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AALendingAdvancedPart4 PDF
AALendingAdvancedPart4 PDF
AALendingAdvancedPart4 PDF
This Property Class allows to capture bills, balances and adjust balances of bills taken
over from contracts.
Allowed values in Bill Type are PAYMENT, EXPECTED, ACT.CHARGE, PR.CHARGE, INFO ,
EXPECTED, DEF.CHARGE
The BALANCE.MAINTENANCE property class supports the following Types:
DATED,NON.TRACKING,CCY,MULTIPLE,ARRANGEMENT
Rules are set for Capturing Bills and Balances, Adjusting Bills and Balances and writing off
Bills and Balances. We will see these in the following slides.
This facility allows to manually capture existing bills in other legacy systems into AA
Module. Bills can be captured through CAPTURE.BILL activity.
Amounts by Properties, bill dates, bill due dates, total amounts, etc. need to be entered.
Once a bill is captured, further processing will be done as per product conditions.
Capture Balance is used to manually capture the unbilled balances (not yet become due)
from legacy systems in to AA.
Interest accrued, charges accrued can be captured before they become due or billed.
Balances captured can be adjusted. They can be increased or decreased or even adjusted
to Zero. It is possible to adjust more balances at a time in a single transaction.
This allows existing bills to be written off. When the bills are written off, the balances are
set to zero and the bills will be set to written off status.
Balances which are not related to Bills can be written of through Write off balance
activity. This allows balances to be written off. When the balances are written off, they
are set to zero and the status will be set to written off status.
This activity adjusts both billed and non billed balances. The bills vis-à-vis the balances
due and the balances not due can be adjusted in a single transaction. They can be
increased, decreased, even written off.
User can initiate activities in every arrangement through Arrangement Overview > New
Activity Tab.
PROPERTY.CLASS Field identifies which Property Class condition allows this periodic
attribute definition.
ACTION Field represents the valid ACTION for the Property Class.
COMPARISON.TYPE Field refers comparison types defined in EB.COMPARISON.TYPE file.
DATA.TYPE -This field represents the Valid Data Type. For example : AMT, PERIOD, R
(Rate), D (Date), A (Alpha), N (Numeric) and DAO (DEPT.ACCT.OFFICER). The attribute to
which the periodic rule is defined should have a data type specified so that the existing
core routines validate the rule content.
RULE.VAL.RTN Field represents a routine which returns the value for the comparison
routine to do the compare from property record. Should be valid entry in EB.API file.
PR.ATTR.CLASS Field identifies the Periodic Attribute Class to which the Periodic Rule
belongs to. Must be a valid AA.PERIODIC.ATTRIBUTE.CLASS Id.
PERIOD.TYPE Field represents rule that needs to be applied on a specific period or life
time of Arrangement. Possible values are:
LIFE – Restriction applies to entire life of Arrangement;
INITIAL – Restriction applies to an initial period only of an arrangement during its life;
REPEATING - Restriction applies for a fixed repeating period during life of an
arrangement (e.g. every 3 month period say April to June);
ROLLING – Restriction applies for a rolling period that ends at date of transaction (e.g.
Maximum repayments in last three months).
PERIOD Field represents exact period to define for the Rule.
If DATE.TYPE is set to Calendar, then this field should be in 'Y'(years) or 'M' (months).
Accepted values are :
nnM or nnY or nnD or nnW (For Example : 01D, 12M )
RULE.START Field represents start date of the period defined. Possible values are:
AGREEMENT – Effective start Date of the Product; ARRANGEMENT– start date of lending
Arrangement;
START – Date of the First disbursement in Arrangement; if not disbursed, then the
arrangement start date will be taken till it is disbursed
ANNIVERSARY - takes the date and month from the field anniversary in ACCOUNT
property class; not valid for Period Type – Life and Initial;
COOLING-OFF - takes the cooling date from Term Amount property as the base date for
calculating the periodic restriction.
(Eg. Cooling period ends on 31st Dec. 2010, periodic restriction is set for
AMOUNT.INCREASE and the period is set to 1 year when RULE.START is set to COOLING-
OFF, then periodic restriction will apply from the end date of cooling period and not
from the date of arrangement.)
Any charges that need to be collected during pre-closure of Loan can be controlled using
COOLING-OFF period.
A sample of a periodic attribute configured for this would be: PERIOD.TYPE>LIFE;
RULE.START>COOLING-OFF
The above definition would charge the customer if any pre-closure is triggered after the
cooling period.
RULE.ERR.MSG Field represents error message that needs to be raised when the rule is
broken. Should be a valid record Id of the file EB.ERROR.
