T3TLD-Loans and Deposits R15

T24 Loans and Deposits
TEMENOS EDUCATION CENTRE

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Loans and Deposits - Objectives
 Loans and Deposits - dependencies
 Application specific Parameter tables, connected with Loans and

Deposits
 Loans and Deposits build sequence
 Product features of Loans and Deposits
 Other features
 Standard Enquiries, Reports and System maintained Tables related to

Loans and Deposits
LD Loan – product overview
Call / Notice Interest

bearing Fixed
Automatic Bullet
interest Floating
schedule
Frequency Fixed
Bullet for interest
principal Periodic
Commitment Loan
Fixed Discounted
period
Fixed
Interest
Stand-alone bearing
Floating
commitment Automatic Manual
schedule schedule
Bullet
interest Periodic
Commitment Bullet
charges principal Frequency
repayment for interest
LD Dependencies
 LD makes use of
 CUSTOMER
 ACCOUNT
 Core dependencies
 Delivery
 Accounting
 Limits
 LD also uses other Static tables

LD Dependencies – Product related
 Category codes are shared with Money market module. Ranges are
hard coded
 21001 - 21029 Deposit
 21030 - 21039 Taking
 21040 - 21044 Fiduciary Deposit
 21045 – 21049 Sundry deposit
 21050 - 21074 Loan
 21075 - 21084 Placements
 21085 - 21089 Fiduciary Placement
 21090 – 21094 Account receivable
 Category codes exclusively used by LD

 21095 – 21099 Commitment for loans
 21101 – 21105 Liability Commitment (used for bonds issue)
LD Dependencies – Interest related
BASIC.RATE.TEXT
Floating interest
BASIC.INTEREST
Possible to set a negative interest rate for MM,SW,DX

in BASIC.INTEREST
Possible to give a negative spread in LD

(so that effective rate is even negative)
Interest rate works out to 6.5% in this case
LD Dependencies – Interest related
Periodic interest
Bid rate is
for Deposits
Offer rate is
for Loans
Generated daily.
Back dated
changes are
also possible
LD Dependencies – Charges and Commissions
In LD contract, these are linked through LMM.CHARGE.CONDITIONS

Possible to indicate whether Bank wants to receive charges or pay them
Also possible to accrue or amortise charges on Daily or Monthly basis by using

ACCRUAL.FQU and ACCRUE.AMORT Fields. AMORTISN.PERIOD Field used to indicate
the period of Accrual / Amortisation in months or years or till Next roll over date
LD Dependencies – settlement related
1. CUSTOMER.SSI
SPVCN Order can be changed
through ACCOUNT.PARAMETER
2. SEC.ACC.MASTER
Draw down and liquidation
Accounts can be input to be
3. AGENCY in different currency from Principal
for VOSTRO and CUSTOMER options Any preferred exchange rate
can also be input
4. CUSTOMER.CCY.ACCT
5. NOSTRO.ACCOUNT
INTERNAL SUSPENSE ACCOUNT

(as defined in ACCOUNT.CLASS under
SUSPLMMCR / SUSPLMMDR )
LD Dependencies - Currency related
COUNTRY REGION
HOLIDAY
CURRENCY.PARAM
CURRENCY CURRENCY.MARKET
Possible to indicate countries and Regions in BUSINESS.DAY.DEFINITION

field while inputting a contract. Accordingly, while inputting a contract,
holidays for those countries and regions will be checked for any scheduled
activity and suitable overrides generated
Interest Day Basis will be defaulted from Currency table to the transactions.
Possible to change at contract level
LD Dependencies – Currency related
 Different Interest day basis for calculation of interest possible

depending on methods followed for calculating Key Days/Denominator
number of days in an interest period and A 360/360
days in a year A1 360/360
 A 360 / 360 A2 360/360
30 days in each month A4 360/360
360 days in an year B 366/360
C 366/366
 A1 360 / 360 D 360/366
Additional interest of February
E 366/365
calculated on last day
E1 365/365
F 360/365
 A2 360 / 360
Additional interest earned of February H 30/356
calculated on penultimate day F1 360/365
F2 360/365
 A4 360/360 S Special
Bancoldex (Columbian) Interest basis W 252/252
W1 21/252
Quiz 1 – True or False
1) Only Fixed Interest type is allowed for a Discounted Type of LD Contract

Ans: False
2) Periodic Interest type is allowed for a Call Contract

Ans : False
3) Default order of drawdown account for settlement of LD Contract is

SPVCN
Ans : True
4) Interest Day Basis A2 is similar to A1 but additional interest is calculated

on the penultimate day of February
Ans : True
Application specific Parameters
LD - Parameter tables
 Parameter tables to be set up for LD

 LMM.INSTALL.CONDS
 LD.TXN.CODES
 LMM.CHARGE.CONDITIONS
 LD.TXN.TYPE.CONDITION
 LMM.ADVICES
 LMM.ACTIVITY
 LMM.TEXT
 ACCOUNT.CLASS
LMM.INSTALL.CONDS
 Common parameter table for LD and MM

 Rules can be set company wise
 Major groups of fields relevant to LD are

 Days before reports
Rules can be set for producing reports prior to (1) liquidation of any
financial component like Principal, interest (2) final maturity and (3) rate
revision
 P & L category codes to be used
For Asset and Liability products and when interest is paid in advance or in
arrears
 Accrual cycle for local and foreign currencies
Daily or monthly
 Accrual cycle for floating rate contracts
Daily or on rate changes
 Default charge code to be used
LMM.INSTALL.CONDS
 Other important fields
 RETURN.INT and RETURN.COM Fields

