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Murabaha Money Market User Manual

1. MATURITY DATE 15 FEB 98 CALCULATION METHOD 30 Euro 365 AMOUNT 10 000 000 00 GBP WE REQUEST YOU TO ACKNOWLEDGE THE CONTRACT ON THE DUPLICATE AMERICAN BANK AUTHORIZED SIGNATORY MONEY MARKET DEPOSIT CONTRACT CONFIRMATION ADVICE Date 29 DEC 97 Reference Number 000MB07973630001 From MAIN BRANCH BOMBAY D N ROAD FORT BOMBAY 400 001 INDIA To TANAKA amp TANAKA GUTSHAUS 37133 RECKERSHAUSEN GERMANY CLE WE CONFIRM THAT A Money market borrowing 07 HAS BEEN ACCEPTED AS PER THE DETAILED BELOW 9 3 ORACLE BOOKING DATE 29 DEC 97 VALUE DATE 29 DEC 97 MATURITY DATE 28 MAR 98 CALCULATION METHOD 30 Euro Actual AMOUNT 99 999 00 DEM WE REQUEST YOU TO ACKNOWLEDGE THE CONTRACT ON THE DUPLICAT CI AMERICAN BANK AUTHORIZED SIGNATORY MONEY MARKET BROKER CONFIRMATION ADVIC GI Date 29 DEC 97 Reference Number 0003P04973630002 Broker Code SW1001 From MAIN BRANCH BOMBAY D N ROAD FORT BOMBAY 400 001 INDIA To Lucy King 23 Upperway Old Avenue r ORACLE WE CONFIRM THAT A MM PLACEMENT 04 HAS BEEN ACCEPTED AS PER THE DETAILED BELOW BOOKING DATE 29 DEC 97 VALUE DATE 29 DEC 97 MATURITY DATE 01 JAN 98 CALC
2. Component Dr Cr Br Account CCX PROFIT R 000 BNKCUL US1009 017 USD MMROO2 AMT R 000 BNKCUL US1009 017 USD PRINCIPAL P 000 BNKCUL US1009 017 USD PRINCIPAL INCR P 000 BNKCUL US1009 017 USD a ORACLE PRINCIPAL LIQD R 000 BNKCUL US1009 017 USD 9 1 9 Advice Generated for the Roll Over of a Borrowing ROLLOVER ADVICE FOR A BORROWING Money market borrowing 08 Transaction Date 31 JAN 98 Our Reference No OOOMBO08980010001 User Reference No ECS GB1003 Endsleign Court 24 Upper Woburn Place London WC1H OHA THE CONTRACT HAS B y EN ROLLED OVER WITH FOLLOWING DETAILS Principal Amount Old Principal Amount s 10 000 000 00 GBP Principal Amount 10 046 916 25 GBP Value Date 31 JAN 98 Maturity Date 01 MAR 98 Tenor 30 DAYS PROFIT FEE DETAILS ae ORACLE Description Amount CCY Rate Profit Basis PROFIT GBP Ou 20 30 Euro 365 SUBJECT TO CHANG GI Transaction on Initiation Component Value Date Account Amount COY OUR PAYMENT SCHEDULE WILL BE AS GIVEN BELOW Component Amount CCY Schedule Date 01 MAR 98 PROFIT 53 331 75 GBP PRINCIPAL 10 046 916 25 GBP SETTLEMENT DETAILS Component bir cr Br Account COY T ORACLE PROFIT P 000 BNKCUF GB1003 018 GBP PRINCIPAL R 000 BNKCUF GB1003 018 GBP PRINCIPAL INCR R 000 BNKCUF GB1003 018 GBP
3. Accounting Role Amount Tag Dr Cr Indicator INTERINC INTER_ACCR Credit INTERREC INTER_ACCR Debit PENL1INC PENL1_ACCR Credit PENL1REC PENL1_ACCR Debit PENL2INC PENL2_ACCR Credit PENL2REC PENL2_ACCR Debit Advices No advices allowed for this event 10 5 3 4 LIQD Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator CUSTOMER INTER_LIQD Debit INTERREC INTER_LIQD Credit PENL1REC PENL1_LIQD Credit CUSTOMER PENL1_LIQD Debit CUSTOMER PENL2_LIQD Debit PENL2REC PENL2_LIQD Credit ASSETGL PRINCIPAL_LIQD Credit CUSTOMER PRINCIPAL_LIQD Debit Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 PAYMENT_MESSAGE Payment Message 10 15 ORACLE Accounting Entries Nil Advices Advice Name Description MMAMDADV_ Amendment Advice Accounting Entries 10 5 3 5 VAMB Value Dated Amendment Booking 10 5 3 6 VAMI Value Dated Amendment Initiation Accounting Role Amount Tag Dr Cr Indicator ASSETGL PRINCIPAL_INCR Debit CUSTOMER PRINCIPAL_INCR Credit Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 Accounting Entries Nil Advices 10 5 3 7 CAMD Contract Amendment Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 Accounting Entries 10 5 3 8 NOTC Billi
4. al Component Currency Branch Account Account Currency Dr Cr Original Exchange Rate Exchange Rate lt Settlement Direction D Debit Component Description C Credit In this screen e Currency of the contract components and the branch will be displayed e You can change the payment account e You can specify the exchange rate if the Settlement Account Currency is different from the contract currency e You can capture the ERI Currency e You can capture the ERI Amount 5 17 1 Furnishing the ERI Value in Messages SWIFT messages MT 100 MT 202 generated towards settlement can furnish the value of the settlement amount in both the settlement account currency and an ERI currency If you opt to furnish the ERI value of the amount you have to enter the following in the Settlement Message Details screen e ERI currency e ERI Amount The system defaults to the ERI currency specified for the customer and currency combination You can change the default ERI currency The ERI amount that you specify will be validated against the Tolerance Limit specified for the ERI currency i ORACLE On January 1 1999 eleven countries that are part of the European Union embarked on the first phase of economic integration called the Economic and Monetary Union EMU The EMU ushered in a new single European currency the Euro EUR You can handle the Euro in Oracle FLEXCUBE by capturi
5. 11 3 Broker Confirmation Pending Report This report provides the details of the contracts pending broker confirmation To invoke the Broker Confirmation Pending Report screen type MCRPBRCF in the field at the top right corner of the Application tool bar and click the adjoining arrow button bee ORACLE Broker Confirmation Pending Report ReportFormat PDF PrinterAt Client v Report Output Print v Printer az Specify the print options Click OK to generate the report 11 3 1 Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page number Contents of the report Field Description Contract Reference The reference number of the contract Broker The Broker ID Name Name of the broker Elapsed Days The number of days elapsed Amount The contract amount Currency The contract currency Maturity The maturity date of the contract ee ORACLE 11 4Islamic Money Market Brokerage Details Report This report provides the brokerage details To invoke the Islamic Money Market Brokerage Details Report screen type MCRPBRDT in the field at the top r
6. ORACLE 2 2 Product Definition Facility A central feature of the front end modules of Oracle FLEXCUBE is the Product Definition facility This feature drastically reduces marketing time thus allowing your bank to focus on and take advantage of the opportunities in the market 2 2 1 Defining Murabaha Money Market Schemes as Products A product is a specific type of deal that a bank enters into or a scheme that a bank offers its customers An MMM product can imply a specific type of placement borrow deal that a bank enters into For example your bank may offer customers an overnight borrow facility This facility can be defined as a product in Oracle FLEXCUBE If your bank offers several types of overnight borrow schemes each of these schemes can be defined as a product When setting up the module you can define the various types of deals you enter into as products For each product you can define attributes such as profit profit accrual liquidation rollover tax brokerage details etc When you enter into a deal the deal acquires the attributes defined for the product that it involves Preferences Product Preferences Payments Authorization Rekey Fields Rollover Details Schedules Liquidation Order Grace Days Automatic Liquidation Track Accrued Interest Tax Applicable Forward Dating Allowed Allow Rollover Allow Brokerage Pay Past Schedules Prepayment Penalty Intra day Deal
7. 10 2MMM Events The following is an exhaustive list of events that can take place during the lifecycle of an MMM contract In the subsequent paragraphs we shall examine the accounting entries and advices for each of the events listed below Event Code Event Description Remarks BOOK Booking a contract Mandatory All Types INIT Takedown or Initiation Mandatory All Types ACCR Accrual Mandatory for products with profit payment frequency All Types LIQD Liquidation Mandatory All Types CONF Confirmation of contract All Types CAMD Amendment All Types NOTC Billing Notice Generation Placements ROLL Rollover execution treated as a liquidation new booking All Types REVC Reversal Mandatory All Types REAS Reassign User All Types RESD Reversal of Residual Accrual All Types REVC Contract Reversal All Types REVN Rate Revision All Types REVP Reversal of Payment All Types STCH Status Change Placements VAMB Value Dated Amendment Booking All Types VAMI Value Dated Amendment Initiation All Types 10 1 ORACLE Event Code Event Description Remarks OFFR Offer sent or accepted All Types GRNT Guarantee sent or received All Types UIDB Upfront Profit Booking All Types YACR Yield Accrual All Types 10 3 Amount Tags The amount tags listed below are hard coded in Oracle FLEXCUBE Amoun
8. The idea being that the schedule is not moved across months a ORACLE 5 6 2 4 Specifying the Holiday Currency You can specify the country of the deal currency for which the holiday table should be checked before drawing the payment schedules related to the deal In case a schedule falls on a holiday and you have specified that the schedule be moved forward or backward the movement happens according to the holidays in this country By default the currency to be checked is the deal currency If a currency other than this is specified the holiday table will be checked for both the currencies 5 6 2 5 Specifying the Mode of Liquidation When creating a product you specify the mode of liquidation whether automatic or manual Your specifications will apply to all deals involving the product Through the Contract Preferences screen you can change the mode of liquidation for the deal that you are processing from automatic to manual or vice versa 5 6 2 6 Cascading Schedules The question of cascading schedules arises only if e You have specified that a schedule falling due on a holiday has to be moved forward or backward e The schedule has been defined with a definite frequency If you have indicated that schedules should be cascaded the schedule date for the next payable schedule will depend on how the schedule date was moved for a holiday The following example illustrates how this concept of cascading schedules functions
9. You can do aging analysis by changing the status of a placement on which payment s are defaulted At any time you can generate reports of deals with details of aging to facilitate the follow up process for repayment Example You could define the following status for the product Three month Placements e Active This is when repayments on a placement are done as per schedule e Past Due Obligation PDO This is when repayments on a placement have been stopped but the accruals on the accruable components are still being done There is still a chance of repayment of the deal e Non accrual basis NAB When the placement acquires this status all accruals for the placement are stopped The chances of repayment diminish further e Write off WRO This is when the placement is written off and all accrual entries are reversed Status Sequence PDO 1 NAB 2 WRO 3 You want a placement under this product to move from status to status in the order in which they are mentioned here For such a condition you can indicate the number of days after which each component should move to the status being defined these can differ for a maturity schedule and an interim schedule According to the number of days of default defined for each component a placement will first be moved to PDO from Active status then to NAB and lastly to WRO status You can also indicate the change of GL if any when a component comes
10. cccccccscscsccesscesscesecesecuseceeeseeeseesseeseeeseceseensecaecsaecnaessaeenaeensens 5 20 5 10 VIEWING SCHEDULE DA TA O e a a a aT 5 20 5 11 VIEWING REVISION SCHEDULE DETAILS ccccccccececececececececececececececececececececscecscececececececececececececeeeeeceeecs 5 21 5 12 MAKING MANUAL PAYMENTS a soveasueds bedenseaveo E O ATE 5 21 5 13 INVOKING THE CONTRACT SCHEDULE PAYMENTS SCREEN cccscsesecesececececececececececececscececececececececseseeeecs 5 22 5 14 FEATURES OF THE CONTRACT SCHEDULE PAYMENTS SCREEN cccccesececececececececececececececececececececeeseeeeeecs 5 23 D141 Inputof Mantial Payments ves i siirsin o o E EEEN A Ai R 5 23 5415 NAVIGATING TO OTH A OCR NS e a e E E a Ea a 5 25 oA KOR PAYING TAX E E E E E E es 5 25 53 17 USING THF SETTUEMENTS OOR AN e e a e eE E ETE A AERE 5 26 5 17 1 Furnishing the ERI Value in Messages nnsoeneeeeeeeeereeersreerrsreereserrrssesressesrereeserrresereessrsreeresee 5 27 517 2 Suppressing Messages soeieto tea iE ETE ESTEE E ENEE IVETE VE EE S TETEE KETEK EEEE wets are 5 28 5 17 3 Viewing the Schedule Breakup Details cccccccesccesccsseeseenseeseeesceseceseeeeecesecesecsecuaecuaecaaecnaseneeeneees 5 29 5 174 Schedule Payment COMpOnents cvccsessis iisen eena eira e sv TTEA NLE EE Ei 5 29 SATS Schedule Payment Due Date ie EE E ah esata de gutted EEEE ES 5 29 DAO e CAA O E a a a a EE ANS 5 30 5 17 7 Schedule payment Amount Paidin eresi ee ii a eai 5 30 3
11. Counter Party The ID of the counterparty Counterparty Name The name of the counterparty Currency The currency in which the amount is displayed Amount The amount Euro Equivalent The amount in terms of Euro Value Date The value date of the contract Notice Days The number of notice days Maturity Type The maturity type Maturity Date The maturity date Profit Details Component The profit component Amount The profit amount Euro Equivalent The profit amount in terms of Euro Rate The profit rate Rate Code The profit rate code Spread The spread Waiver Indicates if waiver is applicable Charges Component The charge component Amount The charge amount Euro Equivalent The charge amount in terms of Euro Waiver Indicates in waiver is applicable in charge 11 12 ORACLE 11 9lslamic Money Market Forward Changes Report This report provides the details of Islamic money market forward changes To invoke the Islamic Money Market Forward Changes Report screen type MCRPFWCH in the field at the top right corner of the Application tool bar and click the adjoining arrow button Islamic Money Market Forward Changes Report Product Type Placement Borrow Commitment Report Period From Date E To Date amp Sort Criteria Transaction Date Reference Numb
12. Description Reference Number The contract reference number Counterparty The counterparty identification Name The name of the counterparty Component The ICCF component Profit Method The profit calculation method Currency The contract currency Start Date The start date of the profit calculation End Date The end date of the profit calculation Basis Amount The basis amount Rate The rate of profit Number of days The number of days of the schedule Profit Amount The total profit amount for the specific period Maturity Date The maturity date of the contract Value Date The value date of the contract ORACLE 11 6lslamic Money Market Counterparty Confirmation Pending Journal You can generate Islamic Money Market Counterparty Confirmation Pending Journal report To invoke the this screen type MCRPCPCN in the field at the top right corner of the Application tool bar and click the adjoining arrow button islamic Money Market Counterparty Confirmation Pending Journal ReportFormat PDF wv PrinterAt Client v Report Output Print v Printer Specify the report options and click OK to generate the report 11 6 1 Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Head
13. US USD USD USD 9 1 11 Advice Generated for the Initiation of a Placement INITIATION ADVICE FOR A PLACEMENT MM PLACEMENT 04 Transaction Date 29 DEC 97 Our Reference No 0003P04973630002 User Reference No TC8 9 12 ORACLE US1009 516 W 34 St New York NY 10001 WE CONFIRM HAVING PLACED WITH YOU Principal Amount Principal Amount 12 000 000 00 AUD Value Date a 29 DEC 97 Maturity Date 01 JAN 98 Tenor 3 DAYS PROFIT FEE DETAILS Description Amount CCY Rate Profit Basis PROFIT AUD L29 Actual 365 SUBJECT TO CHANG Gl Transaction on Initiation Component Value Date Account Amount CCY wae ORACLE Component Description Account Branch PRINCIPAL USD 29 DEC 97 Principal Amount 000 BNKCUL US1009 017 8 469 791 00 YOUR PAYMENT SCHEDULE WILL BE AS GIVEN BELOW Component Amount CCY Schedule Date O1 JAN 98 PROFIT 12 329 00 AUD PRINCIPAL 12 000 000 00 AUD SETTLEMENT DETAILS Account CCY Component Dr Cr Br PROFIT R 000 17 MMR002_AMT R 000 Af PRINCIPAL P 000 BNKCUL US1009 01USD BNKCUL US1009 01USD BNKCUL US1009 01USD 9 14 ORACLE 17 PRINCIPAL INCR P 000 BNKCUL US1009 01USD 17 PRINCIPAL LIQD R 000 BNKCUL US1009 01USD cea 9 1 12 Advice for Liquidation of Placement FINANCE BILLING NOTIC Ea Date 31 DEC 97 Refe
