Class User Manual - Oracle Documentation

Class User Manual - Oracle Documentation
Class User Guide
Oracle FLEXCUBE Universal Banking
Release 12.0.87.1.0
Part No. E56600-01
August 2014
Class User Guide
August 2014
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Contents
1.
Preface ...................................................................................................... 1-1
1.1
1.2
1.3
1.4
1.5
1.6
2.
1-1
1-1
1-1
1-1
1-1
1-2
Creating Classes ...................................................................................... 2-1
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
3.
Introduction..............................................................................................................
Audience..................................................................................................................
Documentation Accessibility....................................................................................
Organization ............................................................................................................
Glossary of Icons.....................................................................................................
Related Documents .................................................................................................
Introduction.............................................................................................................. 2-1
Maintain Interest Class ............................................................................................ 2-1
Maintaining Interest Class ....................................................................................... 2-6
2.3.1 Capturing Interest Limits............................................................................. 2-9
Maintaining Accrual Fee Class ................................................................................ 2-9
2.4.1 Capturing User-Defined Fields ................................................................. 2-10
Maintaining Charge Class ..................................................................................... 2-11
2.5.1 Events ...................................................................................................... 2-13
Maintaining Old Charges Class ............................................................................. 2-16
2.6.1 Capturing User-Defined Fields ................................................................. 2-18
Maintaining Tax Class ........................................................................................... 2-18
2.7.1 Defining Issuer Taxes as Classes ............................................................ 2-20
Maintaining Adhoc Fee Class................................................................................ 2-22
Maintaining Branch Currency Restriction Class .................................................... 2-22
Maintaining Customer Restriction Class................................................................ 2-24
Maintaining Discount Accrual Class ...................................................................... 2-26
Maintaining Events Class ...................................................................................... 2-29
2.12.1 Capturing Accounting Entries ................................................................... 2-30
2.12.2 Capturing Advices .................................................................................... 2-31
2.12.3 Capturing User-Defined Fields ................................................................. 2-32
2.12.4 Maintaining Event Class for Account Initial Funding ................................ 2-32
Maintaining Role to Head Mapping Class ............................................................. 2-35
2.13.1 Capturing User-Defined Fields ................................................................. 2-36
2.13.2 Maintaining a Class for Account Opening Charge.................................... 2-37
Function ID Glossary ............................................................................... 3-1
1. Preface
1.1
Introduction
This manual is designed to help you get acquainted with the manner in which various classes
can be set up in Oracle FLEXCUBE.
You can further obtain information specific to a particular field by placing the cursor on the
relevant field and striking <F1> on the keyboard.
1.2
Audience
This manual is intended for the following User/User Roles:
1.3
Role
Function
Back office clerk
Input functions for contracts
Back office managers/officers
Authorization functions
Product Managers
Product definition and authorization
End of day operators
Processing during end of day/ beginning of day
Financial Controller / Product Managers
Generation of reports
Documentation Accessibility
For information about Oracle's commitment to accessibility, visit the Oracle Accessibility
Program website at http://www.oracle.com/pls/topic/lookup?ctx=acc&id=docacc.
1.4
1.5
Organization
Chapter 1
About this Manual gives a brief introduction to the module. It also lists the various chapters in the User Manual.
Chapter 2
Creating Classes details the procedure to set up different classes in Oracle
FLEXCUBE.
Glossary of Icons
This User Manual may refer to all or some of the following icons.
Icons
Function
Exit
Add row
Delete row
Option List
1-1
1.6
Related Documents
For further information on procedures discussed in the manual, refer to the Oracle
FLEXCUBE manuals on:

Procedures
1-2
2. Creating Classes
2.1
Introduction
You need to create a class and attach certain attributes to it. You can build a charge class, for
instance, with the attributes of a specific type of charge, such as Charges for provision of
services. Similarly, you can build an event class with the attributes of a specific type of events,
such as a Booking a Transaction, Collecting Charges, Cancellation and so on.
Once you create classes, you can link them suitably to products thereby avoiding the need to
specify the generic attributes available in the class.
In Oracle FLEXCUBE, you can categorize these classes into Mandatory and Optional. Unless
certain mandatory classes are maintained, you will not be able to process transactions.
The mandatory classes that you need to maintain are:

Interest Class

Interest Class (SE)

Fee Class

Charge Class

Old Charges Class

Tax Class
The optional classes that you can maintain are:
2.2

Adhoc Fee Class

Branch Currency Restriction Class

Customer Restriction Class

Discount Accrual Class

Events Class

Role to Head Mapping Class
Maintain Interest Class
You need to define the attributes of an interest class, in the ‘Interest Class Definition’ screen,
invoked from the Application Browser. You can invoke the ‘Interest Class Maintenance’
2-1
screen by typing ‘CFDINCLS’ in the field at the top right corner of the Application tool bar and
clicking the adjoining arrow button.
You need to specify the following details:
Class Code
Specify a unique code to identify the class.
Class Description
Specify a brief description for the class.
Rule Code
Specify the rule that should be linked to the class. The adjoining option list displays all valid
rules maintained in the system. You can choose the appropriate one.
Rule Description
The system displays the description based on the rule chosen.
Event
Specify the event at which collection of the interest should be triggered, The adjoining option
list displays all events available in the system for the module specified. You can choose the
appropriate one.
2-2
Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one.
Basis
You can indicate the following details:
Amount Type
If the interest rate type is Fixed or Floating, specify the basis amount on which the interest rate
has to be applied. For example, for the FT module, it could be the Transfer amount, for the
LC module, it could be the LC Contract Amount and so on.
Settlement Currency
The Settlement Currency is the currency in which the interest amount will be calculated. The
interest amount applicable for a contract will be calculated in this currency. The appropriate
conversion rate (defined for the product as the applicable Rate Type) will be applied to carry
out a conversion if the repayment account is in a different currency.
Category
If the interest rate type is Fixed or Floating, specify the type of balance that has to be
considered for interest application. It could be any one of the following:

