Core Banking System Implementation for

Cairo International Bank

T24 Training
Loans
Loans - Objectives

• Loans - dependencies

• Application specific Parameter tables, connected with Loans

• Product features of Loans

• Standard Enquiries
 LD Loan – product overview

Loans Fixed

Periodic
Fixed Discounted
Commitment period
Fixed
Interest
Stand-alone
bearing
Floating
Automatic Manual
commitment schedule
schedule
Bullet
interest Periodic
Commitment Bullet
charges principal Frequency
repayment for interest
Loan Dependencies

• Loan makes use of

• CUSTOMER
• ACCOUNT

• Core dependencies
• Accounting
• Limits (automatic, or predefine)

• LD also uses other Static tables

• Country, Holiday, Currency ….

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LD Dependencies – Product related

• Category codes used with Loans module. Ranges are hard coded
• 21050 - 21074 Loan
• 21095 – 21099 Commitment for loans

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 LD Dependencies – Interest related

BASIC.RATE.TEXT

Floating interest
BASIC.INTEREST

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

in BASIC.INTEREST

Possible to give a negative spread in LD

(so that effective rate is even negative)
Interest rate works out to 6.5% in this case

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LD Dependencies – Interest related

Periodic interest

Bid rate is
for Deposits

Offer rate is
for Loans

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LD Dependencies – Charges and
Commissions

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

Possible to indicate whether Bank wants to receive charges or pay them

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

ACCRUAL.FQU and ACCRUE.AMORT Fields. AMORTISN.PERIOD Field used to indicate Slide 8

the period of Accrual / Amortisation in months or years or till Next roll over date
LD Dependencies – Currency related
• Different Interest day basis for calculation of interest possible
depending on methods followed for calculating number of
days in an interest period and days in a year Key Days/Denominator
A 360/360
A1 360/360
A2 360/360
B 366/360
C 366/366
D 360/366
E 366/365
F 360/365
H 30/356
F1 360/365
F2 360/365
S Special
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LD – Product features

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Products handled

• LD.LOANS.AND.DEPOSITS
• Primary application to process two major activities of a bank
• Loans
• Deposits

• Suited for Corporate and Retail clients

• Asset products include

• Loans, commitment

• Liabilities include Deposits including certificate of deposits

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Fixed period Loans

• Interest Bearing

• Fixed Interest
• Floating Interest
• Periodic Interest

• Discounted

• Fixed Interest
• Periodic Interest
Interest and maturity

• Can be matured at End or Start of day or pre-paid online

• When discounted loans are pre-paid, option available to return or

retain extra amount collected

• Manually rolled over

• Upon maturity of an LD Loan, rollover can be done manually

• Principal increase or decrease possible

• Premature closing possible

• Loan contract can be closed before maturity date

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Repayment schedule

• Automatic schedule
• Bullet type of payment for principal at the end
• Interest at the end or in advance
• Periodical frequency for Interest

• Manual schedule
• Frequency or zig-zag scheduling for any event
• FWD, BWD, FSM, CAL and Base date key definitions needed

• In case of interest bearing contracts, possible to capitalise or

liquidate interest

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

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Term (Tenor)

• FIXED
• Maturity date is a specific date
• It can also be entered as number of days (D), weeks (W) or months (M) from
value date.
• Ex. : 12M or 7D

• HOLIDAY table of Countries / Regions indicated in BUS.DAY.DEFN Field checked to ensure

scheduled dates are working days
• When frequency is indicated and not a specific date, T24 automatically re-fixes the scheduled date
as per rules defined as FWD, BWD, FSM, CAL etc

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Interest Types

1.Fixed
• The rate of interest to be charged over the life of the contract is fixed at a specific
percentage and is input as a numeric value. The rate includes the spread.
2.Periodic Automatic
• Rate of interest key which will change on predetermined dates and become
effective on the appropriate revision date. Revision schedules are Not mandatory
3.Floating
• rate of interest which will change on a non determined basis with immediate
impact
4.Periodic Manual
• rate of fixed interest which will change on predetermined dates and become
effective on the appropriate rollover date. Revision schedules are mandatory
• Interest bearing loans can have any of the above types while Discounted
Loans cannot have Floating or fixed rates

