Functional training

Functional Training

Harshitha S A
Modus Information System
04/01/2023

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https://modus.ad.modus.com:52000/fininfra/ui/SSOLogin.jsp

INDEX
Session No Topics Date Page NO
1 1. Finacle 02/01/23 3
2. Loans
3. EMI ,CIBIL score
4. Credit card
2 1. Deposits 02/01/23 4
2. Standing Instruction
3. Types of account
and loan holder
4. Customer
5. Overdraft
6. Cheque/DD
7. Clearing
3 1. Assets and liabilities 03/01/23 6
2. Maker and checker
3. KYC
4. CIF ID
4 1. User login 04/01/23 8
2. CRM(CIF-Retail
corporate)
3. SSO
4. SVS
5 1. Banking products 05/01/23 10
2. Scheme type
3. Scheme code
6 1. Blacklist,negative list 06/01/23
2. Suspend
3. Lien marking
4. Account opening
5. Account freeze
7 1. Office Accounts 09/01/23
2. Account placeholder
3. Interests
8. 1. Transaction 10/01/23
2. Charges
9. 1. Customer Accounts. 11/01/23
a) CA

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b) ODA
c) CC
10. Demand Draft 12/01/23
11. Clearing 13/01/23
a) Outward clearing
b) Inward clearing
12. Standing Instruction 17/01/2023
13. Loans 18/01/2023
14. Loans 19/01/2023
15 HLADSP 23/01/2023
HRRCDM
16 HNNTM 24/01/2023
17 -- 25/01/2023
18 Deposits 27/01/2023
FD
RD
19 Interest table codes 30/01/2023
Creating a loan account
20 Creation of TD 31/01/2023
accounts.

Session 1
2/01/2023
What is Finacle?
Finacle is the software product developed by Infosys, Platform for global
digital banking service.

In modus, we offer various service in finacle software ,Like

Implementation,version migration ,customization etc.

What is collateral?
Something pledged as security for loan sanction.

What is loan?
A loan is essentially money borrowed with a promise of return within a
specific period. Bank decides Rate of Interest.
If repayment will be done monthly then it is called as EMI(Equated Monthly
Installment),repayment also done all at once also part by part.

What is Holiday period or Moratorium?

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The repayment of loan will start after some period(maybe months or

years),THis period is called holiday period or Moratorium and interest on
principle will applied during this period.

What is EMI?
Equated monthly Installment is a fixed amount paid to the bank for every
month.
EMI includes both Interest and part of principle.

Loans can be restructured, If the part of principle is paid or jobloss for the
loan applicant or any other situation,Loan can be restructure EMI can be
altered, loan tenure can be increased or decreased etc.

Pre-closing of the loan is also allowed in banks with some conditions

depending upon the bank.

CIBIL score:
Checks the credibility of the loan applicant.also plays a critical role in loan
approval.
3 digit score ranging from 300 to 900 lender’s check the ability to repay the
loan before giving the approval.

Credit card.
It is used for online transaction issued by the bank to their customer to
borrow funds to a certain limit and card holder should repay their debt
within specified time if defaulted interest will be high on the amount.

Session 2
1.Deposits:

1. Fixed deposits:

A lump Sum amount kept in the bank for a certain period and get interest
on it.
We can’t withdraw the money before the maturity period,if we withdraw
then returns will be less.

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Maturity period (the period agreed to keep the money in the bank)may be
from 7 days to 10 years.

2. Recurring deposits:

Depositing a fixed sum of money for every month or quarter and earn a
decent amount of interest.
The minimum period of investing may be from 6 months to maximum of
10years.
Rate of interest are higher than Savings account
Withdrawals before maturity will be on certain conditions.

2.Standing Instruction

Instruction by customer to the bank to initiate a transaction regularly for a

specific period of time.

3.Customers
There two types of customer in bank called Retail and corporate.

Retail customer are general public.

Corporate refers to organization or business units.

4.Types of account and loan holder.

 Loan Applicant: A person who makes application for a purpose of
getting a loan has to submit the details of sources of income, credit, or
assets.

 Co-applicant: A person who joins the loan application, To make the loan
application more worth than before and also involves additional
information about co-applicant’s sources of income, credit, or assets.Co-
applicant is more responsible than guarantor.

 Guarantor:A person who makes a promise or guarantee to pay

borrower’s pay in-case of borrower defaults the loan.

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 Account holder:A person with a account in the bank in his/her name.

 Joint holder:A joint account is an account which hold by 2 or more

individuals,they may be families,spouses or business partner.
Joint account holders have equal access to the money and , responsible to
the charges of the Bank.