14. ae ORACLE Specify the module code and source code The system will upload the unprocessed data and validates them After validation it posts the entries into the contract table You can verify the uploaded data in Oracle FLEXCUBE by accessing Commodity Tracking screen ie ORACLE 9 Customer Correspondence 9 1 Introduction Transfer of funds between parties is always confirmed and corroborated with the exchange of messages advices or receipts The MMM module incorporates the generation of various notices to the parties involved in the contract into its deal processing This chapter explains the types of messages generated at each stage for each type of contract that the MMM module handles Once the event is authorized you can generate various types of advices and notices at any time of the day You can also specify the media through which these advices can be sent For all the advices and notices discussed here the samples are given below To generate the advice click on Outgoing Message Browser under Messages in the Application Browser The format and contents of the advices can be configured for your requirements However the default advice formats are available when Oracle FLEXCUBE is shipped to you In the MMM module you can generate the following advices 9 1 1 Confirmation Advices The Contract Confirmation advices are given by the bank to the customer on confirmation of the contract A Contract Confirmation
15. 90 91 90 91 272 73 During the last liquidation the system will round off the total of such schedules for tax to the nearest decimal point that is USD 273 5 17 Using the Settlements Screen When the deal and the accounts for payment are in different currencies you may enter the Foreign Exchange rate for conversion in the Settlements screen If the customer account for a component was expressly not defined at the time of deal input you will have to specify an account at the time of payment through the Settlements screen The payment accounts can also be changed for the various components at the time of payment The new payment accounts will only be used for that particular session of the manual payment function Example For instance you have named an account A1 for a particular component at the time of deal input but during manual payment you wish to change it to A2 Once this particular payment is carried out the system will show the default account as A1 for that component A2 will be used only for the session that you have specified for manual payment oe ORACLE To invoke the Settlements service from the payments function click Settlement button in the Contract Schedule Payments screen Settlement Details Reference Number Component Account Details Message Details Parties Parties Cover Parties Other Details Clearing Details Local Clearing IBAN Account Number Settlement Details
16. Buttons Descriptions Settlement Click to go to the Settlement Message Details screen Advices Click to see the Advices screen You can suppress advices using this screen Events Click to view the Events screen Tax Click to see the Tax Details screen Breakup Click to view the Schedule Breakup screen 5 16Paying Tax When there are taxes charged on the profit principal and so on the payment of the component will always include the corresponding tax amount If the payment does not include the full amount due the proportional tax amount must be liquidated You should input the total amount to be applied to the component The system then calculates the corresponding tax amount based on the tax rate and distributes the amount paid between the component and the tax R ORACLE Example If a customer owes USD 1000 in profit tax inclusive the tax rate is 10 and he pays you USD 1000 the payment is automatically distributed into USD 909 09 profit and USD 90 91 the tax component He will still owe you USD 90 91 in profit and USD 9 09 tax in tax Total tax is always calculated on the full schedule Therefore if there is a rounding difference it will be adjusted in the last liquidation Example In the above instance the tax component has come to USD 90 91 for that schedule Suppose the total tax component is USD 273 If this is paid in three schedules the total will come to USD 272 73 90 91
17. If you have defined automatic liquidation for the product you can specify the order of liquidation of the various components which have e schedules that fall due on the same day and e the same repayment account You can specify the order in which you would like to liquidate components in the Component Liquidation Order screen For a contract defined with manual liquidation of components the liquidation order will be considered when a payment has to be automatically distributed among the various outstanding components For a contract with automatic liquidation the order of liquidation becomes important when funds are insufficient in the repayment account on the day of liquidation and more than one component has a schedule falling due on that day Under such circumstances you may want to allot priority to the recovery of certain components For example you may want to recover the profit or profit type of components first and then the principal The aging analysis function takes over once a component is overdue and an appropriate compensation is applied For a component on which compensation profit has been applied you may wish to recover compensation profit first the profit next and finally the principal You can specify the liquidation order for all the profit type of components and the principal 3 2 1 6 Defining other Preferences From the Murabaha Money Market Preferences screen you can invoke other screens in
18. If you specified that processing has to be done today on System date for automatic events up to the day before the next working day then on October 30 itself the schedule of October 31 will be liquidated during the End of Day EOD run of the Automatic Contract Update function If you specified that processing has to be done only up to the System Date then on October 30 only the events scheduled for that date will be processed This means that since the schedule date is October 31 which is a holiday the schedule will be processed on November 1 the next working day during the Beginning of Day BOD run of the Automatic Contract Update function Move Schedule Dates Forward or Backward If a schedule date falls on a holiday and you have not specified that holidays are to be ignored at the time schedule definition then you have to indicate the movement of the schedule date either forward to the next working day or backward to the previous working day In such a case since the schedule date itself is moved to a working day the payment will be processed on the day it falls due as of that day Example For a placement you have defined monthly schedules falling due on the following dates e March 31 e April30 e May3i April 30 is a holiday You have the following options in fixing the date for that schedule sd ORACLE You can ignore the holiday The schedule date will still be on April 30 despite the holiday The liquidation of
19. Multiple Contract all Based on date range From Date To Date Contract Selection Single Contract Report 10f1 ReportFormat PDF Printer At Client X Specify the following details Contract Specify whether you want to generate the report for one or more or all contracts If you select Single contract you need to specify the contract reference number ID in the space provided below If you select Multiple Contract you need to specify the contract reference numbers whose details you need From Date Specify the start date of the report date range To Date Specify the end date of the report date range i ORACLE Single Contract If you are generating the report for a single contract you need to specify the contract reference number Select the appropriate contract reference number from the option list Report If you are generating the report for multiple selected contracts you need to specify the contracts here Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page number Contents of the report Field
20. Specify the following details Product Type Specify product type for which you want to generate the report You can select the required product types from the following e Placement e Borrowing Product Code Specify product type for which you want to generate the report Coniract Currency Specify the contract currency of the contracts that you need to include in the report Customer Specify the customer number whose contracts you need to include in the report From Revision Date Specify the start date of the value date range To Revision Date Specify the end date of the value date range Maturity Type Select the maturity type from the drop down list Bees ORACLE From Maturity Date Specify the start date of the schedule date range To Maturity Date Specify the end date of the schedule date range Contract Status Specify the contract status The system will generate the report based on the contract status Authorization Status Specify the contract authorization status The system will generate the report based on the authorization status Click OK to generate the report 11 13 1 Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which
21. screen the default schedules which you want applied to the deals involving the product are specified through the Product Schedules screen an ORACLE At the time of deal processing you can change the schedules which have been inherited by the deal to suit your needs If the profit specified is an amount and not a rate Special type of Profit you should enter this amount for the profit component You should specify the number of schedules for the component interim schedules and maturity schedule You can give the Start Date Frequency and Unit afresh or let the details inherited from the product remain If schedules are not defined for the product then the borrowings or placements under it will have bullet or balloon schedules by default That is all the components will be liquidated on maturity Since for a Murabaha money market deal the principal is always repaid at Maturity you need not define a schedule By default the principal will have a bullet schedule 5 3 Setting Product Schedule Preferences You should define the attributes of the schedules for a product through the Product Preferences screen To invoke the Product Preferences Screen click Preference button in the Product Definition screen Preferences Product Product Description Preferences Accrual Payments Frequency Automatic Liquidation Start Month Track Accrued Interest Start Date Tax Applicable Forward Dating Allowed Minimum D
22. 0 if you do not wish to allow residual amounts This means that all the components should have zero balances for the placement to be marked as liquidated When this amount is increased or decreased all placement meeting the conditions will be liquidated during the next Automatic Batch Update Residual TXN Cd This is the transaction code for the accounting entries to be passed when the residual amount is liquidated User Ref No in Messages If this option is checked then the user reference number will be used instead of the contract reference number in the following messages 8 3 1 Confirmation Messages SWIFT Mail Field22A If the event is BOOK and the parent Oracle FLEXCUBE ref no is not null and the counterparty of the parent and child contracts are same then type of operation will be set as AMND and Field 21 will be populated as the user reference number of the contract This is applicable to both MT320 and MT330 Field21 In case of reversed Contract if the confirmation for CANC is not suppressed then the user reference no will be picked up from the child contract and populated User ref no In case of reversed Contract if the confirmation for CANC is not suppressed then the user reference no will be picked up from the child contract and populated Event text If the event is BOOK and the Reversed Oracle FLEXCUBE ref no is not null and the counterparty of the parent contract and child are the same then t
23. 8 9 AUTOMATIC ROLLOVER OF A DEAL Tirreni aE EE TEN a TEREE EEA E eE EARE I EE EERE S 8 11 8 9 1 Adyices for Rollov assie i erine rE pede TENEKE ALe Eea ab OEE TONES venvane E Ea SEa nS 8 12 8 9 2 Automatic Status CHANGES s scicis woes vest isisi eE EEEE EEEa YESEK EEE VASTEKS EE KE SE tTa EER iaa 8 12 8 9 3 AUTOMATIC STATUS Changes niesieni esaa a E anes a E a ESEE P E eke aias Eare 8 13 8 9 4 Advices to be Generated for a Status Change eesssesesseseeseeeseeressserreresrsrrerrsreerssrerrnsererssrsreereseee 8 13 8 10 ACCRUAL OFTCCE COMPONENTS eiie aeee a eere NE E ERE Ee aE EEEREN SE EESE 8 14 8 10 1 Contents of the Accrual Control Journal oseseseeeseesseseseeeseeesrsreessreeresesrresestesrssresrssereresesreereseee 8 14 8102A sntr Day Aceralia an uk cee e E E E E ed a S ee eS 8 15 8 11 PROFIT RATE REVISION ON A DEAL monedone eane sessions e erea SE oiee NE REREN E ESEE EAE REESE 8 15 8 12 VALUE DATED CHANGES Crogi rootear ee r E E EEA E E EE a r E E E EA E iS 8 16 8 12 1 Advices Generated for Value Dated Changes eseeseseeeeseeeeeesereeesrsrresesrrsrsrersreserrresrsreereseee 8 16 8 13 TRIGGERING THE YEAR END BATCH PROCESS FOR COLLECTING CONTRACT WISE DATA s seesesees 8 17 8 14 COMMODITY UPLOAD a a eere E E EEEE EEEE E E E EA EE E EEE 8 17 CUSTOMER CORRESPONDENCE sssesssossesesesocrosoreeseseeoerosoroeseseeoerororeesesocoseosoroesesoseesosossesesossosoressesesoseesos 9 1 9 1 IONNS DILSA H LOIN PEE E E E E E E E E E E E 9
24. Example A weekly schedule has been defined with backward movement and a schedule date falling due on April 30 1998 was moved to April 29 1998 30 April 1998 being a holiday The schedule date for May depends on whether you have chosen to cascade schedules If you have the schedule date for May will be set as May 6 1998 as the frequency has been specified as weekly For subsequent schedules also May 6 1998 will be considered the last schedule date If you have not specified that schedules have to be cascaded the date originally specified will be the date for drawing up the schedules Even if the April month end schedule has been moved to April 29 1998 the next schedule will remain May 7 1998 When you cascade schedules the last schedule at maturity however will be liquidated on the original maturity date and will not be changed like the interim schedules Hence for this particular schedule the profit calculation days may vary from those of previous schedules as the case may be whe ORACLE 5 6 2 7 Ascertaining the Availability of Funds When the customer s repayment account is debited automatically by the system you can specify that the availability of funds for liquidation of the various components of a borrowing has to be ascertained before the liquidation is done This feature is of significance when e The components have the same schedule dates and are serviced by a single repayment account e The funds in th
25. date forward or backward to the next working day or the previous working day respectively Since the schedule date itself is moved to a working day the payment will be processed on the day it falls due as of that day Example For a borrowing you have defined weekly schedules falling due on the following dates e March 31 1998 oe ORACLE 5 6 2 3 e April 7 1998 e April 14 1998 April 7 1998 is a holiday You have the following options in fixing the date for that schedule You can ignore the holiday The schedule date will still be on April 7 1998 despite the holiday The liquidation of the schedule will be done as per your specifications in the Branch Parameters screen You can move the schedule date forward to the next working day which happens to be April 8 1998 The schedule will be liquidated during Beginning of Day BOD processes on this date as it is a working day The across the month movement discussed subsequently comes into the picture here You can move the schedule date backward The schedule date will be April 6 1998 the last working day before the holiday The schedule will be liquidated during BOD processes on this date as it is a working day Moving Schedule Dates across the Month If you have chosen to move a schedule falling due on a holiday to the next working day or on the previous working day and it crosses over into another month the schedule date will be moved only if you so indicate If not t