RULE.OVE.MSG Field represents override message that needs to be raised when the rule
is broken. Should be valid record Id of the file OVERRIDE.
AA.PERIODIC.ATTRIBUTE file contains the Period level definition. This file allows the
user to create records which has specific period definition in them.
PERIOD.TYPE field represents the rule that needs to be applied on a specific period or life
time of the contract.
Options are:
LIFE – Restriction applies for the entire life of an arrangement or arrangement life as a
certain product.
INITIAL – Restriction applies for an initial period only of an arrangement during its life
time or the initial period of an arrangement as a certain product.
REPEATING – Restriction applies for a fixed repeating period during either the life of the
arrangement or the life of an arrangement as a certain product. For example the
restriction may be based on a 12 a month calendar period (i.e. Jan to Dec) or a 3 month
period starting on the anniversary of the loan,
ROLLING – Restriction applies for a rolling period that ends at the date of a transaction.
For example the maximum repayment in the last three months.
PERIOD field represents the exact period the user wants to define for the Rule.
Validation Rules :
No input if
1) the PERIOD.TYPE is INITIAL or
2) RULE.START is ANNIVERSARY
Mandatory input otherwise. If DATE.TYPE is set to Calendar, then this field should be in
'Y'(years) or 'M' (months).
CALENDAR - This denotes if the rule is applicable for Calendar period or not. When set to
Calendar, Rule Start will be applied from the calendar start date of the month or year as
specified.
Other set up to support Calendar type are:
1) PERIOD - should be in 'Y', or in 'M'
2) PERIOD.TYPE - should be either INITIAL or REPEATING.
E.g.
Arrangement Start - 20070601
RULE.START - ARRANGEMENT
PERIOD - 12M
PERIOD.TYPE - REPEATING
Then the Start & End dates of the Rule when the Effective Date is 20071001 is
Start Date : 20070601(Actually it should be 20070101 - since arrangement start date
falls later, this date is taken)
End Date : 20071231 (ends on calendar end date)
and when Effective Date is 20080201,
Start Date : 20080101
End Date : 20081231 (ends on calendar end date)
RULE.START - This field represents the base date which is to be taken for computing the
periods.
Mandatory Input field.
• AGREEMENT - takes the current Product's Effective date as the base date.
• ANNIVERSARY - takes the date and month from the field anniversary in the property
corresponding to ACCOUNT property class. This is not a valid input for the
PERIOD.TYPE - LIFE.
• ARRANGEMENT - takes the start date of the Arrangement
• START - takes the first disbursement date as the base date. If not disbursed, then the
arrangement start date will be taken till it is disbursed.
• COOLING.PERIOD - Takes the cooling date as the base date for calculating the
periodic restriction (Eg. If the cooling period ends on 31st Dec. 2010, periodic
restriction is set For AMOUNT.INCREASE and the period is set to 1 year when
RULE.START is set to COOLING.PERIOD, then periodic restriction will apply from the
end date of cooling period and not from the date of arrangement).
RESTRICTION - Provides another layer for restriction to the Rule. By default, the rule is
applicable for the specified period mentioned in RULE.START. Optionally the user could
input this field to restrict the period further by defining a start period & end period
within the period(defined in PERIOD) between which the Rule is applied.
Input must be like nnnT-mmmT, where nnnT & mmmT should be a valid Period Type
with the exception of allowing 0.
E.g: 0D-1D, 0M-1M; 1M-12M;
Arrangement Start - 20070601
RULE.START - ARRANGEMENT
PERIOD - 12M
PERIOD.TYPE - REPEATING
RESTRICTION.PERIOD- 0M-1M
DATE.TYPE - NULL
The rule is applied only for 1M from 01-June every year.
RULE.START.PERIOD - This field represents the start period from when the rule is
applicable. The actual start date is calculated based on RULE.START definition.
RULE.END .PERIOD- This field represents the end period until when the rule is applicable
Set a Periodic Attribute for tolerance of decrease in Interest Rate during any 1 year
period. Rule to be applied from effective of arrangement.
In this workshop, we are going to create a Periodic attribute with the following Settings:
Set a Periodic Attribute for tolerance of decrease in Interest Rate during any 1 year
period.
Rule to be applied from effective of arrangement.
• AMOUNT DECREASE TOLERANCE - the rule specifies the percentage decrease allowed
over time rather than a specific amount. The percentage decrease is calculated as the
percentage of the value at the start of the restriction period. The rule is validated
when a DECREASE activity takes place.
The PR.VALUE value must specify the maximum decrease PERCENTAGE.
• For example a rule specifies that a 5% decrease is allowed over a 6 month period.