 Nominee:A person who has been designated in the bank application to

receive the benefits of a account holder in-case of unexpected death.

5.Overdraft

 It is a facility usually given to Current account to take out more money

than what you have in the account.
 Banks may impose additional charges on this overdrawn accounts.
 Overdraft is like another loan,The account holder pays interest on it.
 Overdraft account needs the collateral.
 Avoids cheque bounce.

6.Cheque/DD
Cheque

It is an order bank to pay specified amount in the cheque from the drawer’s
account.
There a chance check bounce.

DD:Demand Draft

A way to initiate a transaction between the banks.

It is much safer than cheque as the amount is already paid.

7.Clearing:
When two banks involve in a transaction clearing is needed.
There are two terminology in clearing.

Inward and outward clearing.

Outward clearing.

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Happens when a bank deposited with different bank cheque/DD,then the

cheque/DD goes out of the bank to respective bank,This is known as
outward Clearing.
In outward Clearing, Account will be credited.

Inward clearing
Here the bank receive a cheque/DD from different Bank to verify and
process.
In inward clearing account will be debited.

Session 3
Assets:
An economic resource owned or controlled by a company and expected to
generate future benefit.

Bank’s assets
 Physical asset:lands,building,furniture etc
 Cash reserve
 Loans,interest on loans
 Investment

Liability:
The state of being legally responsible for something.
Ex:salary to the employee by the company

Bank’s liability
 Customer deposit
 Borrowings from other bank.

Bank Capital
Difference between assets and liabilities,represents net worth of the bank

Networth of the bank=Assets - Liabilities

Balance Sheet
Called a statement of financial position, showing the assets and liabilities.

Transaction ID
Transaction IDs are unique identifiers for each transaction, such as an order
confirmation number.

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Maker and Checker

The principle of maker and checker means that for each transaction, there
must be at least two individuals necessary for its completion.

 Checker function is to approve a transaction.

 Maker function is to create or initiate a transaction.

KYC

KYC, or "Know Your Customer", is a set of processes that allow banks and
other financial institutions to confirm the identity of the Organizations and
individuals they do business with, and ensures those entities are acting
legally.

KYC requirements for banks:

 Passport.
 Voter's Identity Card.
 Aadhaar Letter/Card.
 PAN Card.
 Photo.

CIF ID (Customer Information File)

A Customer Identification File Number is an 11-digit number that helps a

bank identify a customer and their personal details. Every customer has a
unique CIF number, which is also called CIF ID.
 You will find your CIF no. displayed on the first page of your Account
Passbook.
 The CIF number contains important information about the account
holder, including their banking history and account details.
 The CIF number allows the bank to track and manage the account
holder’s information, and helps to reduce the risk of fraud or confusion
when providing banking services.
 Like an Aadhaar card number, the CIF number is unique to each
individual and is different from one user to another. It is important to

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keep this number secure, as it contains sensitive personal and financial

information.

Session 4
User Login screen

CRM(Customer Relationship Management )

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IN CRM CIF ID is created,as we know there are two types customers

1. Retail
2. Corporate
 For retail customer is individual performing banking transaction such as
depositing availing loans,credit card etc.
 In finacle an individual is referred as retail entity
 Information such as Entity profile,address,financial details and other
information captured in CRM
 This is repository for the bank.
 CIF entity-Main account holder-for every customer-CIF ID is maintained
in bank’s-CIF retail module of CRM

SINGLE SIGN ON(SSO):

 Single sign on framework enables the application user's multiple
application.
All Login related validations happens in SSO.
 SSO Framework used by Finale core and CMR application for
Authentication into the system.
 SSO Framework enable Application user of Finacle suite of Product to
login Once get authenticated to each application for which the user the
valid user id and access the permissions.

SVS (Signature Verification systems):

 Signature Verification form of identity verification.
 It works by determining the whether a person's signature is genuine
according to past iterations.

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Session 5
1. Bank Products

Various services offered by a bank to its customers

From current and savings account to all type of loans.

Example: term deposit, Car loans

2. Scheme type:
This is a group based on the type,nature and behaviour of the account.
The rules applicable for each group of accounts can be defined at this level
and any account opened under this scheme type will be applied with all the
rules defined.

3. Scheme code:
This is one set of rules defined by the bank on the scheme type for
particular behaviour of the group of accounts.
Example:SBA(savings bank account),overdraft account(ODA)

For each scheme type,the bank can define any number of scheme codes as
per the bank requirements.

