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T2ITC- Deposits R9.1

LD module has flexibility in processing Fixed Deposit with different interest types,
repayment methods and repayment schedules.
There are two types of Interest payment methods namely Interest Bearing &
Discounted. Interest bearing or interest in arrears implies that interest calculated is
paid at the end of a contract or at the end of the period of interest schedule. If a
contract is for 36 months and there is no schedule for interest payment, interest is
payable at the end of 36 months. If there is an interest schedule to pay interest at the
end of a quarter, then interest is paid always at the end of each quarter. On the other
hand, discounted or interest in advance payment implies that interest is payable at
the beginning of a contract or a period. For the same example seen above,
discounted interest would imply that the interest for 36 months is paid when the
deposit commences. If there were the interest schedule of quarterly payments,
interest for every quarter would be payable at the beginning of each quarter
For interest bearing deposits, choice of Fixed, floating and periodic interest types
are available but for a discounted deposit only fixed and periodic interest rates can
be applied.
Under automatic schedule, Principal is always paid as a bullet payment at the end.
Interest is also similarly paid. However, it is possible to indicate a frequency for
interest. Under manual schedule, it is possible to draw schedules for Principal as
well as interest.

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LD module can be used to handle both Loans and deposits. They are differentiated
only by the product category used. We will see how the module handles a range of
deposits with different features for Fixed deposits.
Deposits can be on a fixed term, call or notice basis. A call or notice deposit will not
have a defined maturity date and can be paid at any instant with or without notice.
A term deposit has a defined maturity date but can be rolled over manually by
extending the maturity date or foreclosed by giving an earlier date for maturity.
Interest on deposit can be liquidated or added to Principal, also known as
capitalisation, on a defined frequency.
Normally, in the case of Interest bearing deposits with fixed interest, interest rate
will be same during the entire period of the deposit. However, it is possible to effect
an increase or decrease in the rate at any point during the tenor of the deposit. The
revised rate can be furnished with an effective date.
Principal amount of the deposit can also be increased or decreased during the
deposit period.
In a normal deposit, a round amount of Principal is deposited with a Bank and the
Bank returns it with interest due thereon, which could be an odd amount. In the case
of Certificate of Deposit, the maturity amount is a round amount and the initial
deposit could be an odd amount. Useful for those who plan for a fixed future sum,
like becoming a millionaire in 5 years.

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T2ITC- Deposits R9.1

Deposits in one currency could be credited to accounts in a different currency.

Likewise initial amount could be collected from accounts of other currencies also.
CURRENCY table is used for defaulting exchange rates.
COUNTRY and HOLIDAY tables are used for business day definition and Holiday
checking for any scheduled event. For a GBP deposit, it is possible check holidays
of one or more countries, say that of USA and Switzerland .
Different deposit products are defined in CATEGORY table within the hard coded
range of 21001 to 21039 for deposits and 21045 to 21049 for sundry deposits that
do not pay any interest.
INTEREST.BASIS table defines different interest day basis that could be used for
interest calculations such as 360/360, 360/365, 366/366 etc
Floating interest rates are defined in BASIC.RATE.TEXT and actual rates
applicable are defined in BASIC.INTEREST. As and when rate is changed here by
indicating the effective date for such a change, the underlying contracts get the new
rate.
In addition, it is also possible to use PERIODIC.INTEREST table for rate revisions.
Once a rate is revised, it remains fixed till the next rate revision date.

Introduction to T24 - Deposits

T2ITC- Deposits R9.1

Id of the contract can be set to be generated automatically. Id comprises Application

name of LD, last two digits of the year of creating deposit, Julian date of creating
deposit (number of days since beginning of the year) and finally the sequence
number of the deposit.
Counterparty of contract is indicated by inputting a valid Customer Number or
Mnemonic of the customer. User can also pick from the drop down list of
customers available.
Contract Currency cannot be changed after authorising the contract. When the
drawdown or liquidation account is in a different currency, then exchange rate for
conversion purpose is automatically defaulted from CURRENCY table.
Principal amount of deposit can be input as a full amount or by using standard
abbreviations of T for thousand, M for million and B for billion.
For example: 10T for 10,000, 1M for 1,000,000, 1B for 1,000,000,000.
Type of Deposit can be defined using the product category. As loans and deposits
are handled by the same module, accounting differentiation is achieved only by
choosing the correct Product code. Category codes meant for deposits are between
21001 and 21039. If the range of 21045 to 21049 is used, they are treated as Sundry
deposits and we cannot indicate any interest rate for them.