Expected

Overdue

Normal

Outstanding
Accruals
Check this box to indicate that accruals have to be carried out for the accruable components.
Bulk Amount
When a contract gets rolled over, you may wish to split it into two contracts - one for the
interest amount (I) and the other for the principal amount (P). If you want the floating rate pickup for both the new contracts (tenor/amount) to be based on P+I of the original contract, check
this box.
Allow Amendment
If you would like to allow amendment of the interest amount calculated by the system as per
the charge rule, check this box.
Stop Application
Check this box to indicate that collection should stop for the interest component.
Grace Period
Specify the number of grace days, beyond the main interest due date, after which that interest
component becomes applicable.
Prepayment Method
Select the method for actual prepayment penalty computation from the adjoining drop-down
list. The options available are:

Oracle FLEXCUBE - This option is used where pre-payment has to be applied on the
deposit contract for contract elapsed days.

Custom - If the Prepayment Method is Custom, then the prepayment penalty in this case
will be the minimum of prepayment penalty and Gross interest on the premature
withdrawal amount. The system computes the interest amount to be liquidated due to
2-3
prepayment of principal. You will not be allowed to specify the interest amount during
the Payment input in such a case.
Note
Here, the system does not include the Acquired interest for processing.
Also, if you have chosen the prepayment method as Custom, you cannot prepay or manually
liquidate either the interest or the principal component. This option is used where pre-payment
has to be applied on the deposit contract for contract remaining days.
Main Component
Check this box to indicate that the component should be treated as the main interest
component.
Link Contract as Ratecode
Check this box to indicate that a fixed rate contract may be linked to the floating rate
component, instead of a rate code.
Propagation Required
Check this option to indicate that the charge collected from the borrower must be passed on
to the participants of the contract.
Consider as Discount
Check this box to indicate that the fee component should be considered as part of discount
accrual.
Interest
Specify the following details:
Rate Type
Indicate whether the interest is a Fixed Rate, a Floating Rate or a Special amount. If the Rate
Type is a Floating Rate, you should also specify the Rate Code.
Rate Code
Each Rate Code corresponds to a rate defined for a combination of Currency, Amount (if it is
necessary) and an Effective Date. These details are maintained in the ‘Floating Rates Input’
screen. This rate will be applied to all contracts under products linked to the class.
Code Usage
Specify the method in which the floating rates have to be applied. It could either be automatic
application (meaning the rate has to be applied every time it changes), or periodic application
(meaning the rate has to be applied at a regular frequency, defined for each contract involving
the product linked to this class).
Reset Tenor
Floating interest rates are defined for specific amount slabs and tenor combinations. If you
are defining a floating interest component or a fixed type with rate code attached, you can
indicate the reset tenor for which floating rates need to be picked up.
The tenor that you specify for the component is defaulted to all contracts with which the
floating interest component is associated.
Borrow Lend Indicator
Indicate the nature of the floating rate that needs to be picked up for the interest component.
The options available are:
2-4

Borrow

Lend

Mid
Rate Cycle Type
For floating type of interest components and fixed type with rate code attached, you can
indicate the manner in which floating rates should be applied. The preference that you specify
here is used when an interest component does not fit into any direct parameter defined for the
floating rate code. The options available are:

Up – Choose this option to indicate that the rate of the upper tenor slab should be used.

Down - Choose this option to indicate that the rate of the lower tenor slab should be
used.

Interpolate - Choose this option to indicate that the rate should be interpolated between
the rates of the upper and lower slabs.

Round Off - Choose this option to indicate that the tenor of the component should be
rounded off to the nearest whole number. The rate defined for the derived tenor will be
applied to the component.
Margin Application
Indicate the frequency of margin application by choosing one of the following options from the
drop-down list.
Margin Basis
Indicate the basis for the interest margin and the method for applying the interest margin on
the selected interest component. The available options are:

Facility – The system defaults the margin from the borrower facility contract with which
the drawdown is linked.

Tranche – The system defaults the margin from the borrower tranche contract with
which the drawdown is associated.

Drawdown – If this option is chosen, you must enter the applicable margin when the
interest rate is fixed.

–
This component which you select is excluded from all the processing including
liquidation and this calculation type is only used for margin application.
–
After defining this component, booked formula for main interest component needs
to be modified by replacing INTEREST_RATE with INTEREST_RATE +
MARGIN_RATE. By doing this the interest gets calculated based on resolved
interest rate (i.e. including floating rate and spread if applicable) and the margin.
Customer – If this option is chosen, then the margin will be applicable to all drawdown
contracts under the selected customer.
Limits
Specify the following details:
Currency
Specify the currency of interest rate application. The adjoining option list displays all valid
currency codes maintained in the system. You can choose the appropriate one.
Default Rate
Specify the default rate that should be applied for on contracts under the products linked to
this class.
2-5
Minimum Rate
Specify the minimum interest rate that can be applied on contracts under the products linked
to this class.
Maximum Rate
Specify the maximum interest rate that can be applied on contracts under the products linked
to this class.
Default Spread
You are allowed to specify both positive and negative spread as default for the class you are
maintaining. The system validates this spread against the maximum and minimum spread you
have specified for the currency. Subsequently, the spread will be defaulted to the contract
under the products linked to this class.
Minimum Spread
Specify the minimum spread that can be applied on the rate for the currency.
Maximum Spread
Specify the maximum spread that can be applied on the rate for the currency.
2.3
Maintaining Interest Class
You need to maintain an Interest class specific to the Securities module. For instance, for a
Security, you can build an interest class with the attributes of a specific type of coupon, the
quarterly coupon paid on the current face value.
This section explains how interest classes are built and how attributes are defined for
Securities and Derivatives products and contracts.
You can define the attributes of an interest class, in the ‘Interest Class Maintenance’ screen,
invoked from the Application Browser. You can invoke the ‘Interest Class Maintenance’
screen by typing ‘CFDINTCE’ in the field at the top right corner of the Application tool bar and
clicking the adjoining arrow button.
2-6
Before defining the attributes of an interest class, you should assign the class a unique
identifier, called the Class Code and briefly describe the class. A description would help you
easily identify a class.
Module
An interest class is built for use in a specific module. This is because; an interest component
would be applied on different basis amounts, in different modules.
Note
Please note that the Basis Amount Tags available would depend on the module for which
you build the class.
Interest Type
While building an Interest Class, you can define two kinds of interest:

Primary Interest

Coupon
Events and the Basis Amount
The term Event can be explained with reference to a deal. A deal goes through different
stages in its life cycle, such as:

Deal Booking

Money Settlement of Deal

Reversal of Deal

Cancellation of Deal
Each stage is referred to as an Event in Oracle FLEXCUBE.
The event at which you would like to associate the interest component, being defined, to a
contract is referred to as the Association Event.
The basis on which an interest is calculated is referred to as the Basis Amount. For instance,
a coupon can be on the basis of the current face value of a security. When building an interest
class, you have to specify the tag associated with the Basis Amount.
The attributes defined for an interest class, will default to all products with which you associate
the class. When maintaining interest details for a product, you can change these default
attributes. Contracts maintained under a product will acquire the attributes defined for the
securities product.
Accrual Required
You can choose to accrue the interests due on a contract. To accrue the interest payable on
a contract, choose the ‘Accrual Required’ option.
The accrual details that you define for an interest class will default to all products with which
you associate the class. When maintaining interest accrual details for a product, you can
change these default details. Contracts maintained under a product will acquire the accrual
details defined for the product. However, you can define unique accrual details for a contract.
Rate Type
The interests paid on contracts can be at a Fixed Rate, or on the basis of a Floating Rate. If
you indicate that interests should be calculated on the basis of a Floating Rate, you must
specify the ‘Periodic’ Floating Rate Type.
2-7
For all contracts maintained under products, associated with a class, the interest will be by
default calculated using the specified Rate type.
Default Rate Code
Interest payable on contracts would be calculated at specific rates. When building an interest
component, you have to specify the rate at which the interest should be computed. When
associating a rate code (that you have maintained in the Rate Codes Maintenance screen)
with the interest component that you are building, the rates corresponding to the code will be
used to compute interest.
The details defined for an interest class will default to all products with which the class is
associated. When maintaining interest details for a product, you can change this default
information. Contracts maintained under a product will acquire the interest details defined for
the contract product. However, you can define unique interest details specific to a contract.
When maintaining a contract, you can choose to waive the rate code altogether or amend the
properties of the code to suit the security.
If you allow amendment of a rate code, you can specify if you would like to allow rate code
amendment after the association event.
You can also allow the amendment of the rate value (corresponding to a rate code).
Default Tenor
Each rate code is associated with a tenor. For instance you have a Rate Code ‘LIBOR’. You
can link any number of tenor codes to the same rate code.
Tenor Code
Description
1W
One week rate
2W
Two week rate
2M
Two months rate
6M
Six months rate
1Y
One year rate
When building an interest component, you can specify a Tenor Code that you would like to
associate, with the Floating Interest Rate Code. Interests for contracts (maintained under a
product with which you associate the class) will be calculated using the rate corresponding to
the Rate Code and the Tenor Code.
2-8
2.3.1
Capturing Interest Limits
Click ‘Rate’ button and invoke the ‘Interest Limits’ screen.
2.4
Maintaining Accrual Fee Class
You need to define the attributes of an accrual fee class in the ‘Accrual Fee Class
Maintenance’ screen, invoked from the Application Browser. You can invoke this screen by
typing ‘CFDACFCL’ in the field at the top right corner of the Application tool bar and clicking
the adjoining arrow button.
Here you can specify the following details:
Class Code
Specify a unique code to identify the class.
Class Description
Specify a brief description for the class.
2-9
Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one.
Basis Amount
Select the basis amount from the adjoining drop-down list:

Expected Outstanding Balance

Expected Balance
Fee Type
Select the fee type from the adjoining drop-down list:

Income

Expense
Allow End Date Input
Check this box to indicate that the end date for accrual can be entered at the time of entering
the fee details for a particular class. Otherwise, the maturity date of the associated contract
will get defaulted as the end date for accrual.
Accrual Required
Check this box to indicate that accrual of fees is required.
Consider as Discount
Check this box to indicate that the fee component should be considered as part of discount
accrual.
2.4.1
Capturing User-Defined Fields
You can capture user-defined fields (UDFs) in the ‘User Defined Fields’ screen. Click ‘Fields’
button and invoke the following screen.
Here you can specify the following details:
Field Name
The system displays the UDFs.
Value
Specify the value for each UDF.
2-10
2.5
Maintaining Charge Class
You have to build a charge class, for instance, with the attributes of a specific type of charge,
such as ‘Charges for amending the terms of a transaction’, or ‘Charges for provision of
services’. To recall, a charge rule is built to calculate a specific type of charge component.
Once such a rule is built, you can define attributes like what should be the basis amount on
which the charge rule is applied, when the charge should be associated to the contract and
when the charge should be calculated and collected.
When building a charge class, you define certain attributes such as:

The module in which you would use the class

The charge type (whether borne by the counterparty or by the bank)