Scheme Type Menu(Finacle)

SBA(savings bank account) HGSPM
ODA(overdraft account) HGSPM
CAA(Current account) HGSPM
TDA(Term deposit account) HTDHGSPM
LAA(Loan account) HLAGSPM
CLA(commercial loan account) HCLGSPM

GSPM:General Scheme parameters Maintenance.

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Session 6

De dup check set Up:

 De dup check set Up is required for checking the duplicate CIF entities in
the Systems.
 These check is generally Made to ensure the duplicate CIF records are
not created for same individual in the database.
 The de dup check can be part of the approval Process of standalone
Process.
 It is possible to set up distinct duplication check setup for retails and
cooperative CIF entities.

Blacklist and suspend of the customers.

 Bank prefers blacklist check before authorizing a customer as valid

customer.
 These lists are made available through various sources which could be
credit rating agency or RBI.
 IN CRM A separate blacklist entity or customer database exits.

Negating,

Negation check before authorizing a customer as valid customer,

It refers to check internal defaulters list of CIF entity whose credibility are at
stake.

Suspend
Suspension refers to the process where a customer is disabled from opening
a new accounts.

Account freeze

An action taken by bank that prevents transaction.

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Debit freeze-Account holder cannot withdraw the cash

Credit Freeze-Account holder cannot deposit the cash.
Total freeze-Account holder cannot withdraw or deposit amount that the
account.
Menu: HAFSM

Life cycle of Saving account

Between Open and closing the account there be multiple account.

 Opening the account

 Modification
 Verification
 Transaction
 Activating/deactivating some special privileges
 Closing the account

Account pegged means account is not effected by interest changes by RBI,it

yes not effected, if no means affected on interest rates.

Lien marking-Withholding the money,only lifted if the reason is valid.

Menus
Action Menu
Account open HOAACSB
Account verification HOAACVSB
Account modification before verification HOAACMSB
Account modification after verification HACM
Issuing check book HICHB
HICHBA
Account balance Inquiry HACCBALI
Freezing the account HAFSM

Session 7
1. Office Accounts.

What are office accounts?

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Bank maintains various accounts internally for several purpose.These are

called Bank Accounts or Office Accounts.

 Office account is opened without CIFID or without involving a customer.

 All operations on the account is initiated and done by Bank.
 Features like Chequebook, charge calculation, min balance
check,interest calculation are not applicable.
 Various office accounts are interest collected ,Interest paid commission
expense accounts etc.
 Office accounts are created using HACMDB

Batch Job: A activity which is repeated regularly by the bank.

Menu: HBJSTM
Example:Crediting interest,SMS charges.

2. Account placeholder

 A system to pick appropriate office account for posting certain

transaction based on SOL and currency.

 Office account number should be unique across SOL s,These accounts

may exist in multiple currency.

 Placeholder is created through HAPHM,placeholder is connected to

office accounts.

 By specifying placeholder the system identifies office account of

particular SOL and currency associated with.

 Only one account is associated with one combination of Sol and

currency.

3. Interests

Interest earning is the primary source of income for banks.

Bank Should be able to access their interest liability and interest asset at
anytime and reflect them in profit and loss projection.

Accrual,booking and application,amortization are the tools that assists bank

to meet the objective.

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ACCRUAL

Process by which the system will arrive at interest amount either payable or
receivable as on any date.

Only calculating the interest.

This process generates only a report and no financial transactions are

created.

Also used for arriving at the interest amount payable from/to the customer.

BOOKING

The process where the system creates a transaction of the amount

calculated on the given date for interest receivable/payable account
depending upon debit/credit interest calculation
APPLICATION

In application level interest is credited to customer account from one of the

office account and also in loan scenario while customer pays amount and
that is credited to one of the office account.

AMORTIZATION.

Adjusting principle over the life time of the loan,Initial EMI consists large
part will be Interest and by end loan tenure Interest amount will be less.

Transaction:
Session: 08

Transaction is an event that account on an account.

I could b a financial Transaction or non financial transaction.
A financial transaction is either creating or debiting an account for a given a
amount.

A Non Financial Transaction means any transaction made by the Customer

with the Bank which does not cause movement of funds or affect the

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balance in the Accounts, whether initiated manually, automatically,

electronically or remotely transmitted to the Bank via channels made
available by the Bank or transmitted via Internet Banking services relating to
the Account and/or other business activities with the Bank.

Note:Once the modification is done by a person,the core Banking Solution

overwrite the information of the first person who has created the
transaction.
This is for the simple reason that person who as modifying the transaction
might be doing with the wrong intention.
The Core Banking Solution does not keep track of person who has deletes
the transaction also. Only the status of the transaction is updated to
deleted.