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Fixed Interest Rate

• Interest rate fixed for life of contract unless amended using

NEW.INT.RATE Field

• Rate revision schedules possible

• Interest basis can also be “S” special

• Commitments and Annuity type loans can have only Fixed Interest
rate
• Mandatory input the interest 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

• Positive or negative spread could be added to this

• When rate changes individual contract rates recalculated

automatically

• Not valid for Commitments or Discounted or Annuity type repayment

contracts
• Mandatory input the interest Key field

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Periodic Interest - Automatic

• Interest rate change dates are pre-defined on schedule

• Changes to the rate will be picked up automatically through

PERIODIC.INTEREST

• Spread can be added / subtracted in the contract

• Starting interest rate (fixed rate)

• Manual input or allowed to pick from PERIODIC.INTEREST table by setting
USE.DEF.PI.RATE Field as YES in the contract
• Mandatory input the interest Key field

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Periodic Interest - Manual

• Future rate revision dates with or without applicable rates pre-

defined in schedule

• Rate revision schedules should coincide with interest schedule

• If fixed rates are mentioned, changes will be automatic after taking

into account spread, if any
• Mandatory input the interest Key field

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 LD Loans – Mandatory Details

• Id
• Auto generation Unique in the form of LDYYDDDSSSSS

• Customer
• Loan customer from drop down list or user input as Customer Id or Mnemonic

• Contract Currency
• Cannot be changed after authorization of Contract

• Loan Amount
• Possible to standard abbreviations like 10T, 5M and 1B

• Category
• Type of Loans.
LD Deposits – Mandatory Details

• Loan Start Date – Value date

• Date from which interest accrual starts
• Defaults to System date. Can also be forward or backward valued

• Loan Maturity date

• can be indicated as a date or as a number suffixed with D, W or M
• 3D – 3 Days; 2W – 2 Weeks; 6M – 6 Months
• Works out the next working day and displays that as maturity date
• When date is input, system generates override message if holiday

• Interest Basis
• Defaults from respective CURRENCY record
LD Deposits – Mandatory Details
• Interest Rate Type
• Rate type set as 1 for Fixed interests
• Rate type set as 3 for floating rate
• Rate type set as 2 for Periodic Automatic,
• Rate type set as 3 for Periodic Manual
• Credit Account
• Drawdown account to Credit the loan amount
• Defaults customer’s first current account in Loan currency

• Principle/ interest Liquidation account

• Account to which the maturity/installment proceeds to be debited
• Possible to indicate different accounts for Principal and Interest
 Workshop - 1
• Use User Menu > Corporate Operations > Loans > Create Loans >
Corporate Loans
• Input Loan with 150,000 USD for 12 months at a floating rate of 3% spread
over base rate
• The interest key “1”
• The interest basis “B”
• Commit the record
• Get the record authorised
• Use User Menu > Corporate Operations > Loans > Enquiries > Loan
Schedules (Summary)

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Workshop – 1 Solution

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 Workshop - 2

• Use User Menu > Corporate Operations > Loans > Create Loans >
Discounted Loan
• Input a loan for USD 100,000 for 1 year at 10% fixed rate with discounted
interest payment type for your customer
• Commit the record
• Get the record authorized
• Use User Menu > Corporate Operations > Loans > Enquiries >
Other Loan Schedules (Summary)

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Workshop – 2 Solution

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Creating a manual schedule

• Schedules for different components can be defined individually and

in combinations with or without set frequencies
• Principal, Interest, Annuity, Charges, Rate Revision, etc can be defined
individually or in combinations like Principal and Interest, Interest and
Charges

• Entered by inputting following information in LD

• AUTO.SCHEDS Field - No
• DEFINE.SCHEDS Field - Yes

• On committing the loan contract, LD.SCHEDULE.DEFINE application

is automatically launched

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Creating a manual schedule

• Define Forward Backward Key to specify the processing of events

scheduled when the processing day falls on a holiday

• Forward - Next working day

• Backward - Back to last working day if a non-working day generated

• Forward same month - Forward to next working day if in same month. If not
go back to last working day

• Not Automatic - Specify every event. this is selected if all the schedule dates
are defined by the user.