The association event

The application event

The liquidation event

The default settlement currency

The default charge rule

The basis amount on which the charge is calculated
You can define the attributes of a charge class in the ‘Charge Class Maintenance’ screen,
invoked from the Application Browser. You can invoke this screen by typing ‘CFDCHGCE’ in
the field at the top right corner of the Application tool bar and clicking the adjoining arrow
button.
The following are the features of the Charge Class Maintenance screen.
Class Code
Before defining the attributes of a charge class, you should assign the class a unique
identifier, called the Class Code and briefly describe the class. A description would help you
easily identify the class.
2-11
Module
A charge class is built for use in a specific module. As a charge component would be applied
on different basis amounts, in different modules. In the Letters of Credit module, for instance,
you would apply a flat processing charge or fee on all LCs. In the Securities module, you could
levy a flat charge or fee on portfolios that you maintain on behalf of a customer. The basis on
which the component is applied is different, in these two cases.
Note
The Basis Amount Tags available would depend on the module for which you build the
class.
Charge Type
Charges can be collected from the counter party or from a third party. You can select one of
the following values from the adjoining drop-down list:

Counter Party – This indicates that the customer is captured as part of the contract.

Third Party – This indicates that the charges are levied on another entity on behalf of
customer (Eg: Custodian)

Their Charges – This indicates that your bank is collecting other bank’s charges as in
the case of LC and BC contracts.
The charges or fee that you levy will be recovered, typically, from the counterparty involved.
Therefore, when building a charge class, you may indicate the charge to be of ‘Counterparty’
type.
Third Party Type
If a charge component that you associate with a product is of ‘third party’ type, specify the
party type.
Debit /Credit
Choose the Debit option in this field, if the charge component associated with the product is
to be debited to the customer. If you would bear the charge component, choose the ‘Credit’
option.
The following example illustrates how a charge could be of a ‘Credit’ type.
Propagation Required
Check this option to indicate that the charge collected from the borrower must be passed on
to the participants of the contract.
Net Consideration
The sum of the different components of a contract determines the net value of the contract.
You can indicate that a charge component should be taken into account when determining
the net value of a contract by choosing the Net Consideration option.
Note
The Net Consideration option is applicable if you are defining a charge class for Securities
module.
Add/Subtract
If you choose to include the charge component in the net value, you should indicate if the
charge component is to be added, while calculating the net consideration amount, or
subtracted.
2-12
SWIFT Qualifier
You can report the charge component of a contract in the SWIFT messages that you
generate. To do this, identify the component, when building it in the ‘Charge Class
Maintenance’ screen, with the appropriate SWIFT code.
2.5.1
Events
A contract goes through different stages in its life cycle, such as:

Initiation

Amendment

Rollover
Each of these stages is referred to as an ‘Event’ in Oracle FLEXCUBE.
At any of these events, you can choose to apply a charge or fee. When defining a charge
class, you should specify:

The association event

The application event

Liquidation event
The event at which you would like to associate a charge component to a contract is referred
to as the Association Event. At this event, no accounting entry (for the charge component) is
passed.
The event at which the charge component is actually calculated is referred to as the
Application Event. At this event, no accounting entry (for the charge component) is passed.
The charge or fee is liquidated at the Liquidation event that you specify.
If the event chosen for the liquidation of the charge component at the charge class and the
event chosen for liquidating the same charge component at the ‘Product Events and
Accounting Entries’ screen are different, the charge will not be liquidated and accounting
entries will not be posted.
In FX, FT and SI modules, the concept of association, application and liquidation events is not
applicable. The charge component is liquidated at the event chosen in the product. Hence,
charge class for these three modules are defined under Old Charge Class (The Old Charge
Class is found under product class. The charge classes for FX, FT and SI have to be defined
under this.). The charge components are linked to three different events. This mapping gives
you the option to change the charge amount before it is liquidated.
Basis Amount Tag
The basis on which interest, charge, fee, or tax is calculated is referred to as the Basis
Amount. (A charge or fee can be on the basis of the contract amount, for instance.) The
different basis amounts, available in a module, are associated with a unique ‘tag’. When
building a charge component, you have to specify the tag associated with the Basis Amount.
When charge or fee is calculated for a contract, the basis amount corresponding to the tag
will be picked up automatically.
Basis amount refers to:

Principal amount or commitment

Transaction amount in the case of a teller entry

Transfer amount in case of a Remittance

SI Amount in case of Standing Instruction
2-13

LC amount in the case of a Letter of Credit

Bill amount in the case of a Bill

Buy/Sell amount in the case of an FX deal

Deal Nominal amount for a Security Deal
Default Charge Rule
You can link a charge rule that you have defined to the charge component that you are
building. When you link a rule to a component, the attributes that you have defined for the rule
will default to the component.
To recall, a charge rule identifies the method in which charge or fee of a particular type is to
be calculated. A rule is built with, amongst others, the following attributes:

The charge currency

Whether the charge or fee is to be a flat amount or calculated on a rate basis

The minimum and maximum charge that can be applied

The tier or slab structure on which the charge is to be applied

The customer and currency restrictions, etc.
The charge component to which you link a rule acquires these properties. Charges for the
product with which you associate a charge component will be calculated, by default,
according to the rule linked to the component. However, when processing a contract, you can
choose to waive the rule altogether.
When building a charge class, you can choose to allow the amendment of the rule linked to
it, in the following conditions:

