A/Cs To ensure the recovery, advance intimation letter to borrower may be sent with this menu. PNBRPT 3/34. List of A/cs where next installment is due within 91 days. The intimation of next instalment due may be sent to the borrower and it refer to overdue amount, if any. To expedite the process of recovery and to facilitate the monitoring, a list of a/cs where

instalment is due within next 91 days can be generated as per the guidelines circulated vide ITD Cir. No. 16/2008 dated 19.02.2008. Recovery in Loan accounts:The demands raised is the amount due from the borrowel account and it is adjusted from the recovery made in the account. The adjustment of Demands is done in chronological order of date as per the banks guidelines. The demand raised first by the system adjusted first whenever credit made in the account thereafter. The demand adjusted once is remain adjusted during the currency of the account. The issue related to demands are explained in details in next few pages. Beside the half yearly statement of recovery of advances, a monthly report is also provided to know the monthly demand & recovery for the branch PNBRPT 3/28. Monthly recovery of Advances. statement of

PNBREP 1/6. Half Yearly Statement of Recovery of Advance Follow up of loan a/cs: To facilitate the recording of follow up action
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CBS Knowledge Series

initiated by the branch, a new functionality 'LETGEN' was introduced vide ITD Cir. No. 58/2009 dated 09-07-09. This new functionality is complete work flow which facilitate the recording of various action beside generating the reminder to borrower/guarantor. The two new reports have also been customized and made available through menu option PNBRPT -3, to know the follow up action taken by the branch: PNBRPT -3/44 Report of Follow up notice issued for a Loan Account Report of Follow up Notice Issued for loan accounts by Sol Between given dates

Health of the loan account depends upon the amount due and overdue position of demands made in the account and its adjustment. The different types of demand and the events which trigger their generation are as follows: Demands are divided into three categories namely: u Principal demand (PRDEM) u Interest Demand Normal & Penal (INDEM & PIDEM) u Charges demand - Bank charges & Other charges (BCDEM & OCDEM) Except the principal demand (PRDEM), all other demands are generated with the debit transaction in the loan account which is based on the flow_id fed during transaction. Principal demand (PRDEM) is generated based on the data fed in the account in 'E' details while opening the account i.e. based on flow start date, no. of flow, flow amount and frequency. Some times principal demand is not generated due to various inconsistency- A report PNBRPT 3/52 as per the guidelines circulated vide ITD Cir.No. 90/2009 dated 25.11.2009 will facilitate the same. 11

PNBRPT -3/44a

The first report lists all the actions initiated for a particular loan a/c, whereas the second report lists the action taken by the branch for all LAA type of a/cs between two dates. This will serve as pointer to the follow up action of the branch and the Circle offices can make use of it for monitoring the branch activity. The reminder to the customer based on the overdue position can be generated through menu option LAODR also.
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CBS Knowledge Series

Moratorium period - Detailed guidelines to deal with the issue of moratorium circulated vide ITD Cir. no. 41/2007 dated 06.07.2007. Data correction - Detailed guideline for data correction was circulated vide ITD Cir. No. 54/2008 dated 11.08.2008.43/2009 dated 04/05/2009. To strengthen the monitoring, a report to ascertain the repayment schedules of all loan a/c is available at: PNBRPT 3/ 40. Report on repayment schedule details in LAA accounts Loan accounts can be divided in to five types, in the system: ? EI type: The amount of repayment is fixed taking the principal and interest in to the consideration. ? EI with moratorium period: The amount of repayment is fixed taking the principal and interest (loan period) in to the consideration but the interest during the moratorium period is not considered in repayment schedule. To include the interest charged in the account during the moratorium period, interest needs to be
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capitalized and new repayment schedule is created. It is to be done through REPHASEI menu on the expiry of moratorium period. Non-EItype: Repayment schedule is ? created with the principal amount only. Interest amount is to be recovered as and when charged in the account. Simple Interest loans to Staff: Staff ? Housing loan(Scheme code - TLSHL) and Staff vehicle loan (Scheme code TLSVL) having condition of repayment of Interest portion after repayment of principal and interest is not to be charged on the interest portion. Interest Demand effective date and interest on Interest flag is important for these schemes. Education Loan: Interest is to be charged ? with simple rest during the moratorium period and kept aside. After the moratorium period, interest charged during the moratorium period is to be capitalized into principal amount and compounding of interest starts. Repayment schedule is to be created after moratorium period.
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CBS Knowledge Series

