t24.Loans and Deposits

Jethro Ltd LD LOANS AND DEPOSITS Knowledge Impact Center

www.jethroltd.com

Overview Of Module

• The Loans & Deposit module is used for:  - Commercial clients  - Retail clients • The system can handle complicated repayment schedules and multiple interest payments.

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Overview Of Module

• Fully integrated with Credit Risk (Limits) • Standard Settlement Instructions automatically default in (AGENCY) • Advices automatically sent through Delivery Module • This a Contract application and will use CUSTOMER and ACCOUNT records established. 3

Vocabulary

• Discounted • Loan or Contract • Drawdown Account • Liquidation Account • Call/Notice (No fixed Maturity Period) • Liquidation Mode

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The Basic Product 5

Basic Products

• Deposits • Loans • Loan Commitments • Sundry Deposits (zero Interest Deposit) • Sundry Loans (zero Interest Deposit)

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Basic Product Features

• Contracts can be in any currency • Credit Line may be in a currency different from the contract currency • Interest rate can be fixed or floating • Interest bearing and discounted • Fixed maturity or Call/Notice 7

Basic Product - Term (Tenor) 

FIXED:  Maturity

date is a specific date  It can be entered as a number of days (D), weeks (W) or months (M) from the value date. 

CALL/NOTICE:  Maturity date is a number in the Range 0 to 999 0 = Call  1 to 999 = Number of Days Notice. 8

Basic Product - Amendments • Can only be made to Current contracts Changes to: Principal Interest Rate Spread Commission amounts • Actioned via Fields 127 - 136 9

Basic Product - Linked to Limits

• Deposits - No Limit is required. - Updates the overall net position for Customer • Loans - Limit is updated at validation. - If a loan limit is established on a revolving basis the limit will be reinstated as principal repayments are received. 10

Loans and Deposits – Related Files.

INTEREST.BASIS Defaults from CURRENCY record, e.g. A - 360/360 B - 366/360 E - 366/365 F - 360/365 S - Special Conditions In this case the amount of interest is entered in TOTAL.INTEREST.AMT BASIC.RATE.TEXT BASIC.INTEREST & PERIODIC.INTEREST 11

Interest Types

• Fixed • Floating • Periodic Automatic • Periodic Manual • Periodic Straight

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Fixed Interest Rate • Interest rate fixed for life of contract. • Fixed rate valid for discounted loans. • Revision of schedules may be defined. • Mandatory for Commitments. • Amended using NEW.INT.RATE field.

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Floating Interest Rate • Interest rate linked to valid key from BASIC.RATE.TEXT and interest rate from BASIC.INTEREST • Input spread • When rate changes contracts recalculated automatically • Not valid for Discounted contracts

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Tables

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Tables

• CATEGORY Product range = 21001 - 21099 21001 - 21049

Deposit

21045 - 21049

Sundry Deposit

21050 - 21074

Loan

21090 - 21094

Sundry Receivable

21095 - 21099

Commitment 16

Parameter Tables • PROFIT AND LOSS – User defines these parameters in files – BASIC.RATE.TEXT and interest rate from Kabarore EBU

Basic Rate Text SEE

KEY............... 1 -----------------------------------------------------------------------------1. 1 GB DESCRIPTION. CBL PENALITY 1. 2 FR DESCRIPTION. Pénalité Pt CBL 11 CURR.NO........... 3

– BASIC.INTEREST Kabarore EBU

Basic Interest SEE

KEY............... 1 RWF 02 DEC 2013 CBL PENALITY Rwanda Franc -----------------------------------------------------------------------------1 INTEREST.RATE..... 60.00 4 CURR.NO........... 1 5. 1 INPUTTER....... 49796_SYSTEM02 6. 1 DATE.TIME...... 14 DEC 13 13:01 7 AUTHORISER........ 49796_SYSTEM02 8 CO.CODE........... RW-001-0001 GLOBAL MODEL BUILD 9 DEPT.CODE......... 1 Implementation

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Parameter Tables • LMM.INSTALL.CONDS • Defines data/cycle on which interest should be accrued • LMM.CHARGE.CONDITIONS • Defines the charging conditions.

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Parameter Tables (cont)

• LD.TXN.TYPE.CONDITION •

To define sets of rules governing specific LD CATEGORY codes, like minimum / maximum values for:– Term of contract – Draw down Amount – Default interest rates etc

• The input of a contract is validated against the values and overrides are generated if exceeded. 19

Special Features

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Special Features

• Flexible repayment schedules • Principal increases/decreases, including partial or early redemptions • Deposit Rollovers

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Functionality Comparison

MM

LD



Call; Notice; Fixed Maturity

Yes

Yes



Manual Rollover

Yes

Yes



Auto-Rollover

Yes

No



Interest Schedules

Frequency

Yes



Principal Schedules

No

Yes

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Question

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THANK YOU

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