You can choose to allow amendment after the association event

You can choose to allow amendment after the application event

You can choose to allow amendment of the charge amount
Default Settlement Currency
Charges or fees levied on a contract will be settled in the Settlement Currency that you specify
for the charge class associated with the product (under which the contract is processed).
However, when processing a contract, you can choose to settle the charge in another
currency.
The charge currency defined for the rule is used only for booking charges. The actual
settlement is done in the default settlement currency' maintained for the charge class. The
final charge is computed based on preferences defined in the charge rule set-up. The amount
is converted to the settlement currency in case the charge currency is different from the
contract currency.
Note
–
For the liquidation of charge components with a charge currency not equal to the
contract currency during discounting, the charge amount is calculated in the
contract currency based on the exchange rate between the settlement currency and
the contract currency as on the discounting date. The charge amount in contract
currency is used for accounting.
–
If the charge currency is different from the contract currency and the contract currency is same as the settlement account currency, the exchange rate maintained
for the settlement account through the ‘Settlement Message Details – Account Details’ screen is used to convert the charge amount into the contract currency
amount.
2-14
When you associate a charge component with a product, you can choose to allow the
amendment of the rule linked to it, under the following conditions:
Allow Rule Amendments
If you would like to allow the amendment of a rule for a charge component when linked to a
contract, check this box.
Amend after Association
If you would like to allow the amendment after association of a rule for a charge component,
check this box. Once checked the system will allow you to modify the rule after the association
event is triggered for the linked contract.
Allow Amount Amendment
If you would like to allow amendment of the charge amount calculated by the system as per
the charge rule, check this box.
Amend After Application
If you would like to allow the amendment of the charge amount after application of a rule for
a charge component, check this box. Once checked the system will allow you to modify the
charge amount after the application event is triggered for the linked contract.
Default Waiver
Check this box to indicate that even if charge is computed, it should not be liquidated.
Capitalize
You can capitalize the payment of charges and fees. If the charge is not paid on a scheduled
date, the outstanding charge amount will be added to the outstanding principal and this
becomes the principal for the next schedule. If a partial payment has been made, the unpaid
amount will be capitalized (the unpaid charge is added to the unpaid principal and this
becomes the principal for the next schedule).
Note
If the ‘Capitalize’ option is not checked for the broker, deal, product and currency combination, then the option ‘Consider as discount’ cannot be checked for the securities module.
Consider as Discount
While defining a charge class for either the securities or the bills module, you can indicate
whether the charge component is to be considered for discount accrual on a constant yield
basis.
If you select this option the charge received against the component is used in the computation
of the constant yield and subsequently amortized over the tenor of the associated contract.
Checking this option also indicates that the component is to be used for IRR calculation.
Note
IRR, the Internal Rate of Return is the annualized effective compounded return rate which
can be earned on the invested capital, i.e. the yield on the investment.
Accrual Required
Checking this indicates that the charges have to be accrued. Subsequently, the charges are
accrued using the upfront fee system.
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Note
This option is disabled for BC contracts.
Discount Basis
While defining a charge class for the bills module, you can define the discount basis for the
purpose of IRR computation. You can choose either of the following as discount basis:

Inflow – If you choose Inflow, the charge will be considered as an inflow for IRR
computation

Outflow – If you choose Outflow, the charge will be treated as an outflow for IRR
computation
You can define discount basis only if the ‘Consider as Discount’ option is enabled. If you have
not opted for ‘Consider as Discount’, the Discount Basis field will be disabled. If the ‘Consider
as Discount’ option is enabled Discount basis has to be defined. On enabling the ‘Consider
as Discount’, the default value of Discount Basis will be ‘Inflow’ and you will have to change
it to ‘Outflow’ if required.
2.6
Maintaining Old Charges Class
You have to define a charge class for transactions in FT, FX and SI modules using the
‘Charge Class Maintenance’ screen, invoked from the Application Browser. You can invoke
this screen by typing ‘CFDOCHCL’ in the field at the top right corner of the Application tool
bar and clicking the adjoining arrow button.
Here you can specify the following details:
Class Details
Indicate the following basic details.
Class Code
Specify a unique code to identify the class.
2-16
Class Description
Specify a brief description for the class.
Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one.
Class Preferences
Specify the following class preferences:
Rule Identification
Specify the rule that should be linked to the class. The adjoining option list displays all valid
rules maintained in the system. You can choose the appropriate one.
Description
The system displays the description based on the rule chosen.
Component Description
Define a component here for the rule. Based on this component, six corresponding
accounting roles will be generated by the system.
Amount Type
Specify the basis amount type for collection of charge. The adjoining option list displays all
valid basis amount types available in the system. You can choose the appropriate one.
Settlement Currency
Specify the currency for collection of the charge. The adjoining option list displays all valid
currency codes maintained in the system. You can choose the appropriate one.
Stop Application
Check this box to indicate that collection should stop for the charge component.
Category
Select ‘Normal’ as the category of the basis amount on which charge should be collected.
Event
Specify the event at which collection of the charge should be triggered, The adjoining option
list displays all events available in the system for the module specified. You can choose the
appropriate one.
Advice Charge
Check this box to indicate that charge should be collected for dispatching the customer
advice.
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2.6.1
Capturing User-Defined Fields
You can capture user-defined fields (UDFs) in the ‘User Defined Fields’ screen. Click ‘Fields’
button and invoke the following screen.
Here you can specify the following details:
Field Name
The system displays the UDFs.
Value
Specify the value for each UDF.
2.7
Maintaining Tax Class
You can define the attributes of a transaction level tax under the corresponding section of the
‘Tax Class Maintenance’ screen. You can invoke this screen by typing ‘TADTAXCL’ in the
field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
2-18
Before defining the attributes of a Transaction Tax Class, assign the class a unique identifier,
called the Class Code, and briefly describe the class. A description would help easily identify
a class.
Module
A tax class is built for use in a specific module. This is because the basis amounts on which
the tax is applied could vary with the modules. In the Foreign Exchange module, for instance,
you might want to levy tax on the brokerage paid. In the Securities module, you might have to
pay a tax on the value of a security that you purchase. The basis on which the tax component
is calculated is different in these two cases.
Note
The Basis Amount Tags available, in this screen, would depend on the module for which
you build the class.
Tax
The type of tax indicates who bears the tax, whether the bank or the customer.
Withholding
Withholding type tax is borne by the beneficiary on an income (either the bank or the
customer). For example, the tax on the brokerage paid would be borne by the broker. You
withhold this component in a Tax Payable account, by debiting the customer account (since
brokers are defined as Customers in Oracle FLEXCUBE) and later paying the tax to the
government on behalf of the broker.
Expense Type
If you choose to bear the tax that is payable on brokerage, you would define it as an expense
type of tax. The tax entries, in this case, would be posted to an Expense account.
If you bear the tax, there could either be an immediate cash Outflow or payment, or a mere
crediting of it to a Tax Payable account. In the latter case, there would not be an immediate
Outflow. The tax would be paid at a later date, from the Tax Payable account.
The Net Consideration
The sum of the different components of a contract determines the net value of the contract.
To indicate that a transaction level tax component should be taken into account when
determining the net value of a contract, choose the Net Consideration option.
If you choose to include the tax component in the net value of the contract, you should also
indicate if the tax component is to be added or subtracted, while calculating the net
consideration amount.
Defining the Events and the Basis Amount
Each contract that your bank enters into goes through different stages, each of which is
referred to as an Event in Oracle FLEXCUBE.
A securities deal, for instance, goes through different stages in its life cycle, such as:

Deal Booking

Money Settlement of Securities Deal

Settlement of Securities Deal

Reversal of Securities Deal

Cancellation of Securities Deal
Each of these stages is referred to as an Event in Oracle FLEXCUBE.
2-19
The following are examples of the events for a portfolio that you maintain:

Booking of Contingent Asset

Accrual of Discount Earned

Accrual of Interest Earned

Forward Profit and Loss Accrual
At any of these events, you can choose to apply a tax. The event at which you would like to
associate a tax component, is referred to as the Association Event. At this event, no
accounting entry (for the tax component) is passed.
The event at which the tax component is actually computed is referred to as the Application
Event. The tax is liquidated at the Liquidation Event.
The basis on which a tax is calculated is referred to as the Basis Amount. A tax can be on the
basis of the principal, the brokerage paid and so on. When building a tax class, you have to
specify the tag associated with the Basis Amount.
Choosing the Default Tax Rule
A tax rule can be linked to the tax component that you are building. When you link a rule to a
component, the attributes that you have defined for the rule, will default to the component.
A tax rule identifies the method in which tax, is to be calculated. A rule is built with attributes
such as the following:

The tax currency

Whether the tax is to be a flat amount or calculated on a rate basis

The minimum and maximum tax that can be applied

The tier or slab structure on which the tax is to be applied

The currency restrictions, etc.
The tax component to which you link a rule acquires ITS properties. Tax for the contracts with
which you associate a tax component will, by default, be calculated according to the rule
linked to the component. However, when processing a contract, you can choose to waive the
rule.
When building a tax class, you can choose to allow the amendment of the rule linked to it,
under the following conditions:

You can choose to allow amendment after the association event

You can choose to allow amendment after the application event

You can choose to allow amendment of the tax amount
Including a Component in SWIFT Messages
To report a component of a contract in the SWIFT messages that you generate, identify the
component with the appropriate SWIFT code. You can identify a tax component with its
SWIFT code when building the component.
2.7.1
Defining Issuer Taxes as Classes
An issuer tax can be levied on the coupon paid, or on a cash dividend. The issuer of a security
determines the tax. To process the tax levied on a security, you have to maintain Issuer Tax
classes.
An Issuer Tax class can be maintained in its corresponding section of the Tax Class
Maintenance screen invoked from the Application Browser.
2-20
Note
Please note that it is not necessary to associate tax rules to an Issuer Tax class. For an
Issuer Tax component, you only have to furnish the following details:
–
The Association Event
–
The Basis Amount
–
The Rate Code
–
Other operational controls
A security goes through different stages in its life cycle, such as:

Booking

Interest Accrual

Liquidation, etc.
Each stage is referred to as an Event, in Oracle FLEXCUBE. When defining an Issuer Tax
class, you should specify the following:

The Association Event

Basis Amount
The event at which you would like to associate a tax component to a security is referred to as
the Association Event.
The basis on which interest, charge or tax is calculated or levied is referred to as the Basis
Amount. (An Issuer Tax can be on the basis of the coupon paid, or on a cash dividend.) The
different basis amounts available in the Securities module are associated with a unique ‘tag’.
When building a tax component, you have to specify the tag associated with the Basis
Amount. When tax is calculated for a security, the basis amount corresponding to the tag will
be picked up automatically.
2-21
2.8
Maintaining Adhoc Fee Class
You can define the attributes of an adhoc fee class in the ‘Adhoc Charges’ screen, invoked
from the Application Browser. You can invoke this screen by typing ‘CFDADFEE’ in the field
at the top right corner of the Application tool bar and clicking the adjoining arrow button.
Here you can maintain the following details.
Class Code
Specify a unique identifier for the class.
Description
Specify a description for the class code.
Report Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one.
Module Description
The system displays a brief description of the chosen module.
Participation Propagation
Check this box to indicate that the charge collected should be propagated to all participants
of the transaction.
2.9
Maintaining Branch Currency Restriction Class
You can define the attributes of a branch and currency restriction class in the ‘Branch
Currency Restrictions Class Maintenance’ screen, invoked from the Application Browser. You
2-22
can invoke this screen by typing ‘CSDCBRCL’ in the field at the top right corner of the
Application tool bar and clicking the adjoining arrow button.
Here you can specify the following details:
Class Code
Specify a unique code to identify the class.
Class Description
Specify a brief description for the class.
Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one.
Module Description
The system displays a brief description of the chosen module.
Branch Restrictions
Indicate whether you want to create a list of allowed branches or disallowed branches by
choosing one of the following options:

Allowed

Disallowed
Currency Restrictions
Indicate whether you want to create a list of allowed currencies or disallowed currencies by
choosing one of the following options:

Allowed

Disallowed
2-23
Branch Restrictions
Specify the following details:
Branch Code
Specify the branch that should be included in the allowed or disallowed list. The adjoining
option list displays all branch codes available in the system. You can choose the appropriate
one.
Description
The system displays a brief description of the branch code.
You can choose multiple branches.
Currency Restrictions
Specify the following details:
Currency Code
Specify the currency that should be included in the allowed or disallowed list. The adjoining
option list displays all currency codes available in the system. You can choose the appropriate
one.
Description
The system displays a brief description of the currency code.
You can choose multiple currencies.
2.10 Maintaining Customer Restriction Class
You can define the attributes of a customer category and customer restriction class in the
‘Branch Currency Restrictions Class Maintenance’ screen, invoked from the Application
2-24
Browser. You can invoke this screen by typing ‘CSDCUCCL’ in the field at the top right corner
of the Application tool bar and clicking the adjoining arrow button.
Here you can specify the following details:
Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one.
Module Description
The system displays a brief description of the chosen module.
Class Code
Specify a unique code to identify the class.
Class Description
Specify a brief description for the class.
Restriction Type
Indicate whether you want to create a list of allowed customers or disallowed customers by
choosing one of the following options:

Allowed

Disallowed
2-25
Customer Categories
Specify the following details:
Code
Specify the customer category code that should be included in the allowed or disallowed list.
The adjoining option list displays all customer category codes available in the system. You
can choose the appropriate one.
Description
The system displays a brief description of the branch code.
You can choose multiple customer categories.
Customer Access Class
You can exclude certain customers belonging to the allowed/disallowed category from being
part of the list.
Customer ID
Specify the customer ID that you want to exclude from the allowed/disallowed list. The
adjoining option list displays all customer identification number (CIF) available in the system.
You can choose the appropriate one.
Category
The system displays the category to which the customer belongs.
Customer Name
The system displays the name of the customer.
Restriction Type
If you have maintained an allowed list, choose the option ‘Disallowed’ and vice-versa.
2.11 Maintaining Discount Accrual Class
A discount accrual fee class specifies the accrual parameters for interest, charges and fees.
Before defining the attributes of a discount accrual fee class, you should assign the class a
unique identifier, called the Class Code and briefly describe the class. A description would
help you easily identify the class.
When building a discount accrual fee class, you define certain attributes such as:

Whether Discount accrual should be performed for the class.

The frequency at which discount accrual should be performed. This can be either Daily
or Monthly. For monthly accruals, the discount accrual will be done on the last day of
the month.

How foreclosures in respect of the contracts using the class, must be handled. You can
opt for complete accruals, or refund.

The day count methods for each currency using the class. You can define the day count
methods for both the numerator and the denominator.
2-26
You can define the attributes of a discount accrual fee class in the ‘Discount Accrual Class
Maintenance’ screen. You can invoke this screen by typing ‘DADACRCL’ in the field at the top
right corner of the Application tool bar and clicking the adjoining arrow button.
You can specify the following details.
Class Code
Specify a unique code to identify the class.
Class Description
Specify a brief description for the class.
Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one.
Module Description
The system displays a brief description of the chosen module.
Accrual Preference
Specify the following details:
Discount Accrual Required
Check this box to indicate that discount accrual is required.
Accrual Frequency
If you check the box ‘Accrual Required’, you will have to select the accrual frequency from the
adjoining drop-down list:
2-27

Daily

Weekly

Monthly

Half-Yearly

Annual
Handling of Foreclosure
Select the method of handling foreclosure from the adjoining drop-down list:

Complete Accrual

Refund
Acquisition Type
The Acquisition Type is determined by the cash flows of Interest, charges and fees for which
'Consider as Discount' option is checked. The drop down list comprises of the following
values:

Par

Par/Discount

Par/Premium

Par/Discount/Premium
If the incoming cash flows of all the above components are greater than outgoing cash flows
considering Incoming flow as Positive (In case of Loans) then acquisition type is considered
as Discount.
If the incoming cash flows of all the above components are less than outgoing cash flows
considering Incoming flow as Positive (In case of Loan) then acquisition type is considered as
Premium.
If the incoming cash flows of all the above components are equal to outgoing cash flows
considering Incoming flow as Positive (In case of Loan) then acquisition type is considered as
Par.
Class Currency Preference
Specify the following details:
Currency
Specify the currency code. The adjoining option list displays all currency codes available in
the system. You can choose the appropriate one.
Currency Name
The system displays the name of the currency.
Numerator Method
Specify the numerator method.
Denominator Method
Specify the denominator method.
You can maintain multiple currency codes.
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2.12 Maintaining Events Class
You can build a charge class, for instance, with the attributes of a specific type of charge, such
as Charges for provision of services. Similarly, you can build an event class with the attributes
of a specific type of events, such as a Booking a Transaction, Collecting Charges,
Cancellation and so on.
You can identify an Events Class with a unique Code and Description. When you define an
Events Class, you choose, first of all, the set of events that would belong to the class. Events
are, typically, unique to a module.
You can build the events that you would like to include in an Events Class in the ‘Events Class
Maintenance’ screen. You can invoke this screen by typing ‘CSDACTCL’ in the field at the top
right corner of the Application tool bar and clicking on the adjoining arrow button.
Here you can specify the following details:
Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one. Based on the
module chose, the corresponding events will be available for selection.
Module Description
The system displays a brief description of the chosen module.
Class Code
Specify a unique code to identify the class.
Class Description
Specify a brief description for the class.
Event Class
You can specify the following details.
2-29
2.12.1
Capturing Accounting Entries
For every event constituting the class that you are building, you have to specify the accounting
entries that should be passed (if any), and the advices that should be generated. You can do
this through the ‘Accounting Entries’ screen.
The system displays the following details from the main screen:

Class Code

Class Description

Event Code

Event Description
You can specify the following accounting details:

Accounting Role

Amount Tag

Transaction Code

Netting Indicator

MIS Head
2-30
2.12.2
Capturing Advices
At an event, you can opt to generate an advice if the accounting entry involves a customer
account. Click ‘Advices’ button to define the advices that should be generated for an event.
The system displays the following details from the main screen:

Class Code

Class Description

Event Code

Event Description
Event Advice Class
You need to specify the following details:
Advice Name
Specify the advices that you would like to generate. The adjoining option list displays all
advices that can be generated at an event. You can choose the appropriate one.
Description
The system displays a brief description of the advice.
Generation Time
Specify the time of generation.
Suppress
Select this option to suppress this message.
Priority
You can indicate the order of importance in the Priority field.
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2.12.3
Capturing User-Defined Fields
You can capture user-defined fields (UDFs) in the ‘User Defined Fields’ screen. Click ‘Fields’
button and invoke the following screen.
Here you can specify the following details:
Field Name
Specify the UDF that should be linked to the class. The adjoining option list displays all valid
UDFs maintained in the system. You can choose the appropriate one.
Value
Specify the value for each UDF. You can maintain multiple UDFs.
2.12.4
Maintaining Event Class for Account Initial Funding
You can create an event class to define accounting entries that should be posted for initial
funding on a customer account. Similarly, you can also define accounting entries for charges
2-32
that should be collected on account opening. For this, you need to invoke the ‘Events Class
Maintenance’ screen.
Specify the following values.
Class Code
Specify a unique identifier for the class code.
Description
Give a brief description to identify the class code.
Module
Specify ‘DE’ as the module code for the event class.
Module Description
The system displays the description as ‘Data Entry’ on specifying ‘DE’ as the module.
Event Class
Specify the following events.
Event Code
Specify ‘INIT’.
2-33
Click ‘Accounting Entries’ button and invoke the following screen.
You need to maintain the following accounting entries.
Accounting Role
Amount Tag
Dr/Cr
Description
OFS_ACC
TXN_AMT
Debit
Offset Account
OFS_ACC_USER
TXN_AMT
Credit
Customer Account
CHARGEINC
CHG-AMT
Credit
Charge Income
OFS_ACC_USER
CHG-AMT
Debit
Customer Account.
Click ‘Advices’ button and invoke the following screen.
You need to associate the message ‘ACC_OPADV’ to the event ‘INIT’.
Refer the section’ Maintaining Message Type for Account Opening’ in the chapter titled
‘Maintaining Messaging Branch Preferences’ in the Messaging System User Manual for
details about maintaining messages.
2-34
2.13 Maintaining Role to Head Mapping Class
You can build a role to head mapping class in the ‘Role to Head Mapping Class Maintenance’
screen. You can invoke this screen by typing ‘CSDRHCLM’ in the field at the top right corner
of the Application tool bar and clicking on the adjoining arrow button.
Here you can specify the following details:
Class Code
Specify a unique code to identify the class.
Class Description
Specify a brief description for the class.
Module
Specify the module to which the class should be applicable. The adjoining option list displays
all module codes available in the system. You can choose the appropriate one.
Module Description
The system displays a brief description of the chosen module.
Role to Head Mapping
Specify the following details:
Accounting Role
Specify an Accounting Role. The adjoining option list displays all roles available in the system.
You can select the appropriate one by double clicking on it. Next, in the Account Head column,
select an accounting head from the adjoining option list.
Accounting Role Description
A brief description of each accounting role that you choose is displayed.
Account Head
If you choose not to associate the product with a class, you have to specify the account heads
for the product, in this field. You can invoke a list of the accounting heads that you have
2-35
maintained from the option list positioned next to this field. Choose a head by double clicking
on it.
Accounting Head Description
A brief description of each accounting head that you choose is displayed.
2.13.1
Capturing User-Defined Fields
You can capture user-defined fields (UDFs) in the ‘User Defined Fields’ screen. Click ‘Fields’
button and invoke the following screen.
Here you can specify the following details:
Field Name
The system displays the UDFs.
Value
Specify the value for each UDF.
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2.13.2
Maintaining a Class for Account Opening Charge
You can create a class to define role to head mapping for levying charges on account
opening. For this, you need to invoke the ‘Role to Head Mapping Class Maintenance’ screen.
Specify the following values.
Class Code
Specify a unique identifier for the class code.
Description
Give a brief description to identify the class code.
Module
Specify ‘DE’ as the module code for the event class.
Module Description
The system displays the description as ‘Data Entry’ on specifying ‘DE’ as the module.
Role To Head Mapping
Maintain the following details.
Accounting Role
Specify the role available for charge income.
Accounting Head
Specify an accounting head (GL) that should be used for recovering account opening charge.
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3. Function ID Glossary
CSDCUCCL .............................2-25
CSDRHCLM .............................2-35
C
CFDACFCL ................................ 2-9
CFDADFEE .............................. 2-22
CFDCHGCE ............................. 2-11
CFDINCLS ................................. 2-2
CFDINTCE ..................................2-6
CFDOCHCL ............................. 2-16
CSDACTCL .............................. 2-29
CSDCBRCL ............................. 2-23
D
DADACRCL ..............................2-27
T
TADTAXCL ...............................2-18
3-1
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