Online Transaction
A transaction which is initiated for an account with the intention to update
the account balance immediately.

This is done invoking menu option meant for carrying out transaction.

HCASHDEP:Deposit of Cash .
HCASHWD:Withdraw of Cash.
HTM:Initiating transfer transaction.

HCASHDEP:Deposit of Cash .
By Using this Menu Only Deposit the Money.
We can’t Withdraw the Money.

HCASHWD :Withdraw the Money

By Using this Menu Only Withdraw the Money.
We can’t Credit the Money.

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HTM (Transaction Maintenance)

By Using this Menu, Transfer the Money One Account to another Account.
We have to select debit option to the account from which Money should be
debited and credit option to the account which should be credited.

1. Add addition of a new Transaction Tran id entry is not required in this

mode.For all other function entry of Tran _id mandatory.

D-Delete,Deletion of transaction This has to be used if the transaction are in

entered status and entire set of transaction are to be deleted.

If any of the Part transactions are already in posted/verified status this

function cannot be used.

1. Inquire,inquiry into the transaction.

1. Modify-Modification of transaction -posting of a transaction has to be

initiated through this function where the transaction are in entered
status.

1. Posting of a transaction, and the account balances are updated.

E-Verify Verification of transaction If one user has entered and posted the
transaction, the same needs to be verified by other person.

C-Copy Tran Id copy of an existing transaction created if transaction are to

be copied the Tran_id will be entered.

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1. Copy Template id copy of an template already created user wants to

copy a template already created,he will the template_id .

By Clicking the GO button in the above screen the following screen

will be populated:

Account Id:The number of the account you wish to debit or

credit.

Transaction Menu:

HCASHDEP Cash Deposit

HCASHWD Cash Withdrawal

HTM Transaction maintenance

HXFER Transfer Transaction

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HMOPM Menu Option Maintenance

HLACLI Account Ledger Inquiry

HPBP Pass book Printing

HPSP Pass Sheet print

Types of Transaction:

Transaction posted to an account can be of the following types:

1. Cash
2. Clearing
3. Transfer

Charges:

a) Bank Collect various type of charges for the service ti it’s customers.
b) The service for which charges need to be collected should be known and
also the method of charge collection like fixed amount percentage
%based charges has to be know.
c) The charges calculation is based on happening of an event.
d) User can define charge structure(event id) for different events(event
type).
e) Charges collected can be

 Fixed amount
 Percentage based
 Based on amount slab
 Mrt based
 Script based

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The charge amount can be debited or credited

Event type:

An event in banks are account opening,closing,passbook issue cheque book

issue etc.The process for which charge calculation is enabled and calculated.

Event ID

The charge set up for various processes,An event ID is the one in which the
actual amount and type of charge calculation is defined.

Every event type can have one or more event ids associated with it.The
charge specified in the event ids may differ.

Ex.ACCLS- Account claosur->event type.

Different event id can be defined under this

ACCLSCC->event id closing the CC accounts.

ACCLSSSB->event id for closing the savings account.

Even though multiple event id’s for event type,it is not possible to use all
event id’s

The event ids are mapped In the scheme code level.

Transaction particulars/Remarks can be captured at the HPTTP set up for

part transactions.

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Session 9

Customer Accounts

There are different types of customer accounts.

a) Savings
b) Current
c) Cash
d) Overdraft

In finacle, before an account is opened for a customer the account

holder must have a CIF ID.

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All the general information related to the customer is captured as

the part of CIF ID creation.

From one CIF ID we can create multiple accounts and information

captured during CIFID creation is populated during account
creation,thus reduces the repetitive entry of the information.

Some of the Features of Customer account.

 Account opening,maintenance and closure can be across
Servlet outlets.
 Accounts can be opened in any currency.
 Interest debit and credit ca be specified.
 Accounts can be marked inactive,dormant also freezing and
reason for freezing can be specified.
 Signatures can be captured and linked to customer account.
 Interest accrual, booking ad payment collection based on local
and English calender.
 Nomination facility is available for customer accounts.
 ATM facility is available.
 Lien marking allowed.
 Creating a Standing instruction is allowed.
 Many more

Finacle menus for creating and verifying and modifying the

accounts.