Introduction to T24 - Deposits

T2ITC- Deposits R9.1

Business days is used for the purpose of holiday checking in respect of maturity of
deposits.
The period of the deposit is indicated by Value Date of deposit or deposit start date
and deposit maturity date . Value date of contract is used for calculating interest on
principal. Value date will be defaulted with System date if no input is given. It can
also be a back dated/forward dated.
Maturity date can be entered either as a date or in number of days, or weeks or
months from the value date of the transaction. Maturity date when specified by
standard abbreviation gets translated to actual date.
For example, M implies 3 months from the value date. If that happens to be a
holiday, T24 automatically indicates the next working day.
When an exact date is specified which falls on a holiday, T24 generates suitable
override message.
Interest basis indicates basis of number of days to be used for interest calculation
like A 360/360, B 366/360, C 366/366In the options specified, number on the left
(Numerator) represents number of days in the interest period and number on the
right (Denominator) is number of days in a year.

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T2ITC- Deposits R9.1

For fixed rate of interest, the interest rate should be indicated. In the case of floating
interest, a key predefined in BASIC.INTEREST table should be indicted. It is
possible to indicate a positive or negative spread for an effective rate over and
above base rate.
Customer account from which initial principal is to be drawn is to be specified as
Draw down account. T24 defaults customers first current account opened in the
deposit currency.
On maturity or on payment due dates for Principal and interest, the amounts are
credited to Principal liquidation account and interest liquidation account. These
could be different from each other.
T24 defaults customers first current account in the Deposit currency as Draw down
account as well as Principal and Interest liquidation accounts.

Introduction to T24 - Deposits

T2ITC- Deposits R9.1

Even under automatic scheduling, it is possible to indicate Interest payment

frequency for term deposits. Next date of payment and further frequency can be set.
Standard T24 formats are available for defining frequency. DAILY is used for daily
frequency, BSNSS for every business day, WEEKn to make payments once in every
n weeks, Mnn to make payments once every nn months can be used.
For example, when deposit date is 24 Aug 2007 and M01 is indicated, then next due
date will be 24 Sept 2007 and monthly thereafter on the 24th of each month. Instead
if 05NOV2007M0105 is indicated, then the first due date is 5th November and
thereafter it would be on the fifth of every month.
Whenever a frequency is indicated, the due date could fall on a holiday. In such a
case, instead of collecting dues on a holiday, it could be set to be collected on the
next working day, or the previous working day or the next working day as long as it
is in the same month and once a month is crossed to be collected on the previous
working day.
When the due date has got shifted due to holidays, what should be the next date?
Option regarding Base Date helps decide this. For a monthly payment of 7th, when
7th is holiday, the due date is shifted. Whether the next months due date should be
based on the base date of 7th or the revised date for previous schedule are these
choices.

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For discounted deposits, Interest is always paid in advance. As interest is paid in

advance, only fixed interest rate is allowed for these deposits.
When interest payment frequency is not defined, it means that interest is payable as
a Bullet. As this is a discounted deposit, interest is paid as a bullet at the beginning
itself, viz on the date the deposit is taken from Customer, interest for the entire
period is paid to the Customer.
If frequency for interest payment is defined, then interest is paid on the beginning of
each period. If interest is payable once a month on 15th, then the first payment of
interest is done on the day the deposit is taken and it covers interest upto 15th.
Thereafter, every month, on the 15th, , interest is paid for the period upto 15th of next
month.

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CDs are deposits usually for short maturities, which are redeemed on maturity. The
final maturity value of the deposit is given. The difference between Maturity
amount and Initial amount is the interest part of the deposit and it is amortised over
the life of the deposit.
CDs are processed using Fixed rate of interest and A basis of interest calculation
(360 / 360). This ensures that the same amount of interest is applicable for every
month.
If the maturity amount and the fixed interest rate is indicated, T24 automatically
calculates the initial investment amount using the term and interest rate which is
required to be collected from Depositor.
As the interest is paid at the end along with the Principal, it is not possible to
indicate interest payment frequency.

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Even after authorisation, it is possible to change the deposit from one product to
another deposit product. Category code can be changed as long as it is another
deposit category code. By this change, other terms and conditions will NOT be
automatically changed.
It is possible to foreclose a deposit or extend its maturity date by amending its
maturity date accordingly. Extension of maturity date or reducing it will not change
the interest rates. Where needed, they have to be suitably amended.
Fixed interest rate can be changed with a new Interest rate with an effective date.
This can also be back valued till the previous interest schedule date.
While a floating rate cannot be changed from one to another, it is possible to change
the spread with an effective date.
Frequency for interest payments can also be changed.
Increase of principal amount can be done by giving the amount and decrease can be
indicated by mentioning the amount preceded by a minus sign.