• Calendar - System uses date cycled

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Creating a manual schedule

• Base Date Key is used in conjunction with the Forward Backward Key to
specify the processing of subsequent events

• Base - Subsequent payment dates refer to original date input here

• Previous - Subsequent payment dates refer to previous payment date

• Null - All dates are manually input

Ex.: By selecting the option BASE, the date for each scheduled event will return
to the original date schedule namely 31st of every month. Example, next
payment due, will be 31st October , 30th Nov etc. Option PREV will
determine actual date of a payment based on the date of previous payment .
Example, if in the previous example the payment was taken on the 2nd
October the next payment would take place on 2nd November, not on 31st
Oct (due date based on base date). Option NULL is used when the
FORWARD.BACKWARD.KEY is set to Option 4 which is not automatic.

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 Creating a manual schedule

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

P – Principal, B – Principal increase, I – Interest, C – Commission, R – Rate revision, D - Diary
, A – Annuity, F – Fees,
Amount is required only for Principal and Fee schedules

RATE will be used when defining a rate review schedule

CHRG will need to be pre-defined in LMM.CHARGE.CONDITIONS

NO. indicates how many more times the event should happen with the set Frequency (4D, 3M etc)

Interest and Principal schedules should cover the maturity date of the contract
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 Workshop - 3

• Use User Menu > Corporate Operations > Loans > Create Loans >
Corporate Loans
• Input a loan for 1 year for USD 150,000 for your customer
• Interest fixed 7%
• Manual Schedule:
• Principal repayments of USD 50,000 each on 2nd commencing from
third month, 9th of sixth month and on maturity date
• Interest applied quarterly

• Use User Menu > Corporate Operations > Loans > Enquiries > Other
Loan Schedules (Full)
• Look at the repayment schedule

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Workshop – 3 Solution

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Workshop – 3 Solution

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Defining annuity type of schedule

• Only Interest bearing, Fixed interest type will be accepted

• In the contract, ANNUITY.PAY.METHOD Field should be set to Begin or
End to indicate whether the payment is at the beginning or end of
the period
• If Begin is chosen, the first payment will be only Principal
• To define Annuity schedule (A), Forward Backward key should be set
to Calendar (5) and Base date key as Base Date (1)

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Workshop - 4

• Use User Menu > Corporate Operations > Loans > Create Loans >
Corporate Loans
• Input Annuity type loans for 1 year for your customer
• Loan amount USD 50,000 each
• Fixed interest rate of 8%
• Repayments on quarterly basis
• Annuity Payment Method END

• Use User Menu > Corporate Operations > Loans > Enquiries > Loan
Schedules (Full)
• Look at the repayment schedules for both loans

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Workshop – 4 Solution

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Workshop – 4 Solution

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Online payment in contracts

• Can only be made to Current contracts

• Allowed only for interest bearing loans

• Not allowed for annuity type

• Partial repayment of Interest not allowed

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Amendments to contracts

• Can only be made to Current contracts

• Matured Contracts cannot be amended

• Changes
• Increase/decrease in Principal effected through AMOUNT.INCREASE and
AMT.V.DATE Fields
• Repayment of Principal and/or interest can be effected through
ONLINE.RPY.AMT and ONLINE.EFF.DATE Fields
• ONLINE.RPY.TYPE Field used to indicate P or PI to be adjusted while effecting
Principal decrease
• Online repayment possible only if value date is today or back dated
• Interest Rate and Spread could also be changed

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 Workshop - 5

• Use User Menu > Corporate Operations > Loans > Maintain Loans >
Amend/Reverse – Other Loans
• Pick out a contract opened earlier
• Increase Principal by USD 50,000 and reduce interest rate by 1% with
different future value dates

• Use User Menu > Corporate Operations > Loans > Enquiries > Loan
Schedules (Full)
• Look at the repayment schedule