26. e f you have specified that processing has to be done only up to the System Date then the events scheduled for the holiday will be processed only on the next working day after the holiday during beginning of day processing If you have defined verification of funds for the product it will have an impact on the automatic liquidation If specify manual liquidation you should give specific instructions for liquidation through the Manual Liquidation screen on the day you want to liquidate the schedule 1a ORACLE Track Accrued Profit You have to specify whether the accrued profit of earlier placements that has not been paid should also be considered as the utilized amount for the purpose of credit administration You could have more than one profit type of component applicable on a product In such a case you should designate one as the main profit The following example illustrates how this concept works Example Greenville Global Bank has taken a money market placement of USD 100 000 from you on June 1 1997 at 20 profit The deal is to be liquidated at Maturity on May 31 1998 This customer s central liability limit is USD 110 000 Now Greenville Global Bank approaches you for another placement of USD 10 000 on December 31 1997 If you have opted to track the accrued profit the Bank s total liability on December 31 1997 is USD 111 670 USD 100000 USD 11670 as of December 31 Profit calculation meth
27. only the events scheduled for the System Date will be processed The events of the holiday are processed on the next working day during beginning of day processing Example A daily profit repayment schedule date for Cavillieri and Barrett Finance Corporation s borrowing of USD 100 000 for one week at 16 profit falls on October 31 a holiday If you have said Ignore Holidays by clicking this field the schedule date will remain on October 31 when the schedules are fixed The processing of this is determined by your holiday handling specifications in the Branch Parameters screen If you specified that processing has to be done today on System date for automatic events up to the day before the next working day then on October 30 itself the schedule of October 31 will be liquidated during the EOD run of the Automatic Contract Update function If you have specified that processing has to be done only up to the System Date then on October 30 only the events scheduled for that date will be processed This means that since the schedule date is October 31 which is a holiday the schedule will be processed on 1 November the next working day during the BOD run of the Automatic Contract Update function 5 6 2 2 Moving Schedules Forward or Backward A schedule date falls on a holiday and you have not specified that holidays are to be ignored at the time of schedule definition In such a case you should indicate the movement of the schedule
28. product types When you create a product you must specify the type to which it belongs For example you should specify the product type as Placement if you are defining a placement product and Borrowing if you are defining a borrowing product 3 2 Setting Product Preferences Preferences are the options that are available to you for setting the attributes of a product The options you choose ultimately shape the product ae ORACLE For example you have the option of applying tax on a product If you specify that tax is applicable for a product the deal involving the product will inherit the attribute However you can waive tax if it has been defined for the product the deal involves at the time of deal processing Similarly you choose between the automatic liquidation of schedules and manual liquidation you can choose to allow rollover of deals involving the product or deny it and so on Preferences Product Preferences Payments Authorization Rekey Fields Rollover Details Schedules Liquidation Order Grace Days Payments Automatic Liquidation Track Accrued Interest Tax Applicable Forward Dating Allowed Allow Rollover Allow Brokerage Pay Past Schedules Prepayment Penalty Intra day Deal Multiple Penalty Components Currency Value Date Contract Amount Maturity Date Product Description Accrual Frequency Start Month Start Date Minimum Default Maximum Unit Rate Variance
29. the placement by default However you can change the status for the contract through this screen When you are capturing placement details the system allots the status of Active by default You may change it to any of the status codes as per your requirement While doing manual status changes ensure that you change the status in the order they are defined For example the status codes are defined as follows in that order e Active e Past Due e Non accrual e Write off You cannot change the status of a placement from Active to Non accrual by passing Past Due If the requirement is that the placement has to be put in the Non accrual status from the Active status you should first change the status to Past Due store and authorize this status change and then change it to the Non accrual status If a status change has been defined with a change in the GL the entries will be passed for the GL movement Payment method The payment method defined for the main profit for the product whether bearing discounted or true discounted applies to the contract as well The method defined for the product is displayed here aM ORACLE If the payment method defined is Bearing then the profit is liquidated on schedule payment date s Example You have made a placement USD 100 000 for Greenville Global Bank at 20 profit for a month Now under the bearing type of profit payment method the nominal placement of
30. today then only the events scheduled for the system date the last working day before the holiday will be processed The events that fall due on the holiday will be processed on the working day immediately following the holiday during beginning of day processing Example The current system date is October 30 1997 Assume that the repayment schedule for a deal falls due on October 31 1997 This is a holiday If you have specified that processing has to be done today the last working day before the holiday for automatic events right up to the day before the next working day the schedule liquidation for events falling on October 31 1997 will be done on October 31 during end of day processing If you have specified that processing has to be done only up to the System Date today then only the events scheduled for October 30 will be processed on that day The liquidation scheduled for the holiday October31 will be done during beginning of day processing on November 1 8 6 Initiating a Future Value Dated Deal A future dated deal is one that has a Value Date that is later than the date on which it is booked The Automatic Contract Update function will initiate the deal on the Value Date of the deal during BOD processing If there were holiday s preceding today future dated deals that were dated for the holiday s will also be initiated if you have specified that events falling on a holiday should be processed on the next wor
31. 1 9 1 1 Confirmation AdViCES 32 s5sc3ssesseecasesseesisastnssasedbeetaseantesasescevasesbessaseadesdasuseee cane cepa casecvepsasedbessbseseuecasaas 9 9 1 2 Rollover Advice for a Placement vis sscsscessesigsessesaasusseecasesipacezetvoscasaaasccainsenssasaavaacisnsvessaseasegsgdeanes cases 9 9 1 3 Rollover Advice for A BOrrOWING ccsscccscesscessceescesecesecusecsecsaeeasesseesseesseeseeeseceseceseenseceaecsaeenaeeneeeaeees 9 9 1 4 Initiation Advice for a BOTTOWING ccscccceesseeceescesecusecesecunecssecaeeeseesaeecseesecesecesecesecnaeceaecsaeenaeeaeeeaeees 9 9 1 5 Initiation Advice fOr PlACEMENE cx cssscecscsessessetassvsseecasesipacesecvosctsnssvasasesevessasvoatusnnvesea ceases sgceanessaseat 9 9 1 6 Liquidation Advice for a Placement cceccescceecessceseceecusecseeasecseeeseesseeseeeeeesecesecnsecuaecsaecnaeeaeeeneees 9 2 9 1 7 Advices Generated During Contract Confirmation ccccccsccescesecsseesseereeeseeeeeeeeceeseeseceseensecuaeonaeenae 9 2 9 1 8 Advice Generated for the Roll Over of a Placement 0 ccesccesecesecsteenseeeeeseeeeceseeeseeeecescensecnaeonaeenss 9 5 9 1 9 Advice Generated for the Roll Over of a Borrowing scccscceseceteeseenseeseeeseeeseesecenseeseeeseenseeaecnaeeuas 9 8 9 1 10 Advice Generated for the Initiation of a Borrowing c cccesceeteeseeeceeeeeeecesecesecusecusecuaecasecneeeseeeaeees 9 10 9 1 11 Advice Generated for the Initiation of a PlACEMENE cccesceste
32. All deals involving the product will acquire these attributes 5 4 1 Specifying the Component You can define different repayment schedules for the different components according to your needs First of all you should specify the component for which you want to define the schedule All components the principal and any other component depending upon your ICCF definition for the deal are available in the form of an option list You will have to define schedules for each of them When defining repayment schedules for specific deals the amounts for components like profit commission and fee will be calculated by the system automatically depending on the repayment date and amount of the principal However for deals with special profit you will also have to provide the profit amount sa ORACLE 5 4 2 Setting the Reference Date You should indicate in this screen whether the dates of repayment schedules should be calculated based on the Value Date date of initiation of the deal of the deal involving the product or a Calendar Date If you specify that the Reference is the Value Date date of initiation of the finance the dates for schedule repayments will be based on this date and the Frequency If the Reference is specified as the Calendar Date the dates for schedule repayments will be based on the Start Date specified by you the Month and the Frequency The following example illustrates this concept Example A borrowi
33. In a situation where the initiation event for MMM deal has not been triggered during the BOD processes you can choose to trigger it manually using the Reopen option in the Toolbar or from the Actions Menu A typical instance when the system does not trigger the initiation event is due to insufficient funds You can manually trigger the initiation event for all uninitiated MMM deals with value date less than or equal to the system date If your user profile has been granted the Auto Auth privilege such a deal gets authorized automatically after initiation Otherwise it has to be authorized by a different user from the MMM contract online screen 4 14 Maintaining the Commodity Details for a Contract Murabaha MM contracts that require commodity tracking are processed under products for which you have selected the Commodity Tracking option as a preference in the Murabaha Money Market Preferences screen For such contracts commodity tracking becomes mandatory to activate the contract You can capture the commodity details for a contract using MC Commodity Tracking screen You can invoke this screen by typing MCDCOTRIK in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button The screen is displayed below Commodity Tracking Contract Reference Event Sequence Counterparty Number Operation Goods Description Global Agreement reference Global Agreement Ref D
34. Maximum Rate defined in the Product ICCF screen The rate specified for the deal along with the spread can exceed the profit rate specified for the product only within the variance rate specified for the product Example The variance you have specified in the product ICCF screen is 20 Assume the profit rate which defaults from the product is 10 You can change the profit rate for the deal while processing to 12 The changed rate will be accepted as it exceeds the default rate only by 20 which is the maximum variance that you have defined for contracts involving the product But if you add a spread of 0 5 to the rate the rate for the deal becomes 12 5 This will not be accepted as it exceeds the maximum variance limit defined for the product which is 20 Special Profit Amount If the product involved in the deal has been defined with a special profit the profit amount applicable for the deal will be displayed in this screen You can change it a ORACLE Rollover While setting up a product if you specified that deals involving the product should be automatically rolled over all deals involving the product will be rolled over on their respective Maturity Dates if they are not liquidated This feature is called auto rollover If auto rollover is specified for the product the deal involves it will be indicated on this screen However if you do not want the deal whose details are being captured to be rolled over you ca
35. Multiple Penalty Components Currency Value Date Contract Amount Maturity Date Product Description Accrual Frequency Start Month Start Date Minimum Default Maximum Unit Rate Variance Normal Maximum Holiday Treatment Holiday Currency Schedule Movement Cascade Schedules Ignore Holidays Move Across Month Move Forward Move Backward ORACLE 2 2 2 Advantage of Defining a Product The product definition facility is a one time effort When defining a Murabaha money market deal type or scheme as a product you can specify amongst other details e the tenor e the rate of profit e the repayment schedules e the tax details e the accounting entries to be passed e the advices to be generated The user does not have to specify these details every time a deal is entered The product definition facility thus reduces the time required to capture a deal The product definition feature also facilitates e quick retrieval of information relating to deals of a particular type e standardization of Murabaha money market schemes across branches e modification of standard features of a scheme to suit specific requirements 2 3 Automatic Processing Features Oracle FLEXCUBE completely automates and tracks all the events in the lifecycle of a Murabaha money market deal It e Generates deal tickets e Accrues profit e Liquidates due schedules e Matures contracts due for maturity e Rolls over deals according t
36. Normal Maximum Holiday Treatment Holiday Currency Schedule Movement Cascade Schedules Ignore Holidays Move Across Month Move Forward Move Backward You should specify whether the payment method for the main profit specified while defining attributes for the profit commission charge or fee components is to be bearing discounted or true discounted This cannot be changed at the time of processing a deal If you select Bearing then the profit is liquidated on scheduled payment date s Example You have made a placement USD 100 000 for Greenville Global Bank at 20 profit for a month Now under the bearing type of profit payment method the placement of USD 100 000 is advanced to Greenville Global Bank and the profit on it is collected over the one month which is the tenor of the placement If you select Discounted then the profit is deducted from the principal at the time of initiating the deal a ORACLE Example Carrying forward the example of the placement for Greenville Global Bank of USD 100 000 at 20 profit for a month under the discounted type of profit payment the total profit calculated for the tenor of the deal that is one month USD 1 666 5 is deducted from the principal USD 100 000 and only USD 98 333 5 is advanced If you select True Discounted then the profit is calculated on the principal in a manner differing slightly from the Discounted method The profit