Operation Menu
Savings Current Cash Credit Overdraft
account account
Account HOAACSB HOAACCA HOAACCC HOAACOD
open
Account HOAACVSB HOAACVCA HOAACVCC HOAACVOD
verification
Account HOAACMSB HOAACMCA HOAACMCC HOAACMOD
modification

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before
verification
Account HACM HACM HACM HACM
modification
after
verification

Overdraft account:

 Overdraft account is like another loan account

 Commonly used by Business people.
 Fund utilizing in here is short term
 Functionality will be similar to Credit card and but OD accounts
needs Collateral.
 Based on collateral Sanction limit will be changed.
 We need to link the collateral ID with OD account.(menu
HSCLM)

Limit node:

Mutiple collaterals are linked to single.

Session 10

Demand Draft

 Demand draft also known as DD is a type of prepaid negotiable

instrument.
 Drawee bank usually become guarantor to make the payment
when this instrument is presented.
 DD are basically used to make payment to anyone anywhere.
 It is not mandatory to have account to issue DD but mandatory
to have account of beneficiary.

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 During deposit,
When a draft issued, Draft account(Office account) will be
credited and details of draft issued registered.
 During payment,
After the draft paid entered in draft paid register,amount will
be debited from Draft account and credited in a customer account.

 Re validation of DD
A draft is issued for Specific period from the date of issue,if
the DD is not used on time and purchaser wants to extend the
date.It has to re-validated by the issuing branch on the request of
the purchaser.

 Cancellation of DD
If the issuer doesn’t want to utilize the DD,he can cancel the
same by surrendering the Original DD to the issuing branch.

 Issue of Duplication of DD
If the draft is lost by purchaser the drawee bank is advised to
exercise caution in case the draft is presented for payment.
After receipt of non payment advise a duplicated draft will issued
against indemnity executed by the purchaser.

Finacle menus.

Menu Operation
HDDMI To issue DD fr Customer
HDDPRNT To print DD(Single)
HDDPALL Bulk DD print(ALL unprinted DD will print At
once)
HDDD To Duplicate the DD
HDDSM Status Maintenance(Revalidation of DD)
HDDMP DD payment(Make Payment)
HDDGSMP Scheme code of DD is defined
DDA Scheme type

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Issuing the DD-menu-HDDMI

HDDMI- Demand Draft Mass Issue

Function: add,delete,modify,inquire,post,print,copy from
template.
 Transaction ID:
 Issue date:
 Value date:
 Print Indicator:
 Demand Draft A/C ID:
Purchase details:
 Transaction type:cash,Transfer-Bank/Customer induced.
 Purchaser name or ID
 City
 Country
 Cheque details etc..

Fee details.
 Transaction type:cash,bank/customer induced.
 Commission a/c ID
 Currency
 If cheque(Cheque details)

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Menu
HDDPALL

HDDGSMP

Function:Inquire

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Session 11
Clearing

1. What is clearing?
It is a process where by different banks exchange the
instruments drawn on them and received by different banks by
collecting to crediting or debiting the money or claims to customer
account.

2. Clearing house
A place where representative of Banks meet at specific
times to exchange instruments and workout the net balance
against each other.

3. Drawee Bank
The bank on whom instrument is drawn.

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4. Beneficiary
The person to whom the cash of the instrument need to be
credited.

5. What is instrument?
An instrument is referred as negotiable instruments like
cheque/DD,dividend etc.

6. What is carving?
To lien the amount in the customer account when the
process of clearing the instruments is started in inward clearing, In
order to avoid insufficient balance during the clearing process.

7. Outward Clearing
The process where instruments are sent for collection to the
drawee bank/branches.

8. Outward reject
Any instrument that is sent for collection as a part of clearing
and returned unpaid.

9. Outward Clearing steps.

Opening the ZONE
Adding the instruments(Link the account to DD)
Suspend the Zone(No further instruments are added)
Release to Shadow balance(Amount is credited to customer
account but cannot be used,And File send to Other banks)
After receiving confirmation from other bank, If there is No
problem in the cheque the amount credited will be effective to use
Failure of the cheque Shadow bal will be zero.Thus comprises
Regularize the shadow balance

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Close the zone.

10. What is Zone?
Particular time slot where the instruments are added to get
cleared.

11. What is Shadow balance?

The Bank credit the customer’s account but may not allow
withdrawal of the cash by the customer.
The amount though credited to the account will be reflected
separately as funds in clearing,Thus representing the amount
which has come from clearing module but not yet available for
withdrawal.

12. Release to Shadow Balance

When the bank is sure that the clearing house will meet for
the zone,a process will be initiated for crediting the accounts of
the customers or intermediary account.This process is called
“Release to Shadow Balance”

13. Regularization
When the bank satisfied/gets confirmation that there are no
return of instruments presented by it, a process initiated where in
the amount that has released to ”Shadow Balance” will be moved
to clear balance and made available to customer for withdrawal
without any restrictions.
This is referred as regularization.