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Standard enquiries can be used to get on line information.

New Deposits received today gives details of deposits of the day.
In addition we can also view product wise list of deposits, full details of schedules
of selected deposits, and summary thereof.
For any select deposit, we can also view details of interest accruals.

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Processing commercial Money market instruments is straightforward but flexible.

The deposit can be for a fixed period or repayable on demand with or without
notice.
For a MM deposit, fixed or floating interest rate type is allowed.
Only bullet Principal repayment is allowed and cannot be manually scheduled.
However, increasing or decreasing the deposit amount with different effective date
is allowed during the deposit tenure.
Interest can be paid in one shot at end as bullet or at a defined frequency.
For call and notice contracts, interest schedule is mandatory, but interest payment
could be deferred, if need be. Whenever interest is liquidated, it could be
capitalised or not.
For term deposit, interest schedule is optional and can only be liquidated
Fixed deposit renewed for further period is called Rollover. Manual or automatic
rollover is possible for total maturity amount with interest or only for the principal
amount with interest liquidation.

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For MM deposits, interest is always paid only at the end of the interest period if
interest schedule is defined and at the end of the contract in other cases.
This is better suited for short term deposits. Deposits can be for fixed period, or
payable at call or after serving the agreed notice.
T24 allows rollover of deposit on maturity either manually or automatically. When
set for rollover, the new term of deposit must be defined. While rolling over
deposits, interest can be capitalised or liquidated and paid to customer. Automatic
rollover can be defined with a final maturity date. The rollover amount could be at
the same interest rate as the original deposit or at a different rate.

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MM module insists on liquidation and draw down accounts to be in the same

currency of contract. CURRENCY table is used for defaulting exchange rates to
affect Limits, if they are in a different currency from Loan currency and for local
currency equivalent amount in accounting entries. COUNTRY and HOLIDAY
tables are used for Holiday checking for the Country of Contract currency. For a
GBP loan, T24 will only check holiday of GB00.
Different deposit products are defined in CATEGORY table within the hard coded
range of 21001 to 21039 for MM deposits, 21040 to 21044 for Fiduciary deposits
and 21045 to 21049 for Sundry deposits without interest.
INTEREST.BASIS table defines different interest day basis that could be used for
interest calculations such as 360/360, 360/365, 366/366 etc
Floating interest rates are defined in BASIC.RATE.TEXT and actual rates are
defined in BASIC.INTEREST. As and when rate is changed here by indicating the
effective date for such a change, the underlying contracts get the new rate.
In addition, it is also possible to use PERIODIC.INTEREST table for rate fixing
during roll over. Once a rate is fixed, it remains the same till the next roll over. It is
also possible to direct the system to default the correct rate for the initial period of a
contract from PERIODIC.INTEREST table.

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Id of the contract can be set to be generated automatically.

MM deposits require details of depositor, contract currency, amount of deposit,
deposit start and end dates.
Term of deposit can be call or notice or fixed term.
Interest related details like fixed interest rate or floating interest key with or without
margin must be furnished depending on type of interest selected for the contract.
Interest due date with frequency can be specified as the due date of next interest
payment and a frequency thereafter.
Customer account from which initial principal is to be drawn can be furnished.
System defaults customers first current account opened in the deposit currency.
Account to which principal and interest to be credited on maturity should be
indicated as the liquidation account.

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For moving money into or from Deposits, we need to have accounts. They are draw
down accounts and liquidation accounts. MM deposits allow movements only from
accounts of same currency while LD deposits can move money from other currency
accounts also. It is possible to indicate different accounts for liquidating Principal
and Interest.
Interest on MM deposits is always payable at the end of interest period. It is also
mandatory to indicate a frequency for payment of interest for Call and Notice
contracts. It is possible to postpone payment of interest till maturity by deferring the
same. Alternately, this interest could also be capitalised by adding it to Principal.
Interest of LD deposits could be paid at the end or at the beginning of interest
period. Further, it is also possible to issue Certificate of Deposits.
Fixed period contracts could also be rolled over. This could be an extension of
maturity by settling the interest and extending only the principal or postponing
interest payment.
For MM deposits, we can also set them to be automatically rolled over by indicating
the roll over period, like once in 2 weeks or once in 3 months, till a pre defined date
or endlessly till we manually stop rollover. Interest could be liquidated at the time of
each rollover or capitalised and paid at the final maturity date.

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We have seen major features of different types of deposits dealt in LD and MM

applications.
We have seen different types of interest allowed in different deposits.
We have had hands on experience in creating deposits, viewing accounting entries
and reports.

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