Available balance 6 months ago 10,000
Allowed decrease in the 6 month period is 5% of 10,000 = 500
If the new AMOUNT value in the property is less than 9,500 the rule will be broken.
• AMOUNT INCREASE - restrict the maximum amount that the committed principal can
be increased by over a specified period of time. The rule is validated when an
INCREASE activity takes place on the TERM.AMOUNT property. Amounts are
compared from the AMOUNT field in the TERM.AMOUNT property.
The PR.VALUE value must specify the maximum increase AMOUNT.
• For example a rule could be specified that specifies a maximum increase in principal
of 1,000 is allowed over a 6 month period.
Committed amount 6 months ago 20,000
Allowed decrease in 6 month period is 1,000
If the new AMOUNT is more than 21,000 the rule will be broken
• AMOUNT INCREASE TOLERANCE - rule specifies the percentage increase allowed over
time rather than a specific amount. The percentage increase is calculated as the
percentage of the value at the start of the restriction period. The rule is validated
when an INCREASE activity takes place.
• For example a rule specifies that a 5% increase is allowed over a 6 month period.
The PR.VALUE value must specify the maximum increase PERCENTAGE.
Available balance 6 months ago 10,000
Allowed increase in the 6 month period is 5% of 10,000 = 500
If the new AMOUNT value in the property is more than 10,500 the rule will be broken.
Set a periodic attribute for decreasing commitment amount during the first year of
arrangement, starting from arrangement date and
Set a periodic attribute for full disbursement for life of the product, starting from
product effective date
It is possible to restrict an Activity in full, wherein the Activity cannot be run altogether.
Prevent an Activity from occurring by restricting the activity – LENDING-
CHANGE.PRIMARY-CUSTOMER, LENDING-CHANGE.PRODUCT-ARRANGEMENT. The
activity being restricted must be a valid activity under AA.ACTIVITY. The restriction could
pertain to e.g. Not to allow change of Customer, not to permit change of Product, not to
allow change in Interest rate, not to permit repayment/Prepayment in loan account
below the prescribed minimum amount, not to allow prepayments beyond a maximum
transaction amount etc. Partial or conditional restriction is also based on Activities. The
activity is permitted, with an Override or additionally, with a charge.
The partial restriction could mean e.g. Allow Disbursement in loan Account, but only in
multiples of 100, Allow more than 12 repayments in loan Account in a period. This is
achieved by linking periodic rules to the ACTIVITY.RESTRICITON Product Conditions.
Activity restrictions can be defined based upon the activity itself (number or count of
activities or amount of the activity) or based on the balances that are affected by this
activity (minimum balance requirements).
Balance Rules – when activity restriction rules are based on balance types, whenever an
activity is triggered, it can be specified to check a balance and further assign a charge if
the rule is broken. E.g. Minimum balance requirements in an Account etc.,
Transaction Rules can be of two types. Transaction amount based and Transaction count
based.
When the activity rules are based on transaction amount, whenever the activity occurs,
the transaction amount rules are checked. A charge can be assigned if the rule is broken.
E.g. Transaction amount must be in multiples of 500, Prescribe Minimum transaction
amount for Prepayment of loan Account etc. When the activity restriction rules are
based on transaction count, and the activity is triggered, the transaction count rules are
checked. A charge can be assigned if the rule is broken. E.g. Repayments in loan Account
cannot exceed 12 in a year, 2 Prepayments in loan account is generally permitted, any
extra Prepayments would attract a charge.
The property activity restriction has three sets of fields to define restrictions based on
the Activity itself or on the balance types that the activity affects.
a) Rule based fields b) Activity based fields c) Property based fields. The rule based
restrictions could be imposed at the time of the activity being triggered or at the time
when a property like interest or charge defined in the payment schedule is processed or
during close of business.
Rule based fields– rules created to impose restrictions on activities. It is possible to
create as many rules as desired in an arrangement in the same record. Next, Activities
are attached to these rules which are defined in activity based fields.
Activity based fields – activity that needs to be restricted is defined here. The rule
created earlier in the rule based field is attached to the activity. An override as desired is
also defined here.
Property based fields - Properties like interest and charge that are set to be processed in
a defined frequency (as defined in payment schedule) can be restricted and regulated
based on the defined rules. The rule created earlier in the rule based field is attached to
the property. An override as desired is also defined here.
RULE.NAME : When a rule is created, a name is given to the rule for later use. A
meaningful name can be given.
As desired, any number of rules can be multi-valued.
PERIODIC.ATTRIBUTE: This field should contain a valid record from
AA.PERIODIC.ATTRIBUTE. Periodic attributes are explained
ACTIVITY.CLASS / ACTIVITY : The activity class or the activity on which the restriction is to
be imposed. Any valid AA.ACTIVITY may be stated here.