37. ReportFormat PDF v PrinterAt Client v Report Output Print v Printer Specify the following details Product Type Specify product type for which you want to generate the report You can select the required product types from the following e Placement oe ORACLE e Borrowing Product Code Specify product type for which you want to generate the report Coniract Currency Specify the contract currency of the contracts that you need to include in the report Customer Specify the customer number whose contracts you need to include in the report From Value Date Specify the start date of the value date range To Value Date Specify the end date of the value date range Maturity Type Select the maturity type from the drop down list From Maturity Date Specify the start date of the schedule date range To Maturity Date Specify the end date of the schedule date range Contract Status Specify the contract status The system will generate the report based on the contract status Authorization Status Specify the contract authorization status The system will generate the report based on the authorization status Click OK to generate the report 11 12 1 Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads ORACLE Header The Header carries the title of
38. The tax scheme applied Commitment Type The type of commitment Schedule Type The type of the schedule Amortization Type The type of amortization Liquidation Mode The mode of contract liquidation Rollover Allowed Whether rollover is allowed or not Rollover Mode The mode of rollover if allowed Rollover Count The count of rollover Status Control Status control Template Status The status of the template Component The component Currency The currency Rate Type The type of rate applied Code Usage The rate code used Interest Basis The basis of interest Rate Code The rate code Current Rate The current interest rate percentage Current Spread The current spread Flat Amount The flat amount 11 13 Rate Revision Report This report provides the retrieval details of Islamic money market contracts To invoke the Maturity Report screen type MCRPREVN in the field at the top right corner of the Application tool bar and click the adjoining arrow button Lea ORACLE Rate Revision Report Product Type Value Date Borrowing v From Value Date To Value Date Product Code Maturity Type Contract Currency Revision Date From Date To Date Customer ReportFormat PDF PrinterAt Client v Report Output Print v Printer
39. To Account Currency Available Amount Exchange Rate Linked Amou Deposit Account Commitment Uncovered Amount Brokerage Events Profit Settlement Tax mis Change Log Split Effective Profit Rate Holiday Currency Revision Details Advice Code Commodity Tracking Input By Authorized By Contract Cl Authorized Date Time Date Time Status 5 8 Revision and Repayment Schedules In the Contract Schedules screen you can define two types of schedules e Schedules for the revision of profit rates for a deal with floating profit rates aa ORACLE e Schedules for repayment of the various components 5 8 1 Profit Rate Revision Schedule A Floating Rate Table that contains the market rates for the day is maintained in the ICCF sub system so that the latest rates can be applied to deals The market rates vary on a daily basis and are maintained in this table The rates can be applied either every time they change or at periodic intervals Usually for Murabaha Money Market deals floating rates are applied that is the latest market rate is applied see the section on Specifying Rate Code Usage in the chapter Processing Profit Charge and Fee You can also apply these rates on a periodic basis so that you are in tune with the market rates as opposed to fixed profit rates which remain the same for the entire period of the deal and at the same time you do not have to apply the market rates on a daily bas
40. Value Dated Changes function For example the changes in the profit rate increase in the principal and so on can be made only through the Value Dated Changes function A deal on which the previous activity has been saved but not been authorized can be modified For example you have captured the details of a deal The details have been saved but not yet authorized when you realize that some of the details have been wrongly entered You can unlock the contract make the modifications and Save it The uploaded contracts can be amended by any valid user the contract maker or others Any type of change however has to be authorized before it takes effect 4 6 Financial Details that can be Changed Inputs to the following fields can be changed through the contract processing function e Takedown Account if the placement has not yet been initiated and Customer Account if a borrowing has not been initiated e Maturity Account if the deal is yet to mature one ORACLE e Profit Payment Account if the entire profit on the deal has not yet been liquidated The new account will be used for future profit payments e Contract End Date for a notice or call type of deal e Tax details if tax has not yet been liquidated The changes listed do not trigger any accounting entries or the generation of any advices 4 7 Reversing and Rebooking Contracts While reversing and rebooking the parent contract details including the subsystems will be
41. begin the end of day operations When a deal has been rolled over manually you have to do two authorizations e One for the liquidation of the original deal ire ORACLE e Two for the initiation of the new deal When you call such a deal for authorization the details of the liquidation of the original deal will be displayed Gee ORACLE 8 Automatic Processing 8 1 Introduction While discussing the various events in the life cycle of a deal we have referred to the Automatic Contract Update function that carries out these events In this chapter we shall discuss the features of this function The Automatic Contract Update function should executed at least twice during the day once before you begin transaction related activities for the day that is as a part of the beginning of day activities and once after you have finished all the transaction related activities for the day If any transaction related activities are carried out after the function has been run as part of End of Day EOD activities you have to execute it again so that the processing that may be necessitated by the transaction related activity is carried out 8 2 Automatic Events in the Life Cycle of a Deal The following are the various events in the life cycle of a deal that could be carried out automatically They can be grouped into automatic events that take place Beginning of Day BOD and those that take place End of Day EOD 8 2 1 Beginning o
42. by specifying so in this screen Priority Priority applies to payment messages that have to be sent over S W I F T By default such advices will be sent on a Normal priority You can change it to Urgent 4 10 Viewing Event Details You can view all the events that have take place on a finance through the View Events screen You can access this screen by clicking on the view events button in any of the Contract On line screens All the events that have taken place on the deal so far will be listed in this screen according to the sequence in which they have taken place The Date on which the event took place will also be displayed For example this list contains events like Booking Initiation Profit Accrual and so on Event Details Reference Number Events E Event Number Event Date Event Code Description Accounting Entries 4 11 Viewing Accounting Entries for Deal Initiation To view the accounting entries passed for a specific event double click on the event in the View Events screen The accounting entries and overrides for that event will be displayed ia ORACLE View Details Reference Number Event C See Position Entries Accounting Entries E Event Branch Account DriCr Amount Tag Currency Foreign Currency lt Overrides E overrides Authorization Status Authorized By Auth Date Stamp 4 12 Viewing the Different Versions of a Deal W
43. can do the following operations the manual payments function e Input of manual payments e Deletion of manual payments e Reversal of manual payments The manual payments made through this function can be e Scheduled payments which are due e Payments which are made prior to a scheduled payment date These are called Prepayments and they can be made even if the deal has been defined for automatic liquidation of components e Back value dated payments The value date for such payments cannot be earlier than the most recent schedule that was due If there is more than one schedule outstanding and you want to assign the value date of each schedule payment you should enter the liquidation of each schedule separately The value date you have entered will be used for all the entries generated by the system 5 14 1 Input of Manual Payments Once you enter the deal reference number in the Murabaha Money Market Schedule Payment screen you will see the following details displayed on the screen e Counterparty customer code e Currency of the deal e Status of the borrowing e Total outstanding amount as of the value date the date on which the payment is being made and the deal version The Value Date here is the date on which the liquidation entries will be passed When you enter a Value Date in this screen if there are any payments due on that date they will be displayed and you can liquidate them If there are no schedules due on th
44. cannot authorize the deal Click on View Error button to view the details of the errors recorded In this screen system will display the reference number of the deals which could not be authorized and the reason for the failure of deal authorization Errors in Authorization Authorized Errors HEE a Contract Reference Error Messages o el 4 16 3 Viewing the Settlement Details The settlement account details of each deal will be displayed in the Settlement Instructions screen Click on the contract for which you want to view the settlement details and it will be displayed in the Settlement Instructions section For each amount tag the following settlement details are displayed e Settlement account e Currency of the settlement account e Settlement account branch e Payable or Receivable e Ordering Institution oo ORACLE e Ordering Customer e Beneficiary Institution e Ultimate Beneficiary The settlement details for the latest event of the deal will be displayed Settiement Details Reference Number Component Account Details Message Details Parties Parties Cover Parties Other Details Clearing Details Local Clearing AAE IBAN Account Number az Settlement Details Component Currency Branch Account Account Currency Dr Cr Original Exchange Rate Exchange Rate Settlement Direction D Debit Component Description C Credit 4 16 4 V
45. change the mode of liquidation from automatic to manual or vice versa while processing a deal Status control While defining the product you indicate the various status codes for the product for example active past due obligation non accrual basis write off and so on For the product you can specify either manual or automatic change of status When processing a deal you can change the mode of status change from automatic to manual or vice versa 4 4 2 Amortization Type You need to specify the amortization applicable to the contract only if the schedule type is amortization The following are the amortization types you can specify for a contract e Reducing balance e Rule 78 PU ORACLE 4 4 3 Ascertaining Availability of Funds before an Automatic Liquidation When the customer s repayment account is debited automatically by the system you can specify that the availability of funds for liquidation of the various components of the placement has to be ascertained before the liquidation is done This feature is of significance when e The components have the same schedule dates and are serviced by a single repayment account e The funds in the repayment account are insufficient If the availability of funds has to be ascertained e All the components which are due will be liquidated only if funds are available in the repayment account e Incase of insufficient funds a partial liquidation is done to the extent o
46. copied to a new contract and the parent will be reversed and the screen will be in new mode so that any details of the contract can be changed It will be validated that no payment messages have been sent for the Reversed FCC ref no A configurable override will be displayed If the payment messages have been generated then the Cancellation request messages REVSWIFT will be generated At the branch parameters maintenance the check box User Ref No in Messages should be selected The user reference number and the external reference number of the parent contract number will be copied to the new contract Deletion of the new contract will delete the reversal of the parent contract and set the value of user ref number and external ref number in the parent contract from the child contract Authorization of the new contract will authorize the parent contract It will not be possible to delete or authorize the reversal of the parent contract reference number without deleting or authorizing the child The Confirmation message of the parent message will be suppressed if the counterparty of the parent contract and the current contract are the same In case the counterparty of the parent and child are the same then in case the parent contract is confirmed then the child will also be marked as confirmed If the parent is not confirmed then it will be marked as confirmed and the incoming confirmation will be matched with the child contract 4 8 Viewi
47. day of the month you should specify the date as 31 and indicate the frequency If you indicate the frequency as monthly the accruals will be done at the end of every month that is on 31st for months with 31 days on 30th for months with 30 days and on 28th or 29th as the case may be for February pe ORACLE 3 2 1 2 3 2 1 3 If you specify the frequency as quarterly and fix the accrual date as the last day of the month then the accruals will be done on the last day of the month at the end of every quarter It works in a similar fashion for half yearly accrual frequency If you set the accrual frequency as quarterly half yearly or yearly you have to specify the month in which the first accrual has to begin besides the date Example If you specify the frequency as half yearly the start date as 31 and the start month as June the system will accrue profit for the first time on June 30 1997 for the period from January 1 to June 30 1997 and for the second time on December 31 1997 for the period from July 1 1997 to December 31 1997 Specifying Tenor related Details You can set the minimum and maximum tenor limits for a product that you are creating You can also set a default tenor This is the tenor that is normally associated with a deal involving the product However the default tenor applied on a deal can be changed during its processing Example You have a Weekly Borrowing product This product is for borrow
48. during end of day activities the processing will be carried out for e Accrual of ICCF components scheduled for the day e Any Value Dated change additional disbursements change in profit rates and so on that were done during the day with a Value Date as the current system date Bot ORACLE e Activities scheduled for holidays if the current system date is preceded by holiday s and you have specified that activities falling on holidays should be processed on the last working day preceding a holiday If an event scheduled to be automatically carried out is not executed for some reason it will be reported in the Exception Report generated by the function Examples of such events could be the non availability of funds in a payment account non availability of funds in a commitment or a deposit to which a deal is linked and so on The details of an event that could not be initiated along with the reason will be reported in the Exception Report 8 5 3 Processing for Holidays Any automatic event that is scheduled for a holiday will be processed as per your specifications in the Branch Parameters table e f you have specified that processing has to be done on the last working day before a holiday for automatic events that fall due on holidays the events falling on the holiday will be processed during end of day on the last working day before the holiday e f you have specified that processing has to be done only up to the System Date