In discounted contracts interest and commission amounts are collected
up-front. These interest and commission could be refunded consequent
to any change in terms of contract like early closure of loan, reduction in
rate etc, these fields could be set to YES
There is an option in LD module to override the input here at the time of
input of a contract
Taxes, if collected, will not be refunded to customer
 ROUNDING.RULE Field
Type of rounding needed for interest, commission, charges and fees can
be defined here by using Id of a pre-defined rule in EB.ROUNDING.RULE
table
Natural, Rounding up, Rounding down or choice indicated in CURRENCY
are options available in EB.ROUNDING.RULE
LD.TXN.CODES
 Various events happen during the life of a LD contract

 Opening a loan
 Increasing the principal, decreasing the principal, repayment of principal
 Interest receipt, commission receipt
 Accounting entries are duly passed affecting Customer account and PL

heads during these events
 In LD.TXN.CODES, we can indicate which Transaction code is to be

used for each of these events
 Narration in accounting entry is derived from the respective record in
TRANSACTION
LMM.CHARGE.CONDITIONS
 Charges collectable on loans are defined in FT.COMMISSION.TYPE

and then linked to loans through this table
 CHARGE.CODE.KEY Field used to indicate pre defined
FT.COMMISSION.TYPE record Id
 When left blank, then charge amount should be input in underlying contracts
manually
 These charges could be taken on value date and/or scheduled dates

on Initial Principal, Outstanding Principal, Principal repayment or on
interest amount
 Possible for Bank to opt to receive or pay charges using PAY.RECEIVE

Field
 Bank may like to pay charges in case of Deposits
LMM.CHARGE.CONDITIONS
 CATEGORY.CODE Field can be used to indicate a PL Category code

or an internal account where the charges are to be booked
 If the bank is acting as a collecting agent of charges for a third party, like
Government, then the internal account in which the charges are to be kept
should be indicated
 Possible to opt for monthly amortisation and also the period over which
it should be amortised, if the credit is for PL
 Amortisation can be over 1 to 11 Months or 1 to 99 Annum (years) or end of
Contract or till next Rate revision
 These are useful if we do not use a pre-defined record of
FT.COMMISSION.TYPE. Otherwise, accrual / amortisation rules defined in
FT.COMMISSION.TYPE are used
 Transaction codes of FT.COMMISSION.TYPE or those defined in

LD.TXN.CODES could be used by opting for Yes or No in USE.FT.TXN
Field
Workshop - 1
 Use Admin Menu > Framework Parameter> Interest, Taxes & Charges
> Charges > FT Commission Type
 Create a charge type to collect flat charge of USD 500
 Use Admin Menu > Credit Administration > Loans > Param > LMM
Charge Conditions
 Set up a record in LMM.CHARGE.CONDITIONS using a flat charge
created above
Workshop -1 Solution
Workshop -1 Solution
LD.TXN.TYPE.CONDITION
 Used to define the set of rules governing a specific product category
 Option available to indicate whether to process maturity at Start of day

or Close of business
 Applicable for any scheduled event
 Currency wise conditions can be set for the following:

 Fixed interest rate, or floating key with / without spread
 Maximum and minimum initial draw down amounts
 Commission / fee by indicating either a record set up in
LMM.CHARGE.CONDITIONS or inputting a rate in COMM.RATE Field
 Additionally, for Certificate of deposits, tolerance allowed between initial and
maturity amounts can be indicated – either as an amount or as percentage
 When a contract has liquidation account currency different from deal

currency, T24 creates a record in internal file SETTLEMENT.RATES
 Used to store liquidation exchange rates for various event dates and
currencies . User may also input an exchange rate
 If the bank desires to use a single rate for all liquidations in a specific
currency, a new currency market may be created in order to define the
liquidation rate for each currency and indicate that in
SETTLEMENT.MARKET Field in LD.TXN.TYPE.CONDITION
 Also possible to indicate whether Buy, Sell or Middle rate should be used for
these transactions in CONVERSION.TYPE Field
 Value input here would be defaulted at the deal level for the relevant
category
 If a rate is not input in EV.APPL.RATE in SETTLEMENT.RATES table for a
particular deal, then this rate is considered for conversion
 Interest or Commission accruals can be calculated by including the first

or last or both days of accrual period
 A pre-defined record in EB.ACCRUAL.PARAM application could be
indicated
Possible to define records here to include first day, last day or both
Effective dates for Principal increase / decrease could be adjusted by any
number of days indicated here with + / -
Type of rounding desired for these accruals could be indicated by
referencing Id of a pre-defined record in EB.ROUNDING.RULE
 Frequency for interest could be set as Daily, Business day, weekly,