BALANCE: The balance type on which the rule should apply.
VALUE: The amount of the balance type for which the rule is defined.
ACTIVITY.CLASS / ACTIVITY - The activity class or the activity on which the restriction is to
be imposed. Any valid AA.ACTIVITY may be stated here.
RUN.THE.RULE – The rule created in the earlier rules tab is attached to the Activity by
input of rule in this field.
BREAK.RESULT – Options can be Error / Override. Depending on complete or partial
restriction, the appropriate option is to be chosen.
ERROR - The transaction triggering this activity would be completely blocked. If
transaction is completely blocked, it is mandatory to choose an error message displaying
restriction. Should be a valid entry in EB.ERROR table.
OVERRIDE - The transaction triggering this activity would be allowed after displaying a
warning. If the transaction is to be allowed after displaying a warning, it is mandatory to
state an override message. Should be a valid entry in OVERRIDE table.
CHARGE.PROPERTY - This field denotes the charge property which will calculate charge
amount when a rule is broken. Only charge property can be input in this attribute.
PR.APP.PERIOD – The application period for the given periodic rule charges is input here.
If the value defined is zero, then the charges are applied immediately.
PR.APP.METHOD - field denotes the application method that needs to be applied to the
rule break charges. Allowed values are
Due - Rule break charges are made due
Capitalise - Rule break charges are capitalised
Defer - Rule break charges are calculated but not applied immediately. Charge are
deferred and are collected over a period of time. Collection of these deferred charges is
driven by payment schedule and Periodic charges property classes
EVALUATION: When an activity restriction rule is broken, there are 2 options available.
Breaking the rule or Satisfying the rule. E.g. Penalty interest can be used for breaking the
rule and Bonus interest (a better rate of Interest) can be used for satisfying the rule.
EVALUATION.RESULT: This has two options.
a) To waive the Interest or Periodic Charge Property amount
b) To apply the actual Interest / charge amount
ALTERNATE.PROPERTY: When the evaluation result options is ‘waive’ an alternate
property can be chosen for Interest / charge.
TRANSACTION AMOUNT MAXIMUM - restrict the maximum AMOUNT allowed for the
Activity for any single activity. The amount of the activity is assumed as the
TXN.AMOUNT in the AA.ARRANGEMENT.ACTIVITY record for the current activity
being processed. The PR.VALUE must specify the maximum AMOUNT allowed
TRANSACTION AMOUNT MINIMUM – restrict the minimum AMOUNT allowed for the
Activity for any single activity. The amount of the activity is assumed as the
TXN.AMOUNT in the AA.ARRANGEMENT.ACTIVITY record for the current activity
being processed. The PR.VALUE must specify the minimum AMOUNT allowed.
TRANSACTION COUNT TOTAL - restrict the number of activity over a specified period.
The Maximum number of transactions allowed in a period is defined in the associated
PR.VALUE. Processing will determine the current count of activities of the current type
requested in the processing period and will validate that an additional activity is
within the allowed number. PR.VALUE must specify the maximum NUMBER of
Activities allowed within a period.
An example for Activity restriction with Periodic attribute (Time element) is shown here.
Step 1: Since it is an Activity Restriction , choose a periodic attribute which will suit
this requirement
Step 2: Since this is somewhat related to the frequencies, the ideal periodic
attribute will be Transaction Count Total
Step 3: Create a Periodic Attribute under that Periodic Attribute class with a
PERIOD.TYPE – INITIAL , PERIOD – 1Y,
RULE.START – ARRANGEMENT
Specify the activity that needs to be restricted and indicate whether an error or override
message to be displayed if the rule is broken and optionally a charge property can be
attached which will be triggered if the rule is broken.
Attach the Product condition created for activity restriction in the product designer and
proof and publish it. Since we have attached a rule break charge property
“PRINDECREASEFEE” whenever the rule is broken, attach a valid product condition for
that charge property.
Now create a new arrangement for your customer for the product created earlier.
Set a Periodic Attribute under Activity Restriction Property Class for restricting the
Disbursement Amount in Multiples of USD 1000.
Set a Periodic Attribute under Activity Restriction Property Class for restricting the
Disbursement in Multiples of USD 1000
In the periodic attribute set the following:
Rule to be applied for Life of the arrangement
With effect from start date of arrangement
Create a new Product Condition for ACTIVITY.RESTRICTION with the following Settings:
Set the rule to restrict Disbursement in Multiples of USD1000
(LENDING-DISBURSE-COMMITMENT)
Attach the periodic attribute created in the Previous workshop
(ACTIVITY.RESTRICTION-Periodic Attribute)
If user attempts to break the rule Error message to be displayed,
All Attributes are not negotiable by default.