49. or savings through the Profit and Charges sub system will be applied e f overdraft is not allowed for the account the components will be liquidated to the extent of availability of funds ane ORACLE Placements with payments which have not been processed due to non availability of funds will appear in the Exception Report generated by the Automatic Contract Update function for the day For the final principal payment on maturity the availability of funds in the payment account will always be verified The system will not allow any value dated amendment if the value for this field is Complete Rollover Indicator This option is updated by the system You cannot change it If checked it indicates that the contract has been rolled over 4 5 Modifying a Placement or a Borrowing There are two types of modifications that you can make on a contract e Those that affect the financial details of the contract e Those that do not affect the financial details of the contract Financial details include the accounting entries that have already been passed or the advices that have already been generated For example the changes made to the user reference number auto rollover and auto liquidation fields do not result in changes to the accounting entries that have been passed However the inputs to some fields that contain financial information can be changed only under specific circumstances This is done through the
50. previous year adjustment GL You must ensure that you execute this batch process prior to executing the Year end P and L balance transfer batch The balances pertaining to the unrealized income booked for each contract during the year will be stored at the Contract Component and Status level If a contract spans over multiple years the accrual balances will reflect the total accrual balance for all previous years Example The status of two contracts entered in the System is as follows Contract Ref Number Component Amount accrued after liquidation C1 LDML INT USD 100 C2 LDML INT USD 100 During the next year C1 is liquidated and C2 is not liquidated After liquidation C1 has accrued USD 50 and C2 has accrued USD 100 As a result the details reflected after running the year end data collection batch will be as follows Contract Ref number Component Amt accrued after liquidation C1 LDML INT USD 50 C2 LDML INT USD 200 While liquidating a contract schedule the system liquidates the unrealized accruals for the previous year before liquidating the unrealized accruals for the current year For discounted Murabaha MM contracts the transfer of balance from the unrealized GL to the realized income expense GL is performed only during maturity of the contract 8 14Commodity Upload Oracle FLEXCUBE allows you to upload commodity while performing a commodity tracking operation
51. rate is applied on the Principal instead of the Nominal as it is done in the Discounted method Example In the case of Greenville Global Bank s placement of USD 100 000 at 20 profit for a month under the true discounted type of profit payment the profit calculated on the principal USD 98 333 5 arrived at after deducting 20 profit on the nominal is deducted from the nominal USD 100 000 and USD 98 360 66 is advanced This forms the actual principal of the deal Automatic Liquidation Components of a deal can be liquidated automatically or manually In the Islamic Money Market Preferences screen you have to indicate whether the mode of liquidation of repayment schedules is to be automatic Specify Automatic Liquidation if you want the components of a deal involving this product to be liquidated automatically If you opt for automatic liquidation a schedule will be automatically liquidated on the day it falls due during beginning of day processing by the Automatic Contract Update function The manner in which the automatic schedule liquidation date falling on a holiday will be handled is based on your holiday handling specifications in the Branch Parameters table e f aschedule falls on a holiday it will be processed on the last working day before the holiday during end of day processing if you specified that processing of such schedules has to be done on the last working day before the holiday
52. repayment dates based on these values there is a chance that one or more schedules fall due on a holiday In such a case you have two choices e Ignore the holiday and retain the due date e Move it either backward or forward AR ORACLE If you specify that holidays are to be ignored the schedule dates will be fixed without taking the holidays into account In such a case if a schedule date falls on a holiday the automatic processing of such a schedule is determined by your holiday handling specifications for automatic processes in the Branch Parameters screen In this screen if you have specified e That processing has to be done on the previous working day for automatic events right up to the day before the next working day the schedule falling on the holiday will be liquidated during end of day processing on the previous working day e That processing has to be done only up to the System Date then only the events scheduled for today will be processed The events of the holiday are processed on the next working day during beginning of day processing Example The placement with Greenville Global Bank for USD 100 000 for three months at 16 profit has an profit schedule on October 31 a holiday If you have specified that holidays are to be ignored the schedule date will remain as October 31 when the schedules are fixed The processing of this is determined by your holiday handling specifications in the Branch parameters screen
53. report was generated and the page number Contents of the report Field Description Due Date The schedule due date Overdue Days The number of overdue days Customer The identification of the customer Contract Reference The reference number of the contract Status The status of the contract Component The component Currency The currency in which the mount is displayed Overdue Amount The overdue amount Euro Equivalent The overdue amount in Euro Overdue Summary ny ORACLE Field Description Due Date The due date Overdue Days The number of overdue days Product The MC product code Status The status Comp The component Currency The currency in which the amount is displayed Overdue Amount The amount that is overdue Euro Equivalent The amount in terms of Euro 11 12 Contract Retrieval Report This report provides the retrieval details of Islamic money market contracts To invoke the Maturity Report screen type MCRPRETR in the field at the top right corner of the Application tool bar and click the adjoining arrow button Contract Retrieval Report Product Type Value Date Contract Status Borrowing v From Value Date To Value Date Product Code Maturity Type Authorization Status Unauthorized Contract Currency Maturity Date From Date To Date Customer
54. schedules defined for the deal The attributes that have been defined for the product are inherited by all deals involving the product Some of these attributes can be changed They are e The liquidation of schedules that fall due before the day on which the deal is booked e The liquidation mode auto to manual Through a set of fields in the Contract Preferences screen you can specify the following additional set of schedule related attributes for the deal e How liquidation dates falling on holidays should be handled e Whether schedule dates should be cascaded in case you have indicated that they schedule dates be moved forward or backward in case of a holiday e The holiday table of the country of the deal currency that has to be checked before setting automatic schedules e Whether back valued schedules should be liquidated on deal initiation e Whether in case of a placement the availability funds in the repayment account has to be verified if components have the same schedule date and repayment account and automatic liquidation has been specified i ORACLE The Contract On line screens are available under Islamic Money Market in the Application Browser Contract Online User Reference Reference Number Product Code a Source E Product Description Contract Schedules Rollover Preferences Holiday Treatment for Sc
55. screen white the Prepayment Limit Date is used to pick up the schedules pending as of that date the Value Date is taken into account by the system for passing accounting entries Alternatively the system picks up a schedule according to the amount being paid You will see the next schedule which is due within the limit of this amount If the amount being paid is more than the total amount payable for the next schedule the next schedule will be considered The total amount due for these schedules is displayed Example System date June 1 Payment schedules for a deal are as follows Sch Date June 30 July 31 August 30 Principal 1000 1000 1000 Profit 100 100 100 Commission 50 50 50 Fee 20 20 20 For the above schedule if a prepayment is made as of an amount the system validates it in the following manner Suppose the amount paid is USD 1000 The next available schedule is as of June 30 and the total amount due is USD 1170 This schedule will be picked up for processing and you can make the payments If the amount paid is USD 1170 which is equal to the schedule amount of June 30 again only the schedule for June 30 will be picked up for processing ae ORACLE If the amount paid is USD 1270 which is more than the amount due for the schedule of June 30 the schedule of July 31 will be picked up by the system for processing After completely liquidating the schedule of June 30 you can l
56. the schedule will be done as per your specifications in the Branch Parameters screen You can move the schedule date forward to the next working day which happens to be May 1 In this case the schedule will be liquidated during Beginning of Day BOD processes on this date as it is a working day You can move the schedule date backward In such a case the schedule date will be April 29 the last working day before the holiday The schedule will be liquidated during Beginning of Day BOD processes on this date as it is a working day Move Across Months If you have chosen to move a schedule falling due on a holiday either forward or backward such that it falls due on a working day and it crosses over into another month the schedule date will be moved into the next month only if you so indicate If not the schedule date will be kept in the same month Example Scenario 1 You have defined a profit repayment schedule that falls due on April 30 This happens to be a holiday You have indicated that in case of a holiday the schedule date is to be moved forward to the next working day If you have indicated that the schedule can be moved across months then the schedule will be automatically moved to May 1 that is the next working day in the next month If you have not allowed movement across the month but have indicated forward movement for the same schedule under discussion the schedule date will be automatically moved backward in
57. the details of Islamic money market forward contracts To invoke the Islamic Money Market Forward Contracts Report screen type MCRPFRWD in the field at the top right corner of the Application tool bar and click the adjoining arrow button Hew ORACLE 11 8 1 Islamic Money Market Forward Contracts Report Product Type Placement Borrow E Commitment Report Period From Date To Date ReportFormat PDF PrinterAt Client v Report Output Print v Printer Specify the following details Product Type Specify product type for which you want to generate the report You can select the required product types from the following e Placement e Borrow e Commitment From Date Specify the start date of the report date range To Date Specify the end date of the report date range Click OK to generate the report Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page number i ORACLE Contents of the report Field Description Product Type The MC product type Contract Reference The reference number of the contract
58. the features of the product rollover details screen 7 3 1 Rollover of Profit Charge and Fee Components The profit charge and fee components of the new rolled over deal can be picked up either from the old deal or from the product involving the old deal The following example illustrates this point R ORACLE Example When defining a placement product you specified that all placements involving it will have profit schedules every month and a processing fee Assume you have processed a placement involving this product with the following attributes e Profit payment only on Maturity Date e No fees When rolling over this placement you have two options You can indicate that the profit and fee details specified for the product are to be applied to the new rolled over placement In such a case the new placement will have profit payment schedules every month and a processing fee You can specify that the profit and fee details defined for the placement being rolled over old placement be made applicable to the new one In this case the new placement will have only one profit payment schedule on Maturity Date and will have no fee In addition you have to specify the following details for a product for which rollovers are permitted 7 3 2 Updating Credit Limit Utilization The credit limit utilization is to be updated when a placement is rolled over That is the profit that has been accrued on a placement is also consid
59. the report was generated and the page number Contents of the report Field Description Revision Rate The rate of revision Rate Code The rate code applied Customer The identification of the customer Contract Reference The reference number of the contract Currency The currency of the contract Contract Amount The total amount of the contract Component The component Currency The currency Current Rate The current rate applied Current Spread The current spread 11 25 ORACLE i ORACLE 11 1 ORACLE 12 Screen Glossary 12 1 Function ID List The following table lists the function id and the function description of the screens covered as part of this User Manual Function ID Function Description CSDUAUTH Bulk Authorization Detailed EIDMANPR Mandatory Batch Program Maintenance MCDCONON Islamic Money Market Contract Input MCDCOTRK MC Commodity Tracking MCDPAMNT Islamic Money Market Payment Input MCDPRMNT Islamic Money Market Product Definition MCDREAS Islamic Reassign User Prior to Authorization MCDVAMND Islamic Money Market Value Dated Changes Input MCSCONON Islamic Money Market Contract Summary 12 1 ORACLE ORACLE Islamic Money Market October 2013 Version 12 0 1 14 13 Oracle Financial Services Software Limited Oracle Park Off Western Express Highway Gorega
60. to a particular status and the messages to be generated at each status change wae ORACLE 8 9 3 Automatic Status Change A forward status change is one in which the status changes from one to the next In our example the movement from Active to PDO PDO to NAB and NAB to Write Off are all forward changes A reverse status change is one in which the status changes from one to the previous Such a situation arises when a payment is made on a placement with a status other than Active If you specify that reverse changes have to be carried out automatically the status will be changed when a payment is made on a placement with a status other than Active If you specify that reverse changes should not be automatic the status remains unchanged even if a repayment is made on the placement The status has to be changed by you through the Contract Processing function A reverse change may also become necessary when the number of days of default is increased for a product If you specify that forward changes or reverse changes have to be carried out automatically the status changes will be carried out by the Automatic Contract Update function when it is run either during Beginning of Day processes on the day the change falls due If the day on which the forward or reverse status change is due happens to be a holiday then the processing depends upon your specifications in the Branch Parameters screen e f you have specified that