monthly or any other frequency pre-defined in EB.FREQUENCY table
 When a scheduled date falls on a holiday, it is possible to automatically shift
the date Forward, Backward, Forward same month or retain the same
calendar date
 Once a due date is revised, the next due date could be fixed based on the
previous due date or the original base date. These options are also
available
Workshop - 2
 Use Admin Menu > Credit Administration > Loans > LD Txn Type
Condition
 Set up conditions for a loan product
 Floating interest rate with a spread of 2% over base rate
 Minimum and maximum principal amounts to be USD 10,000 and USD
100,000
 Attach the LMM.CHARGE.CONDITIONS record created in previous
workshop
 The minimum and maximum terms are to be 1 and 12 months
 Create a condition for GBP loans that the interest rate should be fixed 10%.
 Set interest frequency as monthly and on last date of a month
Workshop –2 Solution
LD.GROUP.CONDITION
 Special conditions on interest spread and charges applicable to groups

of customers defined in APPL.GEN.CONDITION or individual customer
could be specified here
 Concessions are on LD.TXN.TYPE.CONDITION definitions. If it defines
floating loan interest which is currently 10%, then for Customer 100283, the
applicable rate would be 12%. (If same spread is meant for fixed interest
rates also, FIXED.CONTRACT Field to be set as Yes)
 70% of applicable charges in USD and a flat amount of 50 for other
currencies will be collected
LMM.ADVICES
 Various events in life cycle of a LD contract are hard coded and

detailed in LMM.ACTIVITY
 In LMM.ADVICES, we can specify, product wise, the type of advice (s)

to be produced for any activity.
 For some activities, it is possible to produce advices prior to the activity

 Advice to claim Principal / Interest / Commission
 Other ways in which this table can be put to use are

 Fair value interest rate can be picked from PERIODIC.INTEREST and
defaulted into MM and LD contracts
 Input is Id of PERIODIC.INTEREST in Field FV.RATE.KEY and / or
FV.MARGIN.KEY
LMM.TEXT
 When settlement instructions of counter party are not known, proceeds

can be kept in internal suspense accounts
 Advice text to be printed on confirmations are specified in LMM.TEXT

 Upto 9 different messages could be stored here
 Instead of indicating a settlement account, when one of these numbers is
indicated in a contract, then the corresponding message goes to customer
while proceeds go to suspense
 Id is the Category code mentioned in ACCOUNT.CLASS for

SUSPLMMCR and SUSPLMMDR
Quiz 2
1) Is it possible to refund Interest, commission and taxes on foreclosure of

a Discounted Contract ?
Ans : Interest and Commission can be refunded but Tax cannot be
2) 29th April is a scheduled date for loan repayment. It is a holiday. 30th

April and 1st May are also holidays. If the System then indicates April
28th as the due date, then is it following FWD method or BWD method or
any other method for calculating due date? What would be the due date
if 1st May were not a holiday?
Ans : FSM / BWD. Even if 1st May were working day, the due date would
be 28th April
3) User needs to produce confirmation advices, activity wise. Where can

these be specified ?
Ans : LMM.ADVICES table
LD Build sequence
1. LMM.ACTIVITY * * Mandatory
Optional
2. LMM.CHARGE.CONDITIONS *
(1 record mandatory for default)
3. LMM.ADVICES LMM.ACTIVITY
4. LMM.INSTALL.CONDS * LMM.CHARGE.CONDITIONS *
5. LD.TXN.CODES *
ACCOUNT.CLASS *
6. LMM.TEXT *
7. LD.TXN.TYPE.CONDITION LMM.CHARGE.CONDITIONS
8. LD.GROUP.CONDITION APPL.GEN.CONDITION
LD – Product features
Products handled
 LD.LOANS.AND.DEPOSITS
 Primary application to process two major activities of a bank
Loans
Deposits
 Suited for Commercial and Retail clients

 Can also be used by Banks themselves for managing bond issues in
primary market
 Can also handle Bill discounting and Leasing
 Asset products include

 Loans, commitment, receivables
 Liabilities include Deposits including certificate of deposits

Commitment
 Preferential access to bank funds

 A contingent asset for bank, for which a fee is collected
 Can be stand-alone commitment or linked to loan drawings
 Commitment can be revolving or non revolving
 Multiple loan drawings / different loan contracts can be linked to a

single commitment contract
 Amount available for further draw down is updated on commitment contract
Commitment
 Revolving / Non revolving commitments could be drawn in tranches

 Could be cumulative or non cumulative
Unutilised portion carried over to the next tranche or allowed to lapse
 RE.CONSOL.SPEC.ENTRY is passed at the end of the day to mark

Commitment less any drawings there from as contingent
 When Non cumulative Commitment is issued in tranches, contingent

balance for undrawn portion could be reduced at the end of every
tranche date or at the end of final maturity date
 REV.CONTINGENT Field can be set as DED or NULL
 Non cumulative Commitment of 500,000, with first tranche of 200,000 and
second tranche of 300,000 to be drawn within 1 and 2 months. If only
50,000 is used within 1 month, 150,000 could be reduced from contingent at
the end of first month or at the end
Commitment fee
 Commitment fee could be charged on the full amount of commitment or

on unutilised portion alone
 While charging fees on unutilised portion, possible to input multiple

rates with level / banded fee structure.
 1 million 2%, 2 million 4%, 5 million 1%.
 If the unutilised portion is 4 million
Under level calculation, the fee chargeable will be at 1%
Under band calculation, it will be 2% for 1 million, 4% for the next 1 million
and 1% for the next 2 million
 Amounts and their respective rates can be input in any order

 T24 takes the largest amount as the Available Commitment amount
 Hence, recommended to have the last amount and rate as the maximum
commitment available amount
Workshop - 3
 Use User Menu > Customer > Corporate Customer