14. Inward clearing.

The process where instruments are received by the Drawee
branch for payment/debit to customer account.

15. Inward reject.

Any instrument which is received as a part of inward clearing
and returned to the presenter bank on account of non-payment
for any reason.

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16. Inward Clearing Steps

Open ZONE
Adding the instruments(Carving the customer account)
Suspend Zone(No further instruments are added)
Validation Run(response send to other bank)

Posting the zone(Debit all the customers account

and credit to office accounts)(Response to other bank)
Close the zone

17. Validation
This is a process that run before initiating the posting process
of a zone.This process will generate report that lists out all the
probable errors/exceptions that the system is likely to encounter if
posting is initiated.
Ex:Insufficient balance,Stopped cheque,account freeze.

Based on the information in the report,the user has to take

necessary steps either to pass or reject the instrument.

18. Finacle menus.

Operation Outward Clearing(Menu)

Creating Zone HCLZCM
Open the zone HMLZOH
Suspend
Release to shadow
Close zone
Add instrument HOCTM

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Operation Inward Clearing(Menu)

Creating Zone HICZCM
Open the zone HMICZ
Suspend
Validation Run
Post Zone
Close zone
Add instrument HICTM

Session 12

Standing Instruction

 To initiate a transaction regularly on a specific day for specific

period.
 Its a repetitive activity
 HSIM where the set up for Standing instruction is done
 HSIE where the action(executing the transaction is done)

Session 13

What are loans?

A loan is money borrowed with of return promise within a
specific period of time.

Different types of loans

 Home loan
 Gold loans
 Loan against property
 Personnel loans
 Education loan
 Automobile loan

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Etc

Interest rate
Fixed rate:Interest rate remains same throughout the loan.hence
EMIS Also remains same.
Floating rate:Interest rate will be calculated on a base within a
floating rate.EMI will be varying through out the loan tenure.

Two types of loans in Finacle.

Retail loans and commercial loans.

Retails loans: Loans For individual

Commercial Loan:For corporate.

What is EMI?
The Amount paid as installment for loan taken.
EMI stands for Equated monthly Installment.
Combination of Principle and Interest.

EMI Loans and Non EMI loans.

EMI loans where the loan is repaid in monthly installment.

Non-Emi loans- where the loans are repaid in bulk-amount at once
or 2 or 3 times.
In Non-EMI First payment is adjusted for the interest part and
then for the principle.

Asset Classification.
Loans are assets of banks.
Assets are classified based on risk category
Repayment/collection of loan involves risk factor,based on this risk
assets are classified,This is known as Asset classification.

The loan repaid properly then that is low risk category,

Loans which are not paid for smaller period medium risk category.

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Loan which are not paid for longer period of time is high risk
category.

Due date:
Date on which loan installment must be paid.

Over due amount

The amount not paid on the due date is considered as over due
amount.

DPD:days passed Due.

Number of days passed after the due date in case of non payment
of EMI.

Over Due amount

The amount not paid on the due date and from next day it is
considered as overdue amount.

NPA:
The assets which are not paid over along period of time,NPA
are one which will not generate income to the bank.
RBI usually suggests loans are not paid 90 or 180 days is
considered as NPA.

Restructuring of loan.
Modification to the exiting loan terms.To make easier for the
borrower to mange the repayment of the loan principle and
interest.

When EMI is increased the tenure will decrease

And when EMI decreased the tenure will increase.

Asset provisioning.
Bank will keep certain percentage of outstanding in loan accounts
wherever they feel difficulty in recovering.

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This amount kept from it’s income is known as provision amount

for bad and doubtful debts The provision is vary from from any %
to 100%.

Writing off:
The accounts which have been classified as worst assets,100%
percent provision is done.If is there is no chance of recovering the
amount at all, written off from the book of accounts,The process
of making adjustment from the provision amount is known as
Charge/Written off.

Session14
Loans

Disbursement:
 Represents loan amount released to the account holder based on the
sanction limit.
 Normally disbursement flows will happen while opening loan
account.
 There can be a single or multiple disbursement in a loan account.
 In case of multiple of multiple flows disbursement will happen sub
sequence to account opening.

Example :

House construction

 If the house construction completed the loan amount will get at once
(all amount at a time) or single disburse.
 If the house construction not yet completed the loan amount will get
multiple time(Multiple disburse).