61. transaction Amendment Date The date of amendment New Maturity Date The new maturity date of the contract Differential The difference in the amount Amount Currency The revolving flag Component The component name New Rate The new rate applicable Old Rate This indicates the old rate New Rate Code The rate code of the new rate 11 14 ORACLE Field Description Old Rate Code The rate code of the old rate New Spread The new spread Old Spread The details of the old spread New Amount This is the new amount Old Amount This indicates the old amount 11 10 Maturity Report This report provides the maturity details of Islamic money market contracts To invoke the Maturity Report screen type MCRPMATR in the field at the top right corner of the Application tool bar and click the adjoining arrow button Maturity Report Selection Criteria Product Type Value Date Liquidation Mode Borrowing From Value Date E Manual To Value Date Product Code Non Maturity Schedule Maturity Type Contract Currency Schedule Date From Date To Date Customer ReportFormat PDF Printer At Client Reno Outout Print ow Printer Specify the following details Product Type Specify product type for which you want to generate the report You can select the required product types f
62. which you can specify e the rollover details in the Rollover Details screen e the default schedules in the Product Default Schedules screen e the order in which you would like to liquidate the various deal components in the Component Liquidation Order screen ate ORACLE 4 Processing a Murabaha MM Deal 4 1 Introduction A product is a specific service that you offer your customers For example amongst other financial services you may offer an overnight borrowing facility to your customers By defining the overnight borrowing facility as a product with certain attributes you can categorize all overnight borrowings which share the attributes defined for the product The other advantage of defining a product is that you can define certain general attributes for a product that will default to all contracts placements or borrowings involving it when you enter into a deal with a customer you enter into a contract Contracts are customer specific Deals contracts inherit the attributes of the product by default This means you will not have to define these general attributes each time you input a deal involving the product These general attributes however can be changed at the time of processing a deal Besides these general attributes which a deal inherits from a product and which can be changed for it there are the specific attributes which you have to define for the deal e the counterparty custome
63. 18 DELETING MANUAL PAYMENTS eaer e E a e E ae E EE E E o E EEEE 5 30 5 19 REVERSING MANUAL PAYMENTS aer re ee E E E E S E e E E ENEAS Earias 5 30 5 20 AUTHORIZING MANUAL PAYMENTS ccccccccccccecececececececececececececececececececececececececececececececececececececececececesecs 5 31 MAKING PROFIT RATE CHANGES eesseseesseceessecesssecssoceesseceesseossccecssoceesseceecsecsssoeessoceesseceesseesssoeessoceesse 6 31 6 1 INTRODUCTION nanna ete a a a a aa ee es 6 31 6 2 NAVIGATING TO THE SCHEDULE DEFINITION SCREEN ccccccccececececececececesececececesecesecesesesesesessseseseeseeeeusnaes 6 3 6 3 SETILEMENT INSTRUCTIONS 2iss cotevsceces vices a cove vactes aces Cote tac a bcos paces iced EE Taan 6 4 6 4 DELETING VALUE DATED CHANGES nna a couea te ceseceadepeas a coteacie ds Wa deadcpnas Sacebsedead coueaSlivcesedeasen 6 5 6 5 UPLOADING THE CONTRACTS FOR AMENDMENT cccccccccesececececesecececececececesececesececesesesecesesessseeesessesessenenees 6 5 6 6 AUTHORIZATION OF CHANGES iii a e a E bees cp seasands So deedeoeaadudesdedead coueabageeseleases 6 7 ROELLING OVER A DEAL iisseiscsscstusccdesusecdssnsacecoavecds udstuns soact csstassussceesoscnde cease o SiS aSa SIOE Soara EEEo asst 7 8 7 1 INTRODUCTION Aana a a ee a a aa a a a A 7 8 7 2 SPECIFYING ROLLOVER FOR A MURABAHA PRODUCT u ccccecececececececececececececececececececececececeeecececececeseceeecess 7 9 7 2 1 Mode of Rollover Manual or Automatic 0 ccccccescesceeseeseees
64. 5 44 MMM Borrowing with Fixed Bearing Profit c cccesccesceseesse essence eeeeseeesecesecesecnaecaeceaecaaeeseeeaeens 10 18 10 6 ENTRIES FOR CONTRACTS LIQUIDATED WITH PREVIOUS YEAR ADJUSTMENT OPTION cccceeeesseeeeeeeee 10 21 10 6 OFFER Offer Acceptance Of OFF EF sccssesccosciesiascusesaiessbestaseainechsetvnscadsaaah goa sesuvecusaasessusnnsnesassasneaueesnrese 10 23 UDTs REPORTS E A A E sents sovsovtesvesouss soaesusesvnsounasooesvsesoasdens O AE TA 11 1 PU INTRODUCTION eeta E eoni eee toesea e eE EEr Oe Ee eean e ea EOE E gute eE aE E EEEo 11 1 11 2 ACCRUAL CONTROL R POR Tiea o eea e e iateunesutes tubs ee ee EEE ee KE OEEO Eee ee SK bee E en EEEE EES 11 1 LL21 Contents Of the Reportero n nit eave ened esd aE eens a ive E E A ET E A ease eed od ees 11 1 11 3 BROKER CONFIRMATION PENDING REPORT ccscssesscseescssecssesecseesscesescssesssesecseesscsessesseeesesesseesseneneney 11 2 LAS Contents OP MEREPOTE ei e a a E pa a is a pak aT eee nS LS ges DRL Ae oo 11 3 11 4 ISLAMIC MONEY MARKET BROKERAGE DETAILS REPORT cscssessesseesessesesesecsseseceesesesseeessseseeeseeseeeney 11 4 T1441 1 COnHIS oftheReport iie Bas on oho e ee cea Ses es et Ae aad evens ew aes Ee sgt 11 5 11 5 ISLAMIC MONEY MARKET PROFIT CALCULATION REPORT csccssesscsseescsseessesecesesscesesessesesssesseesseeeeeney 11 6 LEA Contents Of Ne REPOL arre a ES AES a e aeons E aes PU ES 11 7 11 6 ISLAMIC MONEY MARKET COUNTERPARTY CONFIRMATION PENDI
65. 6 1997 The Activity Journal for the day will report the details of deals that were rolled over automatically during the day If a deal that had to be rolled over with a Maturity Date that came under the purview of either the BOD or the EOD run of the function was not rolled over for some reason it will be reported in the Exception Report for the day The reason for the contract not being rolled over will also be reported in the Exception Report This report is generated every day by the Automatic Contract Update function during its EOD run 7 5 10 Rolling Over a Contract Manually You can roll over a deal manually through the Rollover Details screen If a deal has to be rolled over e The latest activity on the deal has to be authorized e It should be past its Maturity Date e It should not have been liquidated Two activities take place when a deal is rolled over e The original deal is liquidated e Anew deal is initiated However the Reference Number of the renewed or rolled over deal will be the same as that of the old deal 7 5 11 Special Rollover Amount When you roll over a deal you can roll over ere ORACLE e The outstanding principal of the deal e The outstanding principal and the outstanding profit together e An amount that is different from the total of the outstanding principal and the outstanding profit This is a special amount The special amount is e Less than the outstanding principal profit T
66. 7 Rolling Over a Deal 7 1 Introduction A rollover is a renewal of a deal Instead of liquidating a deal on maturity you can roll it over into a new deal The outstanding principal of the old deal is rolled over with or without the profit outstanding on it When a deal is rolled over renewed it is processed in the following manner e The original deal is liquidated e Anew deal is initiated You can rollover a deal that you are processing provided it is allowed for the product the finance involves For a product with rollover defined you can specify if deals involving the product should inherit e The attributes defined for the ICCF components profit charges and fees from the product e Those defined for the initial deal This gains significance if you changed the attributes that the initial deal acquired from the product The rolled over deal will acquire the changed attributes In addition you have to specify the following for a product defined with rollover whether e It is to be rolled over along with outstanding profit e The profit that has been accrued on a placement is to be considered a part of the utilized amount for the purpose of risk tracking if you are rolling over a placement with profit e Tax has to be applied on the rolled over deal e The principal of the rolled over profit should be taxed However when processing a deal you can change the attributes that the deal acquires from the product At the ti
67. Complete 5 20 Authorizing Manual Payments You have to invoke this function from the Application Browser You should enter the Reference number the value date of the payment and the amount paid The payment details are displayed along with the overrides and authorization is sought If you choose not to authorize the manual payment the authorization screen is dismissed 6 Making Profit Rate Changes 6 1 Introduction Any change to the terms of a Murabaha Money Market deal which affects its financial details and the accounting entries can be made through the Value Dated Changes function of Oracle FLEXCUBE Through this function you can make changes to authorized deals on any day before the Maturity Date of the deal The changes to the terms of a deal notified through this function take effect on a date referred to as the Value Date That is why the changes brought about by this function are called Value Dated Changes A Value Date could be e Today e A date in the future e A date in the past Using the Value Dated Changes function you can make changes to the various components of a deal like the profit rate or amount You can also change the Maturity Date and the Credit Line to which the deal is linked In addition to changing the values in certain fields you can enter a value into a field which was not used when you captured the disbursement details For example you may not have specified a fee at the time of dea
68. EE ERa 4 31 4 16 4 Viewing the Details of the Dedal rsrs nersirernenieni niiina ee ei a E ii 4 32 4 17 REASSIGNING THE MURABAHA MM CONTRACT TO ANOTHER USER cccccccesecesecesesececeseseseseseeeesseeseeeees 4 32 5 PROCESSING REPAYMENTS escstvcscdectsescsavsavecsosdcs du csesescdaceacesaseussdossodence chasse edesdecodsessuseceessicedscsdesesseeccedoas 5 1 5 1 INTRODUCTION gassa ea a hi eases een coun eed eke ipte need teh ee bends a egal esoee eens 5 1 5 2 DEFINING SCHEDULES FOR A PRODUCT ccccccccececececesesecesecececscecececesecesececssesesecesscsceceseseseceseseseceeseeuseseaeaes 5 1 5 3 SETTING PRODUCT SCHEDULE PREFERENCES cccccccecececececececececececececececececececececececececececececececececececececececs 5 2 5 3 1 Specifying the Mode of Liquidation inrer e E Ee En E ii 5 3 5 3 2 Liquidating Back Valued Schedules during Initiation cccccscesceesteeseeseceeeceeeceecesecnsecaeeneeeseeeseees 5 4 5 3 3 Specifying the Payment Method 220i co cok sus suceetesss ev eses desis dove ech susp ivan Arse Ee E she E es ave dee echoes 5 4 5 3 4 Indicating th Schedule Types ne wi ths chon e TR EE eU Ae ee a 5 5 5 4 FEATURES OF THE PRODUCT DEFAULT SCHEDULES SCREEN ccccccccccecececesecececececesesececesesesssesesesseeseeseseaes 5 5 5 4 1 Specifying the COMPONENE cse casesseishsedeeecsscavensdsnsbencascdsnasisnsveacsgedonssaneabeede sito sasesbion e Taas iira aani 5 5 5 4 2 Setting the Reference Date ic sscivves
69. ING THE DEAL INPUT SCREENS ccccccccccececececececececesececececececseecececesececacecesscesesasesesesessssseeessessseaeeuses 4 1 4 3 FEATURES OF THE CONTRACT DETAILS SCREEN ccccccccccecccececececececececececesecececececeseceseeesseeseseseseseeseseseeeaes 4 3 4 3 1 Specifying Settlement Details wiv ccscssessicesveecsscssegedscsbuscaseasys sesa is Eost aaee eE Ee EED Ra EEEE EEEE 4 7 4 4 STATING PREFERENCES FOR A DEAL u cccccecececececececececececececececececececececececececececececececececececececececececececececececs 4 13 4 4 1 Handling a Repayment Schedule Date that Falls Due on a Holiday ccccccsccsceeseeeseeseceseenseenes 4 14 4 4 2 Amortization TY Pe sii sacisscscevavecasscteucacanns eaviccusdcevndctaaneeduideecocudnsacactevevisestagesaddebenceduasseceddvacdeonduesnccesouets 4 17 4 4 3 Ascertaining Availability of Funds before an Automatic Liquidation c cccccesccescese ents ene eneeeeees 4 18 4 5 MODIFYING A PLACEMENT OR A BORROWING ccccccccccccccecececececececccesesecesesecesesesesesecesecssesssesessessesseeseeass 4 19 4 6 FINANCIAL DETAILS THAT CAN BE CHANGED ccccccccccececececececesecesesecesecesesecssesesesecesesesesesessesssseseeseeseaass 4 19 4 7 REVERSING AND REBOOKING CONTRACTS cccccccecececesecesecesecccecesecesesesesecesesesssesssesesesesesssesesssesssesseseseseass 4 20 4 8 VIEWING THE OTHER DETAILS OF A DEAL Q ccccccccccecececececececececesecscesesesscecesscecscesesesesssesecssscusesss
70. If you select All Product Codes the system will generate the report for all the products From Date Specify the start date of the report date range To Date Specify the end date of the report date range oe ORACLE From Reference Number Specify the starting reference number in the reference number range to be included in the report To Reference Number Specify the ending reference number in the reference number range to be included in the report Click OK to generate the report 11 7 1 Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page number Contents of the report Field Description Product Code The MC product code Contract Reference The contract reference number Counterparty The counterparty identification Currency The currency of the contract Event Code The event code Event Description The description of the event Event Sequence Number The sequence number of the event Event Date The date of the event ltem Name The name of the item ltem Value The value of the item 11 8lslamic Money Market Forward Contracts Report This report provides
71. Islamic Money Market Oracle FLEXCUBE Universal Banking Release 12 0 1 14 13 October 2013 Oracle Part Number E51465 01 ORACLE FINANCIAL SERVICES Islamic Money Market 1 Table of Contents ABOUT THIS MANUA Lissssscccccssstccsissscesssichansesscossvanscessscedsevessoscuecsdsessoessbssesssvinsdecesbeedesueeestessiasseess cesucessonss 1 1 1 1 TINTRODUCTION 24 bs tice Bee eee este Laine rake T AE E nes Ak he A ait ae ate E T A E hae 1 1 1 2 PNWDIBNGE eect eee ccna be eer te hee ite crt Rake antes bec thee katana ere a 1 1 1 3 ORGANIZATION 2 352 Satin ea fet eB ee oe Ah nie het Res anche he cheated es fee om BR tele tee ee 1 1 1 4 RELATED DOCUMENTS ccccccccccececececececececececececececececesscecesesesecssecesacececscasasscacasasacasaceseseseeeuassuesessueussanaeaes 1 2 1 5 GEOSSARY OBR IGONS 2ecees30h eh 8 ecko ease he hae ieee ii BB i RR Ba 1 2 AN OVERVIEW OF THE MURABAHA MONEY MARKET MODULE ouuuuu ccsssscessscccssseccecssccecees 2 1 2 1 INTRODUCTION vee vcctecde EEEE EET S A TEA ET E S tectended vcenices epevnceddvecnds vectende d vceuccetepsesedeectudedecteuss 2 1 2 1 1 Automatic Deal U plod reren ete othe Hes e ah see se AERO Se epee ES 2 1 2 1 2 Architectural Advanta bes ao ooren Sits eaae E esata sy E eS hs Tedd PaaS Sasa Se PEE ae MNLF 2 1 2 1 3 Quick and Easy Retrieval of Information cccccccceeccescesecesecnsecnsecsecseeeseeeseeeseeseeesecesecesecnsecnaecnaenas 2 1 22 PRODUCT DEFINITION FACILITY