 Create a record for a Corporate Customer
 Get the record authorised
 Use User Menu > Corporate Operations > Loans > Create Loans >
Input Commitment
 Input a Non-revolving Commitment for 5 million US Dollars available from
today for two years for your corporate customer
 Banded Commission @2% on first 3 million and 1% on the balance 2
million - on the unused portion. Commission fee to commence after 2
months
 Draw downs available in multiples of 1 million US Dollar
 Use User Menu > Corporate Operations > Loans > Enquiries > List of
Commitments
 View commitment details
Workshop – 3 Solution
Draw down from commitment
 If a loan is drawn down from the commitment, limit for the Commitment
product is automatically adjusted appropriately
 Hence, there is no need to create / use separate limit product for the loan
 When a commitment is input, Commitment available amount is updated

in LIMIT application
 When a loan is drawn down from this commitment, Commitment

available amount is duly reduced and Total outstanding in LIMIT is
increased
 In a revolving commitment, when customer pays back the loan, Total

outstanding in LIMIT is reduced and Commitment available amount
goes up
Workshop - 4
Loan under Commitment (Project Loans)
 Input a draw down of 1.5 million from commitment created in previous
workshop
 The loan is for 2 years and carries 5% fixed interest rate
Loans under Commitments
 View details of Loans drawn under Commitment
 Use User Menu > Corporate Operations > Loans > Enquiries > LIAB
 View Limit Summary, drill down for Limit Trade Summary and further drill
down for Transaction entries.
Quiz 3 – True or False
1) Commitment Contract is a Contingent Asset for the bank

Ans : True
2) If a Commitment is revolving, then it cannot be drawn in tranches

Ans : False
3) Commitment fee could be charged on commitment amount or unutilised

portion alone
Ans : True
4) In revolving type of commitment, the commitment available amount in

LIMIT application will go up when customer pays back the loan
Ans : True
Loans
 Loans can also be drawn without any commitment
 Commitment may be in a currency different from Loan currency
 Draw down or liquidation accounts could be in a different currency

 Possible to indicate desired exchange rate for draw down, charges, fore
closure, principal increase / decrease through CURRENCY.CODE and
EXCG.RATE Fields
Can be multi valued to provide rates for different currencies
 Alternately, can indicate a separate Currency market for settlement in
SETTLEMENT.MARKET Field. CONVERSION.TYPE Field is used to
indicate BUY, MID or SELL rates
Details defaulted from LD.TXN.TYPE.CONDITION
 In the absence of these, can also indicate a settlement rate in internal table
SETTLEMENT.RATES
Interest and maturity
 Can be Interest bearing or discounted

 Possible to apply yield method of calculating discounted interest
 T24 calculates effective rate of interest in case of discounted loans
 Interest collection method could be set as REPAY.AMT to collect

interest on repayment amount instead of amount accrued so far
 Loan 150,000 repayable in 3 installments of 50,000 each at the end of 30,
60 and 90 days will get interest on 50,000 for 30 days, 50,000 for 60 days
and 50,000 for 90 days
 Such interest could be collected for scheduled repayments or adhoc
repayments
 Can be matured at End or Start of day or pre-paid online
 When discounted loans are pre-paid, option available to return or retain

extra amount collected
Repayment schedule
 Automatic schedule
 Bullet type of payment for principal at the end
 Interest at the end or in advance
 Periodical frequency for Interest
 Manual schedule
 Frequency or zig-zag scheduling for any event
 FWD, BWD, FSM, CAL and Base date key definitions needed
 In case of interest bearing contracts, possible to capitalise or liquidate

interest
 Possible to indicate a pre-defined accrual method like First, Last, Both

 Pre-defined records in EB.ACCRUAL.PARAM can be used
 Rule defaulted from LD.TXN.TYPE.CONDITION
Term (Tenor)
 FIXED
 Maturity date is a specific date
 It can also be entered as number of days (D), weeks (W) or months (M)
from value date.
 CALL/NOTICE
 Maturity date is a number in the Range 0 to 999
 0 = Call
 1 to 999 = Number of Days Notice
 HOLIDAY table of Countries / Regions indicated in BUS.DAY.DEFN Field

checked to ensure scheduled dates are working days
 When frequency is indicated and not a specific date, T24 automatically re-fixes the
scheduled date as per rules defined as FWD, BWD, FSM, CAL etc
Interest Types
1. Fixed
2. Periodic Automatic
3. Floating
4. Periodic Manual
5. Periodic Straight
 Any desired Interest type can be opted in INTEREST.TYPE Field by

indicating their respective serial number
 Interest bearing loans can have any of the above types while
Discounted Loans cannot have Floating rates
Fixed Interest Rate
 Interest rate fixed for life of contract unless amended using

NEW.INT.RATE Field
 Rate revision schedules possible
 Interest basis can also be “S” special
 Commitments and Annuity type loans can have only Fixed Interest rate
Floating Interest Rate
 Interest rate linked to valid key from BASIC.RATE.TEXT and interest

rate from BASIC.INTEREST
 Positive or negative spread could be added to this
 When rate changes individual contract rates recalculated automatically
 Not valid for Commitments or Discounted or Annuity type repayment

contracts
Periodic Interest - Automatic
 Interest rate change dates are pre-defined on schedule
 Changes to the rate will be picked up automatically through