Detailed guidelines to handle the education loan and staff housing/ vehicle loan were circulated vide ITD Cir. No.68/2010 dated 20.07.2010. Transfer of interest liability to main loan a/c Interest liability needs to be transferred to loan account when repayment start in education loan and principal is repaid in staff housing/Vehicle loan. To know such a/cs a report is available at PNBRPT 3/30. An Indicative report on LAXFRINT Overdue The guidelines were circulated vide ITD Cir.No. 31/2007 dated 01-05-2007. Rephasement Rephasement in CBS refer to recreating the repayment schedule. Rephasement needs to be done when moratorium period is allowed and with approval wherever required. The reports related to rephasement due/done are available as under: PNBRPT 3/35. List of accounts where rephasement has expired or is due in next 31 days PNBRPT 3/51. Statement for Rephased loan A/c PNBRPT 3/51a. History of Rephased Loan Account No.
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The common operational discrepancies observed in the loan accounts are as under:

OCDEM/BCDEM is not recovered in as and when charged

Charges are to be recovered as and when debited to the account, because the demand for c h a r g e s is raised immediately on debiting the account. Reverse the entry with Reversal Flag as 'Y', with the same flow_id given while creating the original transaction. Thereafter, pass the correct entry with value date. Check the documents, is the repayment starts before full disbursement of the loan? In such cases : PRDEM type of Accounts: Repayment schedule can be created for different amount for different period. If the sanction is specific and it is different from normal scheme, matter m ay b e h a n d l e d i n consultation with Data Centre.

Reversal of entry has been passed with wrong flow_id instead of making reversal flag as 'Y'.

Account has not been disbursed fully but repayment schedule has been prepared for full amount of Sanction.

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CBS Knowledge Series

Delay in repayment causing Penal interest. Change in rate of interest and repayment schedule not regenerated.

Recover the entire amount of penal Interest so charged. Recreate the repayment schedule with appropriate sanction from the competent authority through menu option 'REPHASEI' as per procedure given in the manual and Inform the customer to repay as per the revised schedule. Demand is generated based on the details fed at the time of account opening and it is generated as per the frequency defined for the account. Demand can't be regenerated for every modification/corrections. Therefore, for such errors, the account has to be reopened in Transferin mode (Non_EI type of accounts only). Rephasement of account is not the proper solution as it hides all the previous history of Demand and

Recovery of the account. F u r t h e r, i t r e q u i r e s approval of competent authority. Other reasons: Difference in ? Disbursement Amount and Sanction Amount. ? Clubbing of amount of charges with INDEM. ? Not capturing of history of recovery from Manual system to legacy system. Demand is generated based on the details fed at the time of account opening and it is generated as per the frequency defined for the account. Demand can not be regenerated for every modification/corrections. Therefore, for such errors, the account has to be reopened in Transfer in mode.

Filling of wrong flow start date. Filling of wrong/ blank Interest demand effective date. Filling of wrong number of flows Filling of wrong amount of flow

Various facilities are available in CBS for continuous monitoring and follow-up of loan account. Whenever despite all efforts account does not remain regular and irregularity continue for certain period (as Asset classification guidelines issued by SAMD) accounts are classified as NPA at this stage also CBS provide facility to restructure/rephase the account with the prior permission of competent authority. As shown in the flow chart account
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CBS Knowledge Series

may become regular and upgraded ,else other action for recovery under various legal avenues and OTS route can be initiated for final adjustment of the account. CBS also provides facility to maintain memoranda records of accounts after becoming NPA which includes following: ? Calculation of memoranda dues. ? Getting the availability of Kitty amount in written off account. For memoranda dues Branches are required to feed data related to all NPA accounts marked in the CBS system using the menu options: NPAD - Details related to all NPA accounts. COWO Details related to WLA/WO/ Compromise. RCYM Recovery received in the NPA accounts after NPA date till 31-03-2010. Report related to NPA: NPAMIS & NPAMGT are two menu options available in the CBS system to provide the reports/statements related to NPA.

? Under Menu NPAMIS 26 Reports/ Statements are available where all the relevant data/ fields are already available in the CBS system. Guidelines issued vide 15/2008 dated 16.02.2008 ITD/CBS/Cir.