Demand generation:

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Demand(also know as bill):demand is made on the customer for

repayment of the loan amount.
 The demand can be principle demand,Interest demand,bank charges
demand and charges demand.
 Demand are raised periodically during the life cycle of the loan
account.
 As when the instalment become due,system automatically raises a
demand for principle amount.

Demand Generation:
 Demand generation is process for interest can be run as on a specific
day.
 This date is by default the BOD date.It can be modified for any
previous date or future date.
 Future dated interest calculation possible only when all the days are
greater than the BOD date and the same is marked as a holiday in the
SQL calender.When the transaction are done it can be value dated for a
previous day.

Consider BOD date is 10.08.06.Interest run can be done as on 31.07.06

and transaction can be value dated to 31.07.06.

When the process is run you must invariable select Interest run to rise
demand for interest calculation.

Demand generation:

Demand generate is auto generated which contains interest

application where customer need to repay the loan along with interest
(i.e- EMI ) back to the bank.

In other words, Demand generation process can be run on a trial basis

or actual basis. If it is run on trial basis, the system does not update
any information, but simply generates a report of interest calculation

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or demand generation. Demand generation process for interest can be

run as on a specific day. This date is by default the BOD date. It can be
modified for any previous date or future date. Future dated interest
calculation is possible only when all the days are greater than the BOD
date and the same is marked as a holiday in the SOL calendar. When
the transactions are done it can be value dated for a previous day.
Consider BOD date is 10.08.06. Interest run can be done as on
31.07.06 and transaction can be value dated to 31.07.06. When the
process is run you must invariably select Interest run to raise demands
for interest calculation. (Assuming the value to be I - Interest for the
interest calculation process). Valid values are as follows: P – Principal
demand I – Interest demand B - Both. This field must be specified only
in case of Non EI type of loans. For TI Types of loans the demand is
always EI - Equated instalment demand which includes both principal
and interest. Demand generation process also has a concept of forced
interest run. If this value is set to Y, the Core Banking Solution
invokes calculation of interest for all the accounts which meets the
criteria whether interest is due on that account or not. If the value is set
to N and if the frequency does not match with the date mentioned for
Interest Till Date, then the account is skipped.

Example:

Consider EMI amount=25,000 then the interest demand=20,000

and principle demand=5000.

Note:

Loan Amount -2500000/-

Monthly EMI amount-25000/-

Jan -EMI [20000-Interest,5000-PI) Paid

Feb -EMI [19000-Interest,6000-PI) Not Paid

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mar -EMI [18000-Interest,7000-PI) Not Paid

Interest Overdue-37000(18000+19000)

PI Amount Overdue -13000(6000+7000)

Overdue Amount-50000(25000+25000)Total Pending Amount

OUT STANDING BALANCE:

Credit appraisal:
Credit appraisal means an investigation/assessment done by the bank
prior before providing any loans and advances/project Finacle and also,
cheeks the commercial, financial and technical viability of the project
proposed its funding pattern and further checks the primary and
collateral security cover available for recovery of such Funds. Credit
appraisal is a process to ascertain the risks associated with the
extension of the credit facility.

This normally involves appraising the borrower's payment history and

establishing the quality and sustainability of his income.

Types of credits:
Service credit

It is monthly payments for utilities such as telephone, gas, electricity,

and water. One has to pay a deposit and late charge if payment is not
on time.

Loan disbursement

Loans can be for small or large amounts and for a few days or

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several years. Money can be repaid in one lump sum or in several

regular payments until the amount one borrowed and the finance
charges are paid in full. Loans can be secured or unsecured.

Installment credit

It may be described as buying on time, financing through the store or

the easy payment plan. The borrower takes the goods home in
exchange for a promise to pay later. Cars, major appliances, and
furniture are often purchased this way. One usually sign a contract,
make a down payment, and agree to pay the balance with a specified
number of equal payments called installments. The finance charges are
included in the payments. The item one purchase may be used as
security for the loan.

Credit Appraisal process:

 Credit Processing
 Credit-Approval/Sanction
 Credit Documentation
 Credit Administration
 Disbursement
 Monitoring and Control of Individual Credits

Outstanding balance:

Outstanding balance is the sum of current purchases and other unpaid

amounts on loans. It includes purchases, cash advances, balance
transfers, interest, and additional fees you owe.

Outstanding Payment

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Invoice template that have been sent to a client and haven't been paid
and are not past due yet. Thus, up to the moment when the invoice is
paid, it is classified as an outstanding payment.

Overdue Payment

Invoices that have been sent to a client and haven't been paid and are
past due.