PERIODIC.INTEREST
 Spread can be added / subtracted in the contract
 Starting interest rate (fixed rate)

 Manual input or allowed to pick from PERIODIC.INTEREST table by
setting USE.DEF.PI.RATE Field as YES in the contract
Periodic Interest - Manual
 Future rate revision dates with or without applicable rates pre-defined in

schedule
 Rate revision schedules should coincide with interest schedule
 Spread on future rates could be mentioned in the contract
 If rates are mentioned, changes will be automatic after taking into

account spread, if any
 If rates are not mentioned, selection and application of appropriate

rates are carried out on due dates by user
Periodic Interest - Straight
 Interest rate fixed for life of contract unless amended using

NEW.INT.RATE Field
 Rate input as a numeric value and not a floating rate
 Possible to add Spread in contract.
 Possible to manually specify the interest amount when interest day

basis is chosen as S
 No rate revision on manual schedule

Functionality of S basis Interest
 For each LD contract, user can define “S” basis of interest or

commission at contract level
 On schedule date, adjustment entry for the difference between actual

and accrued amounts will not be raised
 Instead, difference will be adjusted to liquidation account on maturity
 Values have to be defined in the following Fields namely

SPECIAL.INT.BASIS and SPECIAL.COMM.BASIS
S basis – Separate PL booking and Limit changes
It is possible that:
 Accounting entries needs to be generated for the Interest amount
agreed upfront. It needs to be accrued on a daily basis using the
“Interest basis” and “Interest rate” inputted in the finance contract.
 Limit has to be updated for (Principal + Interest) portion of the contract.
 Asset value can include the Principal and the interest (Markup amount)
If yes - Limit has to be updated for

the “Interest portion” also of the LD
contract.
If yes - accounting entries generation for

the “Interest portion” of contract.
 Rate Revision and Spread revision is also possible for fixed rate
contracts with live interest setup.
Remember:
Online repayment of interest which is yet to be
accrued is possible.
During this, interest payment schedules

depending upon the number of payments paid
should be removed from schedule definition or
the maturity date should be adjusted to the
number of payments paid.
During early maturity the user is allowed to

input the Interest amount that needs to be
recovered from the customer in the
TOT.INTEREST.AMT field. Remaining interest
amount will be reversed to the LIVEIN.
Workshop - 5
Corporate Loans
 Input a loan under the product for which you had defined rules earlier in
LD.TXN.TYPE.CONDITION in Workshop – 2
 Loan 150,000 USD for 12 months at a floating rate of 3% spread over base
rate
 Validate the contract, look at the defaulted values. See the effect when the
loan conditions are different from the rules set
 Use User Menu > Corporate Operations > Loans > Enquiries > Loan
Schedules (Summary)
 Observe how the System has defaulted Interest Repayment Frequency
and Commission
Schedules (Full)
 Look at the repayment schedule
Workshop - 6
 Use User Menu > Corporate Operations > Loans > Accounting Entries
> View Transaction Entries
 Look at the transaction entries for the Loan created in the previous
workshop
 Drill down to view STMT.ENTRY and RE.SPEC.ENTRY detail
 Use User Menu > Corporate Operations > Loans > Accounting Entries
> See Forward Entries
 Look at the forward entries for the loan contract
3
Workshop - 7
Discounted Loan (Bills, Acceptances, etc.)
 Input a loan for USD 100,000 for 1 year at 10% with discounted interest
payment type for your corporate customer
 Commit the record
 Open the record under EDIT mode and note down the interest amount
 Make the loan as discounted interest payment type with Yield Method
 While authorising, look at the effect of Yield method on the discounted
interest amount. Then get the record authorised
Workshop - 8
Corporate Loans
 Input a call loan for USD 100,000 for your corporate customer with a
floating interest rate to which add a negative spread of 0.5 per cent
 Do not give any frequency for interest payment
Corporate Loans
 Input a 10 day notice loan for USD 100,000 with a fixed interest rate of 4
percent
 Give a interest payment frequency of twice a month (TWMTH)
Schedules (Full)
 Look at the repayment schedules for the above loans
Creating a manual schedule
 Schedules for different components can be defined individually and in

combinations with or without set frequencies
 Principal, Interest, Annuity, Charges, Rate Revision, Diary etc can be
defined individually or in combinations like Principal and Interest, Interest
and Charges
 Entered by inputting following information in LD

 AUTO.SCHEDS Field - No
 DEFINE.SCHEDS Field - Yes
 On committing the loan contract, LD.SCHEDULE.DEFINE application

is automatically launched
 Define Forward Backward Key to specify the processing of events

scheduled when the processing day falls on a holiday
 Forward - Next working day
 Backward - Back to last working day if a non-working day generated
 Forward same month - Forward to next working day if in same month. If not
go back to last working day
 Not Automatic - Specify every event
 Calendar - System uses date cycled

 Base Date Key is used in conjunction with the Forward Backward Key
to specify the processing of subsequent events
 Base - Subsequent payment dates refer to original date input here
 Previous - Subsequent payment dates refer to previous payment date
 Null - All dates are manually input

SCH field can have combination of up to 3 components – like PCI

P – Principal, B – Principal increase, I – Interest, C – Commission, R – Rate revision, D - Diary
M – Margin in floating rate, A – Annuity, F – Fees, N – Capitalised charge, K – Asset leasing schedule
Amount is required only for Principal and Fee schedules
RATE will be used when defining a rate review schedule or defining a margin schedule
CHRG will need to be pre-defined in LMM.CHARGE.CONDITIONS