? Under Menu NPAMGT 28 Reports/ Statements are available for which some or other data/fields to be fed through menu NPADET. Guidelines issued vide ITD/CBS/ Cir.84/2008 dated 26.11.2008. Important: Reports can be generated in background (option on print screen) to facilitate the user to fire more than one report generation simultaneously. System release the user quickly for other work/report generation. Other important reports available in CBS are as under: PNBREP 1/20. Working Capital Limits Overdue for Renewal/Review PNBREP 1/24. Report For Loans/Advance A/c's Having Zero Balance PNBREP 1/25. Report For Loans/Advance A/c's Having Credit Bal. PNBREP 2/16 Report for NPA A/cs having Zero Balance.

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CBS Knowledge Series

PNBREP 2/17 Report for NPA A/cs having Credit Balance. PNBREP 1/29. Report of Address wise list of borrowers of SOL PNBREP 3/8 - Flash report PNBREP 3/18. Advances to SC/ST PNBREP 3/18A. DRI Advances to SC/ST PNBREP 3/19. Advances to Minority PNBRPT 3/31. INTTM done by branch between two given dates PNBRPT 3/31A. INTTM done by branch for a given account PNBRPT 3/32. Report of Loan A/c's for reporting LTV Ratio based on O/S PNBRPT 3/39. List of a/c where 'A/c pegged' flag is 'y' PNBRPT 3/45 List of accounts where MIS codes are not filled. PNBRPT 3/45a List of accounts where inappropriate codes are filled PNBRPT 3/47. Report of Accounts where Score card id is not fed PNBRPT 3/48. Report for Accounts of Sick Units. PNBRPT 3/50. A new Report for Reporting ITI Ratio PNBRPT 3/50a. A Report (ITI Ratio) for list of accounts where Income field is not fed

PNBRPT 3/24. A/c wise position - Int. accrued on advances PNBRPT 3/24a. Int. accrued on advances- Summary on given date PNBRPT 28/1 Report on NPA accounts not transferred to NPA GL Head. PNBRPT 28/2 Report on RI calculation on memoranda accounts. PNBRPT 28/3 Report on NPA accounts Details not entered in NPAD. PNBRPT 28/4 Report on Write off kitty position. PNBRPT 28/5 Report of standard under NPA GL head Raudit - 1 Revenue Audit reports Raudit 1/11. Raudit 1/12. List of A/cs where Penal Interest is set to 'No' List of Advance A/cs where penal int. applicable date is more than limit expiry date A/Cs where Penal Int. on Delayed Submission of Stock Statement is not set List of A/cs where Interest Is Refunded In Loans A/Cs List of A/cs where Interest Table Code is 'ZERO'
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accounts

Raudit 1/13.

Raudit 1/14. Raudit 1/15.

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CBS Knowledge Series

Raudit 1/16. Raudit 1/17. Raudit 1/18.

List of Loan a/cs where Inter RAUDIT 1est Amount is 0.00 List of A/cs where Limit Level Interest is not defined List of Loan a/cs where Last run date of a/c is less than last run date of the system Cheque Stop Payment Charges Interest Table History List of Staff Housing/Vehicle loan a/cs where no interest is charged by system as outstanding pertains to Interest only Report of loan accounts having redundent interest rate codes. Report on Interest Rate Code assigned in credit risk rated A/Cs Report on Due Date Diary for Warehouse Receipts. Preferential Interest (CC/OD/TL/DL) A/Cs in loan

RAUDIT - 2 Control Audit report Raudit 1/2. List of Accounts where Stock Stmnt is not Received OR Stock Stmnt is due in next 30 days List of Accounts where Stock Stmnt is not Received OR is due (as per no.of days) FD Due Date Diary - Under Bank LIEN Due Date Diary for Govt. Securities - Under Bank LIEN FD Due Date Diary - Bank LIEN is not marked Stop Payment Register Limitation Register - All A/cs Limitation Register - Customer Id wise List of customer id with cust group (AS 17) Report on Due Date Diary for Warehouse Receipts

Raudit 1/2a.

Raudit 1/20. Raudit 1/21. Raudit 1/25.

Raudit 1/3. Raudit 1/4. Raudit 1/5. Raudit 1/6. Raudit 1/7. Raudit 18. Raudit 1/17. Raudit 1/21.

Raudit 1/28. Raudit 1/30. Raudit 1/31. Raudit 1/32. Raudit 1/37.

Report for showing manual interest paid by the branches through menu option - IARM. List of DEBIT Entries in Income Accounts
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Raudit 1/38.
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