Overdue Interest:

Overdue Interest means interest due but not paid on the Interest
Payment Date on which such interest is required to be paid.

Total Overdue:

The total amount that you failed to pay as EMI.

Paid & Pending Payment

These are from invoices that have been sent to a client and have been
paid, but the funds are in the process of being transferred to you. This
typically occurs with ACH payments, which can take 5-7 business
days to arrive in your account.

Foreclosing:

Let us consider a loan amount of 5000000 rupees and maturity

period is for 10 years. If customer ready to repay all amount at a single
time after two years i.e-before maturity period then it is called
foreclosing.

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Important Finacle commands:

Menu Options:
Operation Menu for LLA Menu for CLA
Account Opening-Loan HOAACLA HOAACCL
A/C Open Modification –HOAACMLA HOAACMCL
Corporate Loan
A/C Opening-Commercial Loan-HOAACVLA HOAACVCL
Verification
Account Opening-Loan-HACMLA HACMLA
Modification
Disbursement HLADISB HCLDRDN
Demand generation/application HLADGEN HLADGEN
Repay amount (scheduledHLASPAY HLASPAY
payment)
Repay Amount(non-scheduledHLAUPAY HLAUPAY
payment)
Final payment HPAYOFF HPAYOFF
Close HCLSLAA HCLSLAA
Restructuring loan HLARA HLARA
Assets classification HSASCL HSASCL
Provisioning HASPROV HASPROV
Inquire asset ranking HASSET HASSET

Session 15:

HLADSP

HRRCDM

Session 16
Hnntm
Session 17
Dout clearing

Session 18
Deposits.

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1. Fixed deposits:

A lump Sum amount kept in the bank for a certain period and get interest
on it.
We can’t withdraw the money before the maturity period,if we withdraw
then returns will be less.
Maturity period (the period agreed to keep the money in the bank)may be
from 7 days to 10 years.

2. Recurring deposits:

Depositing a fixed sum of money for every month or quarter and earn a
decent amount of interest.
The minimum period of investing may be from 6 months to maximum of
10years.
Rate of interest are higher than Savings account
Withdrawals before maturity will be on certain conditions.

3. Flexi Fixed Account

Excess amount in saving account that is transferred to deposit

account.

Part Closure,Pre-closure.

Partial amount can be withdrawn from the FD.

Account will be still active.

Preclosure
Fully withdraw the amount
Account will be closed.

Part Closure and pre closure if they allow in bank there will be uncertainity.

Deposits as Security for Loans.

If deposits as collateral it should get marked as lien.

While closing the loan,unlink the deposit and loan account.

Renewal of term deposit

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The term deposit time will be increased ans account will be same.
When renewal we can renew with the same principle or with maturity
amount.

Maturity period:the period the deposit is with the bank

Maturity amount:The amount we get after the maturity period.

If the interest on deposit is credited to different account on monthly or

quarterly basis then the maturity amount will be same as participle
Otherwise amount will be Principle+interest.

Auto-closure .

When the account is matured the systems automatically close the

account,transfer to savings account.

Auto-renewal

When the account is matured the system automatically renew(increase the

maturity period) the account.

Proof of deposit

A certificate(receipt) is given that includes the details of FD or RD.

Tax deductible Source.

The interest paid on Deposits attracts tax in one or the other form.

Finacle menus.
Menu Operation
HTDGSPM Scheme Code
HOAACTD Account Opening
HOAACMTD Account modification before verification
HOAACVTD Account verification
HACMTD Account modification after verification
HTM Deposit to account from other accounts.
HCASHDEP Deposit to account by cash
HACINT Interest application
HCAACTD Close the account,pre-closure ,part closure
HCAAVTD Verify the closing of Term Deposit account

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HTDREN Renew the account(only after maturity period)

HDRP Printing of Deposit receipt.
HDUDRP Duplication of printing of Deposit Receipt.

Session 19

Creation of Loan account

Interest Table codes.

The interest rates to the accounts are assigned to the account through
Interest code in the menu HITCM and is linked in Currency details Screen of
HGSM/HTDGSPM/HLAGSPM/HCLGSPM.

Interest code creation involves 2 stages.

1. Creation of code in HITCM
2. Creation of version and slab through HIVSM/HLVSM/HTVSM.

Menu: HITCM
Fun:add
Interest Table code:This should be 5 characters

While creating interest table code user should select Interest version slab
maintenance
That its for loans, term deposits, transaction. Etc. As shown in the figure
below.

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HIVSM

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Submit

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