Used for F, N, P, I or A schedules
NO. indicates how many more times the event should happen with the set Frequency (4D, 3M etc)
Interest and Principal schedules should cover the maturity date of the contract
Workshop - 9
Corporate Loans
 Input a loan for 1 year for USD 150,000 for your corporate customer
 Interest in arrears at 7%
 Manual Schedule:
Principal repayments of USD 50,000 each on 2nd commencing from
third month, 10th of sixth month and on maturity date
 Interest applied quarterly
Schedules (Full)
Workshop - 10
Corporate Loans
 Input a loan for 1 year for your corporate customer
 Loan amount USD 50,000
 Interest in arrears at 7% initially. The interest will be reset once in two
months with a spread of 1% above the then prevailing rate in
PERIODIC.INTEREST
 Interest is payable once in 15 days
 Manual Schedule for Principal repayments of USD 5,000 per month to
commence after three months
Schedules (Summary)
Workshop - 10 Solution
Workshop - 10 Solution
Workshop - 11
Corporate Loans
 Input a loan for 1 year for your corporate customer
 Loan amount USD 50,000
 Interest in arrears at 7% initially. The interest will be manually reset after
third and sixth months with a margin of 1% above the rates for different
periods – agreed now itself as 5% for three month rate and 8% for six
month rate
 Interest is payable once in a fortnight
 Principal repayments of USD 5,000 per month to commence after three
months
Schedules (Full)
Defining annuity type of schedule
 Only Interest bearing, Fixed interest type will be accepted

 In the contract, ANNUITY.PAY.METHOD Field should be set to Begin
or End to indicate whether the payment is at the beginning or end of the
period
 If Begin is chosen, the first payment will be only Principal
 Possible to leave a residual value to be collected along with last
installment
 RESIDUAL.VALUE Field in LD application to be used
 To define Annuity schedule (A), Forward Backward key should be set
to Calendar (5) and Base date key as Base Date (1)
Workshop - 12
Corporate Loans
 Input two Annuity type loans for 1 year for your corporate customer
 Loan amount USD 50,000 each
 Fixed interest rate of 8%
 Repayments on quarterly basis
 Annuity Payment Method
For first Loan – BEGIN
For the second loan – END
Schedules (Full)
 Look at the repayment schedules for both loans
Online payment in contracts
 Can only be made to Current contracts
 Allowed only for interest bearing loans
 Not allowed with Principal increase or decrease
 When EB.ACCRUAL.PARAM linked to the contract has

Last.Day.Inclusive set to “Yes”
 Principal repayment will be considered for interest calculations when
ONLINE.REPAY.TYPE “P” & “I” are on the same ONLINE.EFF.DATE
 If R schedule date and ONLINE.EFF.DATE show system date the R
schedule will not be considered for interest calculations
Online payment in contracts
 Online repayment of Principal and / or interest is possible
 Online Repayment Type

 Principal alone
 Principal and Interest Component
 Interest Component alone
 Online repayment possible only if value date is today or back dated

Amendments to contracts
 Can only be made to Current contracts

 Matured Contracts cannot be amended
 Changes
 Increase / decrease in Principal possible
 Effected through AMOUNT.INCREASE and AMT.V.DATE Fields
 Interest Rate and Spread can be changed
 Effected through NEW.INTEREST.RATE and NEW.SPREAD Fields
 Commission rates can be changed
 Effected through NEW.COM.RATE Field
Workshop - 13
 Use User Menu > Corporate Operations > Loans > Maintain Loans >
Amend/Reverse – Loans
 Pick out a contract opened earlier in workshop 9
 Increase Principal by USD 50,000 and reduce interest rate by 1% with
different future value dates
Schedules (Full)
Rollover
 Contracts can be rolled over manually
 Interest Options on Rollover

 Interest Accrual continued i.e. settle at new maturity date
Change FIN.MAT.DATE Field
No further action required in the case of automatic schedules
 Liquidate Interest
Change FIN.MAT.DATE Field
If frequency not mentioned in INTEREST.DUE.DATE Field, input I
schedule in manual schedule
 Capitalise Interest
Change FIN.MAT.DATE Field. Ensure CAPITALISATION Field is
set to Yes
If frequency not mentioned in INTEREST.DUE.DATE Field, input
I schedule in manual schedule
Workshop - 14
 Use User Menu > Corporate Operations > Loans > Maintain Loans >
Amend/Reverse – Loans
 Roll over the contract used in the previous workshop by another 3 months
by extending the maturity date
 If need be, redraw schedules suitably
Schedules (Full)
 View the effect of changes on repayment schedule
Other facilities
 Broker
 It is possible to use services of Brokers and pay brokerage by using Broker
related Fields – BROKER.CODE, BROKERAGE, BROKER.CCY and
BROKER.AMOUNT
Possible to default other details from BROKER table once a valid Broker
code is filled up
 Negative rate
 It is possible to indicate that Negative rates are required. If
NEGATIVE.RATE Field is set as Yes, then, in case of fixed interest, a
negative rate can be input.
In the case of floating rates, if the effective rate becomes negative due to
negative spread, then that would be allowed
Deposit products
 LD can be used for Loans as well as Deposits

 T24 differentiates products based on category codes
 In addition to the usual Fixed term, call / notice, interest bearing and
discounted products, bank’s own bond issues using liability
commitment and Certificates of deposits are also possible
 CDs are processed using Fixed rate, Interest bearing and A Basis of
interest functionalities
 If the MAT.AMOUNT Field is filled up, T24 automatically calculates the
investment amount and fills up the AMOUNT field accordingly
Quiz 4
1) What should be the input in fields AUTO.SCHEDS and

DEFINE.SCHEDS for creating Manual Schedule ?
Ans : NO in AUTO.SCHEDS and YES in DEFINE.SCHEDS
2) Is it possible to change the interest rate in Fixed Interest type Contract ?