72. LE Reference Number The contract reference number identifies the deal It is automatically generated by the system for each deal It is a combination of the branch code the product code the date on which the deal is booked in Julian format and a running serial number for the booking date The reference number consists of a three digit branch code a four character product code a five digit Julian Date and a four digit serial number The Julian Date has the following format YYDDD Here YY stands for the last two digits of the year and DDD for the number of day s that has have elapsed in the year Example January 31 1998 translates into the Julian Date 98031 Similarly February 5 1998 becomes 98036 in the Julian format Here 036 is arrived at by adding the number of days elapsed in January with those that elapsed in February 31 5 36 User Reference You can enter any reference number for a deal that you enter into The deal will be identified through this number in addition to the contract reference number generated by the system No two deals can have the same user reference number By default the contract reference number generated by the system will be taken as the user reference number You can use this number besides the deal reference number to retrieve information relating to a deal Source You have to indicate the source from which contracts have to be uploaded If this value is left null then you wi
73. NG JOURNAL cccssscseseseseseeseeees 11 8 ILOT Contents of NeReport ik ioe sedis es Bvt cae aes epee is Pat tes ce aep E epea Wes eevee Le sees 11 8 11 7 CONTRACT EVENT DETAILS REPORT vvsciisssceeetvesntdstevevesevveovsoripagustetnen ebrinns REEDE E SE E SREE oetavnen sees 11 9 LEZ A Contents OF MNEREPONE ca ves kes ea ts e N E E Gains ale Daves dae aA eee 11 10 11 8 ISLAMIC MONEY MARKET FORWARD CONTRACTS REPORT c cscssesssesecssesscseessessesssesesssesscsesseeneeseenes 11 10 LAA Contents Of the Report sos cs 5ciadeasccse geass sa sessnesa eases sdsusbestasessba casechescaseadeesavnstbecusaasaesionesuevaseabagsoceatiars 11 11 11 9 ISLAMIC MONEY MARKET FORWARD CHANGES REPORT ccccsscsssssesseesessesssesecseesscesesessecssssesseesseneees 11 13 11 9 1 Contentso f the Report reiia na sade ves tisessnsaasusseecasecss casuchescaseasy EE EE E IE PETETA E EEE ESEE EEA 11 14 11 107 MATURITY REPORT toneis oeenn e a rer EE EE E NEE E TA A Aa EE EEEE 11 15 11 10 1 CONTENTS Of thE REPOTTE soi eniesare aranin srda ipeo eeei Ti ETE EESE IE BETETE ESERE EEE 11 16 11 11 OVERDUE SCHEDULES REPORT ine aterea r ar E E ETE E Ee E Er EEE EEE RR 11 18 11 11 1 CONTENTS Of the Report s 3ocscsinozssessesei daceescasasdngsavesiueta gasses sa sandneeaseandphacedtnodaseseassasusnencassasescasestinecs 11 19 11 127 CONTRACT RETRIEVAL REPORT ms sei anaran E E ee R E NE REE EAEE E RET A a EEE EE E 11 20 11 12 1 Contents Of the Report siseesiespsi
74. NTER_LIQD Debit CUSTOMER INTER_LIQD Credit CUSTOMER PRINCIPAL_LIQD Credit LIABGL PRINCIPAL_LIQD Debit Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 PAYMENT_MESSAGE Payment Message TS ORACLE Accounting Entries Nil Advices Advice Name Description MMAMDADV_ Amendment Advice Accounting Entries 10 5 4 5 VABM Value Dated Amendment Booking 10 5 4 6 VAMI Value Dated Amendment Initiation Accounting Role Amount Tag Dr Cr Indicator LIABGL PRINCIPAL_INCR Credit CUSTOMER PRINCIPAL_INCR Debit Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 Accounting Entries Nil Advices 10 5 4 7 CAMD Amendment Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 4 8 Accounting Entries 10 5 4 9 NOTC Billing notice generation No accounting entries allowed for this event Advices Advice Name Description BILLNOTC Billing Notice 10 20 ORACLE Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 4 10 REVN Rate Revision Accounting Entries No accounting entries allowed for this event Advices Nil 10 5 4 11 ROLL Rollover Accounting entries Accounting Role Amount Tag Dr Cr Indicator CUSTOMER INTER_LI
75. PRINCIPAL LIQD P 000 BNKCUF GB1003 018 GBP 9 1 10 Advice Generated for the Initiation of a Borrowing INITIATION ADVICE FOR A BORROWING Money market borrowing 07 Transaction Date 29 DEC 97 Our Reference No User Reference No TC29 GE1000 GUTSHAUS 37133 RECKERSHAUSEN GERMANY WE CONFIRM HAVING TAKEN FROM YOU Principal Amount 000MB07973630001 Principal Amount 99 999 00 Value Date 29 DEC 97 Maturity Date 28 MAR 98 9 10 D ORACLE Tenor 90 DAYS PROFIT FEE DETAILS Description Amount CCY Rate Profit Basis PROFIT DEM 10 30 Euro Actual Component Value Date Account Amount CCY Component Description Account Branch PROFIT 29 DEC 97 CORCUL GE1000 011 1 436 25 USD Profit Component 000 MMR003 AMT 29 DEC 97 CORCUL GE1000 011 1 000 00 USD Tax amount Tag MMROO3 AMT 000 PRINCIPAL 29 DEC 97 CORCUL GE1000 011 59 041 50 USD Principal Amount 000 OUR PAYMENT SCHEDULE WILL BE AS GIVEN BELOW Component Amount CCY an ORACLE Schedule Date PROFIT PRINCIPAL 28 MAR 98 2 433 00 997999 DEM 00 DEM SETTLEMENT DETAILS Account CCY PROFIT PRINCIPAL PRINCIPAL MMROO3_ AMT 000 R 000 R 000 P 000 CORC CO CO CO RCU UL G i G E1000 011 E1000 011 RCUL E1000 011 RCUL E1000 011
76. QD Credit INTER_PAY INTER_LIQD Debit ASSET GL INTER_ROLL Credit INTER_PAY INTER_ROLL Debit ASSET GL PRINCIPAL_LIQD Debit CUSTOMER PRINCIPAL_LIQD Credit Advices Advice Name Description LD ROLL ADV Rollover advice 10 6 Entries for contracts liquidated with Previous Year Adjustment option You will need to maintain the following accounting entry set up when an MMM contract is liquidated with previous year adjustment option During liquidation of a schedule contract the unrealized accruals for the previous year are liquidated before liquidation of unrealized accruals for the current year 10 21 ORACLE For liquidating the profit components the system posts the following entries during Liquidation LIQD for a bearing contract Accounting Role Amount Tag Dr Cr Indicator ComponentREC Component_LIQD Credit Customer Component_LIQD Debit ComponentUNRL Component_LIQD_PY Debit ComponentINC Component_LIQD_PY Credit ComponentUNRL Component_LIQD_CY Debit ComponentINC Component_LIQD_CY Credit If the profit has been collected in advance the following entries are passed Accounting Role Amount Tag Dr Cr Indicator ComponentUNRL Component_LIQD_PY Debit ComponentINC Component_LIQD_PY Credit ComponentUNRL Component_LIQD_CY Debit ComponentINC Component_LIQD_CY Credit When the Amount Tag is of type component_LIQD_PY and the Accounting R
77. RINCIPAL_ROIN Credit ASSETGL PRINCIPAL_ADDL Debit CUSTOMER PRINCIPAL_ADDL Credit 10 6 ORACLE Advices Advice Name Description MM_CONT_ADV Contract Advice 10 5 1 3 ACCR Profit Accrual Accounting Entries Accounting Role Amount Tag Dr Cr Indicator INTERINC INTER_ACCR Credit INTERRIA INTER_ACCR Debit PENL1INC PENL1_ACCR Credit PENL1REC PENL1_ACCR Debit Advices No advices allowed for this event 10 5 1 4 LIQD Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator PENL1REC PENL1_LIQD Credit CUSTOMER PENL1_LIQD Debit ASSETGL PRINCIPAL_LIQD Credit CUSTOMER PRINCIPAL_LIQD Debit Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 PAYMENT_MESSAGE Payment Message 10 5 1 5 VAMB Value Dated Amendment Booking Accounting Entries Nil a ORACLE Advices Advice Name Description MMAMDADV Amendment Advice 10 5 1 6 VAMI Value Dated Amendment Initiation Accounting Entries Nil Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 1 7 CAMD Contract Amendment Accounting Entries Nil Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 1 8 NOTC Billing Notice Generation Accounting Entries No accounting entri
78. The redefinition of schedules will be done automatically on the following occasions e When the Maturity Date is changed a change in the Maturity Date will be handled in the following manner Extension of the Maturity Date The principal repayment schedule that was defined for the earlier Maturity Date will be moved to the new Maturity Date Other components profit commission or fee that are dependent on the tenor of the deal will be recalculated and spread equally over the rest of the repayment schedules for these components Advancement of the Maturity Date All the schedules that are beyond the new Maturity Date will be advanced to the new Maturity Date The amount of other components profit commission or fee that are dependent on the tenor of the deal will be recalculated and spread equally over the rest of the repayment schedules for these components e When the Principal is increased the increased amount is added on to the last principal schedule Other components profit commission or fee that are dependent on the principal of the deal will be recalculated and spread equally over the rest of the repayment schedules e When there is a prepayment of profit and you have defined recalculation of schedules on repayment ve ORACLE There may be some situations wherein you would want to redefine the schedules that is you may want to change the payment dates or amounts In such cases you can change the schedules by invokin
79. ULATION METHOD Actual 365 AMOUNT 12 000 000 00 AUD THE BROKERAGE INFORMATION DETAILED BELOW VALUE DATE 29 DEC 97 METHOD ADVANCE AMOUNT 25 000 00 USD CI WE REQUEST YOU TO ACKNOWLEDGE THE CONTRACT ON THE DUPLICAT AUTHORIZED SIGNATORY 9 1 8 Advice Generated for the Roll Over of a Placement T ROLLOVER ADVICE FOR A PLACEMENT MM PLACEMENT 04 Transaction Date 01 JAN 98 Our Reference No 0003P04983630002 User Reference No 2 TCs US1009 516 W 34 St ORACLE New York NY 10001 T THE CONTRACT HAS B EN ROLLED OVER WITH FOLLOWING DETAILS Principal Amount Old Principal Amount 12 000 000 00 AUD Principal Amount 12 000 000 00 AUD Value Date a 01 JAN 98 Maturity Date 04 JAN 98 Tenor 3 DAYS PROFIT FEE DETAILS Description Amount CCY Rate Profit Basis PROFIT AUD 13 23 Actual 365 SUBJECT TO CHANG Transaction on Initiation Component Value Date Account Amount CCY a ORACLE Component Description Account Branch PROFIT O1 JAN 98 BNKCUL US1009 017 8 TIB 15 USD MM INT PLACEMENTS 000 YOUR PAYMENT SCHEDULE WILL BE AS GIVEN BELOW Component Amount CCY Schedule Date 04 JAN 98 PROFIT 13 315 50 AUD PRINCIPAL 12 000 000 00 AUD SETTLEMENT DETAILS
80. USD 100 000 is advanced to Greenville Global Bank and the profit on it is collected over the one month which is the tenor of the placement If the payment method defined is Discounted then the profit is deducted at the time of initiating the deal Example You have made a placement of USD 100 000 at 20 profit for a month for Greenville Global Bank Under the discounted type of profit payment the total profit calculated for the tenor of the deal that is one month USD 1 666 5 is deducted from the principal USD 100 000 and only USD 98 333 5 is advanced If the payment method defined is True Discounted then the profit is calculated on the principal of the deal and not on the nominal All the same like the discounted method here too it is deducted from the principal at the time of initiation of the deal Example You have made a placement of USD 100 000 at 20 profit for a month for Greenville Global Bank Under the true discounted type of profit payment the profit calculated on the principal USD 98 333 5 arrived at after deducting 20 profit on the nominal is deducted from the nominal USD 100 000 and USD 98 361 2 is advanced This forms the actual principal of the deal Maturity Type The Maturity Type you have specified for the product is displayed by default in the screen However you can change it to one of the following Fixed The deal has a fixed Maturity Date This date should be specified in the
81. a day before the schedule date However payment will not be allowed if the Rollover Instruction Status for the contract is Complete oe ORACLE 5 13Invoking the Contract Schedule Payments Screen You can invoke Islamic Money Market Payment Input screen by typing MCDPAMNT in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button The screen is displayed below Money Market Payment Contract Reference Outstanding Amount Outstanding Balance Syndication Reference Prepayment Amortized Recomputation Basis Prepayment Effective From Value Date Limit Date Discount Rate Populate Payment Breakup Counterparty Status Currency Effective From Old Maturity Date New Maturity Date Total Paid Amount Prepaid Limit Amount Liquidated Nominal Allocst Local Currency Equivalent Local Currency Equivalent Local Currency Equivalent Local Currency Equivalent Sum ol L Prepayment Component Rate Adjustment Amount Payment Remarks Prepayment Component Amount Adjusted Amount 5 22 ORACLE 5 14Features of the Contract Schedule Payments Screen You
82. advice gives details of the deal 9 1 2 Rollover Advice for a Placement You can generate this advice to notify the customer about the Roll over of the placement 9 1 3 Rollover Advice for a Borrowing You can generate this advice to notify the customer about the Roll over of the borrowing 9 1 4 Initiation Advice for a Borrowing You can generate this advice on the initiation of a borrowing to inform the customer about the details of the contract borrowing 9 1 5 Initiation Advice for a Placement You can generate this advice on the initiation of a borrowing to inform the customer about the details of the contract placement m ORACLE 9 1 6 Liquidation Advice for a Placement You can generate this advice to inform the customer when a payment is due The format of the generated advices varies depending upon the data entered The sample advices for each of these are given in the following sections 9 1 7 Advices Generated During Contract Confirmation MONEY MARKET FINANCE CONTRACT CONFIRMATION ADVIC Date 29 DEC 97 Reference Number 0003P05973630002 From MAIN BRANCH BOMBAY D N ROAD FORT BOMBAY 400 001 INDIA To CITIBANK Moscow 39 Sadavo Spasskaya Street Moscow 107078 CIF CONFIRM THAT A MM PLACEMENT 05 HAS BEEN ACCEPTED AS PER THE DETAILED BELOW BOOKING DATE 29 DEC 97 VALUE DATE 01 JAN 98 9 2 Gl ORACLE
83. aecnaecaaeeaeeeaeeeeeseeeeneenaees 7 18 ZALI Special Rollover AMOUNT 3 cs cscscasicnivesvengsacts esas ceeobseteabe sen vos Lave suydedaseobaeibededeadtvessesdisseacetsvenbssceeteny 7 18 7 93 42 Specifying the Maturity Ty pees ios ccsslevesssicissensecceoesetavteviovviooyovia suyseveeeobeeitebetdentvenseadiescaseessunassdeeveds 7 19 7 6 PROCESSING OF ROLLED OVER MM CONTRACT cccccsseessesesssesscseeesessesesssecssessceessesseessssessuesscsesseneeeese 7 20 7 7 ROLLING OVER A DEAL MANUALLY ccccccesecesesscsecesenseeesesecesesscsesssessesssseecesesscsesesesssessseeseuessseesereneseese 7 20 7 8 ADVICES FOR A ROLLED OVER DEAL cccecessssesscssessesseeesesesesesscsesesessesssseeceussscsesssessseesssessuessssessseseseese 7 21 7 9 AUTHORIZING A MANUAL ROLLOVER cccescssesscsseesesseeecesecssesscsesssessesessaesseesscsesssesssesssaeseuesscsessseneesese 7 21 AUTOMATIC PROCESSING sscssssssssssssssnsscssssssescssenessssnssscssssssssssnesessnessessessossessnssessnesssssessessessosees 8 1 8 1 INTRODUCTION 26 s cnts cs sss axes svceeiet E E E E es oe Sty EE EE E Neen ctvenedev een to ponte states 8 1 8 2 AUTOMATIC EVENTS IN THE LIFE CYCLE OF A DEAL 0 cccceseceesscseeescsseeesesecesessesesesessenssesesssesssseseeeneseess 8 1 6 2 1 Beginning Of Day Processes svssicsscsissssusscvnstssessensasedeee case sips cesechiogsdsaabee SasedoueSaseauzeticarbuecasedbagsuceaneedaseus 8 1 8 2 2 End of Day PHOCESSOS cssessadiasieiass isis
84. ai esea TE 7 13 7 5 FEATURES OF THE CONTRACT ROLLOVER SCREEN c cssccccesesssesscsssesessesssesesesessceessesseeesssessuesscseseseneesese 7 14 7 5 1 Specifying Rollover Details of Profit Charge and Fee ccccccccsccesscesscesecesecnseeneeeseeeseeesseseeeseensees 7 14 7 5 2 Updating Credit Limit Utilization ccccccecceeceecseeccesecesecesecusecsecaeecasecseesseesseeseeeseeseeesecnsecnaeseaenae 7 15 7 5 3 Applying TOK 22 toy ceca tetany E E A E og sale esbes A ATEC say os dgeucheateavebvedevespoets SNA ESOR 7 15 7 5 4 Indicating the Rollover Tenor s csccscccsscssseesessseescesscesscusecusecusecsecaaecsaecseecseesseseseeseeeeeeeaeenseseaeenaeenas 7 15 7 5 5 Specifying the Rollover Mechanisa s escccsccesccssecsseeseesseeseeeecesecesecesecusecsecuaecaaecaaeeseesseeeaeeneeeneeenees 7 16 7 5 6 Capturing the Rollover Method 0 cscccsccsscsseesseeseeeeceeseeeeeeecesecaecuaecusecaaecseeeseesaseseeeeeeeeenseenaesnaeeaas 7 16 7 5 7 Rolling Over a Deal with Profit or without Profit c ccccsccescesecsseesseeneeeseeeeeeeeeeseeeeeceseenseensecnaesaas 7 16 7 5 8 Deduct Tax on Rollover si cscccsecsiscseciscinssesatetunconstnstsadaedenensvieaesosisscacante cabceddeveedasdveancedva cesseetuusneaatedens 7 17 7 5 9 Automatic Rollover of a Contract ccccccccceesceescesscesecesecusecosecssecseeeseeeaeeeseeecesecsecnsecaessaecaaeeseeeaeees 7 17 7 5 10 Rolling Over a Contract Manually u cccesccesccescssecsseenceeneesseesseesecesecesecesecaeca