In this workshop, we will see how to create an Activity Restriction Product condition.
Set the following Conditions:
Set the rule to restrict Disbursement in Multiples of USD1000
(LENDING-DISBURSE-COMMITMENT)
Attach the periodic attribute created in the Previous workshop
(ACTIVITY.RESTRICTION-Periodic Attribute)
If user attempts to break the rule Error message to be displayed,
All Attributes are not negotiable by default.
You have learnt earlier that a Property Class is a fundamental building block of AA and
that a Product Line is a combination of Property Classes. Property Classes and Product
Lines are released by Temenos and you can only amend their Description.
The Product Line provides a high level definition of the business components (Property
Classes) that may be required to construct a product belonging to that line. For example
the LENDING Product Line will enable users to design and service term loan products
such as Loans (personal, small business, etc.) Mortgages Lines of Credit.
The Product Lines are defined by Temenos and cannot be created by the User. A Product
Line is described by the Property Classes which constitute it. The financial institution
may then use these “building blocks” of functionality to construct the individual
products which are available for sale to its customers.
LINE.ATTRIBUTE: This optional field is used to specify whether the product line deals
with amounts/currencies and Reverse and Replay functions are allowed. This field for
lending product line contains a value CCY and REPLAY. Values possible are CCY, REPLAY
and NULL.
MANDATORY field identifies whether inclusion of a Property a Class in the associated
multi value field PROPERTY.CLASS is mandatory when creating a new product in
AA.PRODUCT.GROUP and subsequently, AA.PRODUCT.DESIGNER.
We will look into how you can design a AA Product beginning with Product Group.
Please recollect that the Product Group is in the second level of Product organisation.
Product Line in the first level can be defined only by Temenos. Users can create their
own Product Group under existing Product Lines. Each Product Group has a number of
Properties associated with it and specified as Mandatory or not. Each Product Group
must have one Mandatory Property for each of the mandatory Property Classes of its
Product Line. All Products belong to a Product Group.
In this workshop, we will create a Product group created by using the existing properties
attached to the Property Class with properties marked as Mandatory or optional.
EFFECTIVE Field represents the effective period after which the new property condition
comes into effect. In addition to dated changes of a single Defined Property, the Product
designer also allows a Product to be defined with “timed” changes of its conditions.
These timed changes may be defined as “condition changes” (i.e. a standard product
property is linked to one Defined Property and after a period of time switches to a
different Defined Property.
CURRENCY field indicates the currency(ies) that are possible within this product. The
input must be a valid record from the CURRENCY table.
This is a multi value field.
CALC.PROPERTY: Some properties require calculations for them. For example, a Current
Interest property may have to accrue interest at a specific rate on a specified amount.
The base amount on which such calculations should happen is stated here. The field is
associated with SOURCE.TYPE, SOURCE.BALANCE.
The property stated here would be validated in the proofing stage to verify if they
actually belong to this product.
Create New Product available in USD with existing Product conditions or new product
conditions.
Note : For the Properties marked with red one use the existing product conditions given
in the workshops.
Set the Calculation source for PRINCIPAL INTEREST and make the Product Available in
USD
When you proof and publish a product through AA.PRODUCT.MANAGER, you have to
define two dates related to it.
One is the Available Date, which is the date from which the Product is available for sale.
Only from this date, Arrangements for the product can be created. AVAILABLE.DATE Field
is used for this.
Another one is the Expiry Date, from which the Product will cease to exist and no
Arrangements can be input for the Product. However, existing Arrangements for the
Product will continue. EXPIRY.DATE Field is used to mention the expiry date of product.
PRODUCT.ERROR Field in displays the errors caused when Proofing fails.
SUGGESTION Field displays suggestions for rectifications of errors.
In this workshop, we are going to create the arrangement for the product published in
the previous workshop in USD for your Customer
Look at the PAYMENT.SCHEDULE and INTEREST property. Are the values defaulted as per
your Payment Schedule and Interest Product conditions
Look at the Settlement instructions and input the Payin Activity with T24 Account or
Arrangement Account
Commit the Arrangement and accept the overrides
Notice that a charge for New arrangement (NEWARRFEE) is made due
Now select the customer for whom the arrangement was created under the
unauthorised tab and authorise the arrangement created.
Disburse the Loan to your Customers current Account in USD and authorise it.
After authorising the disbursement, view the Status of the Arrangement changed to
Current, Financial Summary and the Activity log.