Ans : Yes. Manually setting a new rate in NEW.INT.RATE field
3) What is the maximum number of days allowed in T24 for a Notice

Contract?
Ans : 999
LD Other features
Third Party Limits
 A bank which makes advances to customers on the basis of

instruments like bills, cheques etc issued by a third party, may want to
exercise limit controls over the presenter of the instrument as well as
the issuer of the instrument
 THIRD.PARTY.ID and THIRD.LIM.REF Fields can be used to input Id

of the third party whose limit should be updated and also the
corresponding limit reference that needs to be updated
 If the limit reference is left blank, limit reference of the product is
automatically defaulted
Product Features - Tax
 Tax can be collected on any component of Loans and Deposits like

Principal, Interest and Commission
 In case of Principal, Tax is calculated and collected at the time of drawdown
 Tax rates are defined in TAX table. These record Ids can be indicated
in LD in TAX.PRINCIPAL.KEY, TAX.COMMISSION.KEY and/or
TAX.INTEREST.KEY Fields to collect taxes for the respective
components
 If taxes are going to be different for different groups of customers /

products, Groups are formed in APPL.GEN.CONDITION table
 It is possible to indicate different Tax records for each group in
TAX.TYPE.CONDITION table
 CONTRACT.GRP Field together with TAX.PRINCIPAL.TYPE,
TAX.INTEREST.TYPE, TAX.COMMISSN.TYPE Fields are used if different
tax rates are to be used for different groups
Product features - Accounting
 Accounting entries passed for LD are Contingent as well as Non

contingent in nature
 STMT.ENTRY and CATEG.ENTRY passed for Debit / Credit to Accounts
and PL heads respectively
Accounts include Customer accounts and Internal accounts
PL heads include Interest, Charges and Commission
 RE.CONSOL.SPEC.ENTRY passed online in respect of Contracts
For commitment, passed during close of business, for Commitment
amount ,less any loan under that, drawn during the day
 Asset types: FORWARDCR, FORWARDDB, LIVECMT, LIVECR, LIVEDB,
OVERDUEDB, NABCR, NABDB
 Transaction codes specified through LD.TXN.CODES,
LMM.INSTALL.CONDS and FT.COMMISSION.TYPE used
 RE.TXN.CODE: CNW, FNW, ACC, MAT, CUS, APP etc
Accounting entries for LD Loan
US$ 1 M loan agreed to give after 1 day

Monthly interest accrual
Bullet repayment of Principal and interest
LD Contingent CUSTOMER A/C
1,000,000 1,000,000 1,000,000 1,000,000

Transaction Date Value Date 7,500 Value Date
Maturity
Forward DB
STMT.ENTRY
RE.CONSOL.SPEC.ENTRY Interest accrued
LD Asset receivable Interest Income P&L
1,000,000 2,500 7,500 2,500
1,000,000
Maturity
2,500 Maturity 2,500
Value Date
2,500 2,500
Accrual Accrual
PL Category 50XXX
Live DB LMM.INSTALL.CONDS LMM.INSTALL.CONDS
RE.CONSOL.SPEC.ENTRY RE.CONSOL.SPEC.ENTRY CATEG.ENTRY
Standard Enquiries
 Standard enquiries available include
 Loans disbursed today / Deposits received today
 Product wise list of loans / deposits
 LD schedules
 LD summary
 List of commitment contracts
 Drawings under commitments
 Interest accruals
 Repayment history
Workshop - 15
Loans by Product
 View loans by products
Commitments
 View outstanding Commitments
 Use User Menu > Corporate Operations > Loans > Enquiries > Loans
disbursed today
 View Loans disbursed on the system date
Standard Reports
 Standard reports include
 Imminent Maturities
 Maturing Events
 Contract Accruals
 Rate Revisions
 Contract status
System maintained Tables
 LMM.ACCOUNT.BALANCES
 Contains information relating to principal movements, interest accruals,
commission accruals and funds paid / received in the contract
 LMM.SCHEDULES
 Diary of future events for authorised contracts in LD and MM
 Id is made up by contract number, event date (in Julian date format like
2001305 to indicate 305th day in the year 2001) and a suffix of 00
 LMM.SCHEDULES.PAST
 Events from LMM.SCHEDULES after the event date
Exception Sending Payment activity. If a Payment has to be sent two
days prior to value date of payment according to DAYS.DELIVERY Field
in CURRENCY table, then will remain in LMM.SCHEDULES file for two
more working days
 Updated in Close of business processing. Same Key as in
LMM.SCHEDULES
 SETTLEMENT.RATES
 Created when a contract has liquidation account currency different from