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Slide 42
Workshop – 5 Solution

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Rollover

• Contracts can be rolled over manually

• Interest Options on Rollover

• Interest Accrual continued i.e. settle at new maturity date
•Change FIN.MAT.DATE Field
•No further action required in the case of automatic schedules
• Liquidate Interest
•Change FIN.MAT.DATE Field
•If frequency not mentioned in INTEREST.DUE.DATE Field, input I schedule in manual
schedule
• Capitalise Interest
•Change FIN.MAT.DATE Field. Ensure CAPITALISATION Field is
• set to Yes
•If frequency not mentioned in INTEREST.DUE.DATE Field, input
•I schedule in manual schedule

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 Workshop - 6

• Use User Menu > Corporate Operations > Loans > Maintain Loans >
Amend/Reverse – Other Loans
• Roll over the contract used in the previous workshop by another 3 months by
extending the maturity date
• If need be, redraw schedules suitably

• Use User Menu > Corporate Operations > Loans > Enquiries > Other
Loan Schedules (Full)
• View the effect of changes on repayment schedule

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Workshop – 6 Solution

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Workshop – 6 Solution

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Commitment

• Preferential access to bank funds

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

• Commitment can be revolving or non revolving

• When it is revolving, and when a loan already drawn is repaid, commitment will
be restored to the extent of amount repaid

• Multiple loan drawings / different loan contracts can be linked to a single

commitment contract
• Amount available for further draw down is updated on commitment contract
• Revolving / Non revolving commitments could be drawn in tranches
• Could be cumulative or non cumulative
• Unutilized portion carried over to the next tranche or allowed to lapse

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Commitment fee

• Commitment fee could be charged on the full amount of

commitment or on unutilised portion alone

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

rates with level / banded fee structure.
• 1 million 2%, 2 million 4%, 5 million 1%.
• If the unutilised portion is 4 million
• Under level calculation, the fee chargeable will be at 1%
• Under band calculation, it will be 2% for 1 million, 4% for the next 1 million and 1% for
the next 2 million

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Workshop - 7

• Use User Menu > Corporate Operations > Loans > Create Loans >
Input Commitment
• Input a Non-revolving Commitment for 5 million US Dollars available from
today for two years for your corporate customer
• Banded Commission @2%. Commission fee to commence after one day
• Draw downs available in multiples of 1 million US Dollar
• Get the record authorised

• Use User Menu > Corporate Operations > Loans > Enquiries > List of
Commitments
• View commitment details

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Workshop – 7 Solution

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Workshop – 7 Solution

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Draw down from commitment

• If a loan is drawn down from the commitment, limit for the

Commitment product is automatically adjusted appropriately

• In a revolving commitment, when customer pays back the loan,

Commitment available amount goes up

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Workshop - 8

• Use User Menu > Corporate Operations > Loans > Create Loans >
Loan under Commitment (Project Loans)
• Input a draw down of 1.5 million from commitment created in previous
workshop
• The loan is for 2 years and carries 5% fixed interest rate
• Get the record authorised

• Use User Menu > Corporate Operations > Loans > Enquiries > List of
Loans under Commitments
• View details of Loans drawn under Commitment

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Workshop – 8 Solution

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Workshop – 8 Solution

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Standard Enquiries
• Standard enquiries available include

• Loans disbursed today / Deposits received today

• Product wise list of loans / deposits

• LD schedules

• LD summary

• List of commitment contracts

• Drawings under commitments

• Interest accruals

• Repayment history
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 Workshop - 9

• Use User Menu > Corporate Operations > Loans > Enquiries > List of
Other Loans by Product
• View loans by products

• Use User Menu > Corporate Operations > Loans > Enquiries > List of
Commitments
• View outstanding Commitments

• Use User Menu > Corporate Operations > Loans > Enquiries > Other
Loans disbursed today
• View Loans disbursed on the system date

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Workshop – 9 Solution

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Workshop – 9 Solution

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Workshop – 9 Solution

Slide 61
Thank You

Slide 62