deal currency
 Used to store liquidation exchange rates for various event dates and
currencies
 User may also input an exchange rate
 PROTECTION.CLAUSE Field
If set to YES, system derived exchange rate is compared with historic
exchange rates applied and the best exchange rate (whichever is more
beneficial to the Bank) considered for liquidation
If set to NO, either the user input rate, and in its absence, system derived
rate would be used for liquidation
 EB.CONTRACT.BALANCES
 Balance file containing details of consolidation key and Asset type wise
balances
 Principal outstanding amounts in product files and any related amount fields
such as accrued interest, charges, commissions, etc.
 Current and historical details are maintained
 Information held currency wise, Asset type wise and date wise balance as
well as consolidation key
LD Dependency diagram
FT.COMMISSION.TYPE
BASIC.RATE.TEXT
BASIC.INTEREST LMM.CHARGE.CONDITIONS
CUSTOMER
CATEGORY INTEREST.BASIS LMM.INSTALL.CONDS
ACCOUNT PERIODIC.INTEREST LD.TXN.CODES

CURRENCY
CUSTOMER.SSI LD
SEC.ACC.MASTER LD.TXN.TYPE.CONDITION
CUSTOMER.CCY.ACCT APPL.GEN.CONDITION
AGENCY
LD.GROUP.CONDITION LMM.ACCOUNT.BALANCES
NOSTRO.ACCOUNT
LMM.SCHEDULE.DATES
ACCOUNT.CLASS
LMM.SCHEDULES
LIMIT
LMM.SCHEDULES.PAST
LMM.ADVICES
COLLATERAL
LMM.ACTION.CODES
LMM.ACTIVITY
LMM.HISTORY.LIST
LMM.TEXT
SETTLEMENT.RATES
Summary
 We have so far seen
 The dependencies and linkages between LD module and T24 Core and
other applications
 Main business features of the Loans and Deposits module

Thank You
TEMENOS EDUCATION CENTRE

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Copyright © 2010 Temenos Headquarters SA

T3TLD-Loans and Deposits R15

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T24 Loans and Deposits

TEMENOS EDUCATION CENTRE

 Loans and Deposits - dependencies

 Application specific Parameter tables, connected with Loans and

 Loans and Deposits build sequence

 Product features of Loans and Deposits

 Standard Enquiries, Reports and System maintained Tables related to

Call / Notice Interest

 LD also uses other Static tables

 Category codes exclusively used by LD

Possible to set a negative interest rate for MM,SW,DX

Possible to give a negative spread in LD

In LD contract, these are linked through LMM.CHARGE.CONDITIONS

Also possible to accrue or amortise charges on Daily or Monthly basis by using

INTERNAL SUSPENSE ACCOUNT

Possible to indicate countries and Regions in BUSINESS.DAY.DEFINITION

 Different Interest day basis for calculation of interest possible

1) Only Fixed Interest type is allowed for a Discounted Type of LD Contract

2) Periodic Interest type is allowed for a Call Contract

3) Default order of drawdown account for settlement of LD Contract is

4) Interest Day Basis A2 is similar to A1 but additional interest is calculated

 Parameter tables to be set up for LD

 Common parameter table for LD and MM

 Major groups of fields relevant to LD are

 Other important fields

 RETURN.INT and RETURN.COM Fields

 Various events happen during the life of a LD contract

 Accounting entries are duly passed affecting Customer account and PL

 In LD.TXN.CODES, we can indicate which Transaction code is to be

 Charges collectable on loans are defined in FT.COMMISSION.TYPE

 These charges could be taken on value date and/or scheduled dates

 Possible for Bank to opt to receive or pay charges using PAY.RECEIVE

 CATEGORY.CODE Field can be used to indicate a PL Category code

 Transaction codes of FT.COMMISSION.TYPE or those defined in

 Used to define the set of rules governing a specific product category

 Option available to indicate whether to process maturity at Start of day

 Currency wise conditions can be set for the following:

 When a contract has liquidation account currency different from deal

 Interest or Commission accruals can be calculated by including the first

 Frequency for interest could be set as Daily, Business day, weekly,

 Special conditions on interest spread and charges applicable to groups

 Various events in life cycle of a LD contract are hard coded and

 In LMM.ADVICES, we can specify, product wise, the type of advice (s)

 For some activities, it is possible to produce advices prior to the activity

 Other ways in which this table can be put to use are

 When settlement instructions of counter party are not known, proceeds

 Advice text to be printed on confirmations are specified in LMM.TEXT

 Id is the Category code mentioned in ACCOUNT.CLASS for

1) Is it possible to refund Interest, commission and taxes on foreclosure of

2) 29th April is a scheduled date for loan repayment. It is a holiday. 30th

3) User needs to produce confirmation advices, activity wise. Where can

 Suited for Commercial and Retail clients

 Asset products include

 Liabilities include Deposits including certificate of deposits

 Preferential access to bank funds

 Can be stand-alone commitment or linked to loan drawings

 Commitment can be revolving or non revolving

 Multiple loan drawings / different loan contracts can be linked to a

 Revolving / Non revolving commitments could be drawn in tranches

 RE.CONSOL.SPEC.ENTRY is passed at the end of the day to mark

 When Non cumulative Commitment is issued in tranches, contingent

 Commitment fee could be charged on the full amount of commitment or

 While charging fees on unutilised portion, possible to input multiple