85. al involves a product for which the re key fields assigned are deal amount currency and rate of profit Now Mr Atkins makes a mistake and enters the deal amount as 10M USD When Mr Jeffrey Hunt who has rights to authorize the deal selects the deal for authorization and specifies deal amount profit rate and currency as 1M 20 and USD respectively based on the deal document the deal details will not be displayed The deal details will not be displayed if e Value entered at the time of authorization is different from that entered at the time of deal processing or e An erroneous value is entered at the time of authorization Now if Mr Trevor Atkins inputs the deal currency as GBP instead of USD or the profit as 21 instead of 20 even then Mr Jeffrey Hunt would be denied access to the deal when he attempts to access it by entering the correct data in the re key fields When this happens Mr Hunt can inform Mr Atkins of the mistake and have it rectified It could also be that Mr Atkins has correctly captured the principal of the deal as 1M and the authorizer Mr Hunt makes an error while entering the re key value Assume Mr Hunt enters the value as 10M In such a case also the details of the deal will not be displayed for authorization You can specify any or all of the following as re key fields e Currency e Value Date ue ORACLE e Contract Amount e Maturity Date 3 2 1 5 Prioritizing the Liquidation of Components
86. alf yearly indicated the month as June and given the date as 31 For a deal that is initiated anytime in before June the first liquidation will take place on June 30and the next one on December 31 For a deal initiated after June 30 the first liquidation will take place on December 31 and so on The start month and date are indicators to the first schedule so that the schedules that follow can be automatically set from that point on A schedule date e Should be later than or the same as the Value Date e It cannot be beyond the Maturity Date a ORACLE 5 5 Defining Repayment Schedules The payment schedules defined for a Murabaha product will apply to all deals involving the product When you process a deal in the Contract Schedules screen the details defined for the product which the deal involves will be displayed You can change the schedules that a deal acquires when processing it in the Contract Schedules screen You can redo the schedules defined for the product by clicking Schedules button in this screen The schedules that have not been liquidated and which fall due on the current system date or later than the current system date will be erased and you can go on to define the new repayment schedules The attributes of the schedules inherited from the product can be changed for a deal through the Contract Preferences screen 5 6 Setting Deal Schedule Preferences Schedule preferences are the attributes of the repayment
87. at date the schedule becomes a prepayment But this is only if the Value Date is not a back valued date You can have a back valued date but it cannot be earlier than the last schedule that was due You can also liquidate back valued schedules by entering a Limit amount If the Value Date is today or a date in the future the prepayment is processed ae ORACLE The Payment Limit Date or Amount of the payment should be given at the time of payment If you have given a payment limit date the system shows all the components which are due till the limit date If you have given the amount limit in the Amount field it shows all the schedules for the limit amount Example Say for a particular deal there are two profit schedules pending on Cavillieri and Barrett Finance Corporation s borrowing one on October 1 1997 and the other on October 15 1997 The third schedule is due on October 30 1997 If you give the Limit date as October 25 today s date the system will show you the amounts due for the profit component on the schedule dates of 1 October and October 15 If you give the limit date as November 1 1997 the system will show you the schedules falling on October 1 October 15 and October 30 and you can liquidate them accordingly Since today s date is October 25 if you liquidate the schedule due on October 30 it amounts to a pre payment You can charge a prepayment compensation rate or an amount which you enter in this
88. at it involves An initiation date in the past or today can be indicated for any deal we ORACLE When a deal with a Value Date in the future is stored no accounting entries will be passed on the date of input The deal will be initiated by the Automatic Contract Update function during the Beginning of Day BOD processes on the Value Date initiation date All the necessary accounting entries will be passed on this date However if the Value Date falls on a holiday the deal will be initiated as per your holiday handling specifications in the Branch Parameters screen e f you have specified that automatic processes are to be carried out for holidays the deal slated for initiation on the holiday will be initiated during end of day processing on the last working day before the holiday e f you have specified that the automatic processes are to be carried out only till System Date today s date the deal slated for initiation on the holiday will be initiated on the next working day immediately after the holiday during beginning of day processing Allow Rollover You should specify whether a deal involving the product you are defining can be rolled over into a new deal if it is not liquidated on its Maturity Date If you specify that rollover is allowed for the product it will be applicable to all the deals involving the product However at the time of processing a specific deal involving this product you can indicate that rollov
89. ate Units Quantity Purchase Price Purchase Unit Price Sale Price Sale Unit Price Location Counterparty Payment Instruction Title Guarantee Reference laz Input By Authorized By Date Time Date Time a ORACLE In this screen by default the following fields are displayed e Contract reference number the contract for which you have to specify the commodity details e Counterparty e Event sequence number e Operation When you unlock a contract this field is populated based on the contract type and the commodity tracking status For instance for the contract type Placement if the commodity tracking status is Waiting for Offer then this field is populated as Offer Acceptance and if the commodity tracking status is Offer Received and Accepted then it is populated as Closure Similarly for the contract type Borrow if the commodity tracking status is Offer to be sent this field is populated as Sending Offer and if the commodity tracking status is Offer Sent this will be populated as Closure You will not be allowed to change the above details Goods Description You can describe the goods commodity being bought You cannot modify this information if the Commodity Tracking Status is Closure Global Agreement Reference Specify the agreement reference number associated with the transaction Global Agreement Date Specify the date
90. ated during beginning of day when an automatic status change happens 8 10 Accrual of ICCF Components When you are defining the profit commission charge or fee components ICCF components for a Murabaha MM product you should also specify whether accruals have to be done for the accruable ICCF components You can specify this through the Product ICCF Details screen If accruals should be done the frequency of accrual should also be specified for the product through the Product Preferences screen at the time of product definition For all deals for which accruals fall due today the Automatic Contract Update function will pass the accrual entries Accrual of profit commission charge or fee is done during the end of day processing of the Automatic Contract Update function In some cases for example if a manual liquidation is done the accrual entries will be passed immediately by the system If this falls on a holiday the accruals will be done as per your holiday handling specifications for automatic processes in the Branch Parameters screen e f you specified that processing has to be done today the last working day before the holiday for automatic events right up to the day before the next working day the events falling on the holiday will be processed during end of day on the last working day before the holiday e f you have specified that processing has to be done only up to the System Date today then only the events sch
91. ay the schedule falling on the holiday will be liquidated during end of day processing on the last working day before the holiday e f you specified that processing has to be done only up to the System Date today then only the events scheduled for today the last working day before the holiday will be processed The events falling on the holiday will be processed on the working day immediately following the holiday during beginning of day processing If a placement has been defined for verification of funds before automatic liquidation the components for which the schedule dates fall on the same day will be liquidated in the order that you specified while defining the product If the funds are insufficient the liquidation will be done to the extent of the available balance in the repayment account again following the order of liquidation of components specified by you If this is so it will be reported in the Exception Report generated at the end of every day automatically by the Automatic Contract Update function If you have not specified that the funds are to be verified and the funds are insufficient e The repayment account will be put into a debit balance if an overdraft is allowed and the schedules for the components will be liquidated to the extent of the debit balance allowed If it crosses the extent of debit balance allowed the liquidation will be done with an overdraft override that is automatically recorded The debit
92. be defined say PROFIT1 Check the Rev box Revision box to indicate that it is a rate revision schedule Then instead of specifying the other schedule details like the frequency the number and unit indicate the date in the Start Date field The rate revision will be done on that date ae ORACLE Example A borrowing of USD 200 000 by Cavillieri and Barrett Finance Corporation has been initiated on December 10 1997 and is to be repaid at Maturity on December 16 1997 It has been defined with rate revisions and they are to be performed on the following dates e December 12 1997 e December 14 1997 e December 16 1997 Select the component INT1 indicate rate revision by checking the Rev box and give the date in the Start Date field as December 12 Then select the same component INT1 and specify the date as December 14 Repeat the process for the same component for December 16 The rates applicable on the specified dates will be applied on the borrowing at the time of calculating profit 5 8 2 2 Repayment Schedule For a repayment schedule the amount of repayment needs to be specified only for the Principal The profit commission and fee components will be calculated by the system automatically depending on the repayment date and amount of the principal However if the profit type is Special you should specify the profit amount Similarly if the deal has been defined with any other fixed amount component you will have to en
93. be sent to the customer indicating the same for parent contract If the amount on the child contract is greater that that of the parent contract for a placement contract then the difference in the amounts will be debited from the customer account and a payment message will be sent to the customer indicating the same for the child contract In the MM confirmation message field 23 of the message will be populated as ROLL for the Child Contract 7 7 Rolling Over a Deal Manually You can roll over a deal manually through the Rollover Details screen If a deal has to be rolled over PN ORACLE e The latest activity on the deal has to be authorized e It should be past its Maturity Date e It should not have been liquidated Choose Rollover from the Processing sub menu of the Application toolbar when the deal you want to rollover is highlighted in the Contract Summary screen or Contract Detailed screen By default the deal will be rolled over with the same terms as the original deal However you can change certain terms through the Rollover Details Screen e You can apply on the renewed deal the profit charge and fee applicable to the product of the old deal or if these have been changed for the old deal you have the choice of applying the changed terms for ICCF components only of the old deal to the rolled over deal e You can change the Maturity Type fixed call or notice the Maturity Date and in case of a notice type o
94. casisseisksesieecs saves sdsnsbuscascsengsdandvuecaceuaes SE rE EEE TEE Ear EEEE 5 6 5 4 3 Specifying the Frequency Of Schedules scccsscsssesscesscesecesecesecssecnsecnaecnasensveseesscesseeseeesecsseenseenaeonas 5 6 5 4 4 Specifying the Frequency Unit siirsin iont sensere ebe isaret ea senses Seri rE PEE EEE TEES Eara Eia S 5 7 5 4 5 Specifying the Start Date iieiea seniai aerer sebe aaea TERE SEEE E PE E EER TETEE E rE EE EES 5 7 5 5 DEFINING REPAYMENT SCHEDULES ccccccccececececececececececesscesecececececesecesscscesececeseceseceseseseueuauesesausueusesuaeaes 5 8 5 6 SETTING DEAL SCHEDULE PREFERENCES ccccccesecececececececececececececececececececececececececececececececececececececeeesecesess 5 8 5 6 2 Liquidating Back Valued Schedules ccccccsccssscesscesscesecssecuseesseeseeeseesseeseeessceecesecaecaecaeenaesseeeaeees 5 9 5 7 INVOKING THE CONTRACT SCHEDULES SCREEN cccccccccccececececececesececececesesesececesesececessceseseusesesuseeseuseeuaes 5 14 5 8 REVISION AND REPAYMENT SCHEDULES ccccccccececececececececesececececececececesececesscecececeessaceseseussaesessseseanenaes 5 14 5 8 1 Profit Rate Revision SChedule i ccs csscgssscsvcscasoisedissestesca ieser pinsos kiese T a as 5 15 5 8 2 Specifying the Rate Revision Frequency ssseeseeeseseseeresreerrrressererresesrrerrsresrssrerresesereresreereseee 5 15 5 9 REDEFINING SCHEDULES A a a A a a T I A a Noi 5 19 5 9 1 Authorizing a Redefined Schedule
95. d of the parent contract with the contract amount of the child contract When a child contract is reversed without the linked parent being rolled over the system will trigger the RAMC event on the parent and the Rollover Instruction Status will be updated as Incomplete Rollover of a contract will be allowed only if the Rollover Instruction Status is Complete If the parent contract has already been rolled over and the child contract has been reversed then the system will trigger the REVC event on the child contract As a result the child contract will be reversed successfully However since the parent contract has been rolled over it will not be impacted by the reversal of the child contract You can view details of the ROLL event in the Payments screen where you can manually reverse the contract This will in turn trigger the REVP event which will update the Rollover Instruction Status of the contract as Incomplete Note the following e A rollover child cannot be linked to a parent contract for which the Rollover Instruction Status is Complete e Amendment and reversal of a parent contract will not be allowed if the Rollover Instruction Status of the contract is Complete If the amount on the child contract is less that that of the parent contract for a placement contract then the difference in the amounts will be credited to the customer account and a receive notice will
96. d under a specific group The different groups are defined in the Product Group Definition table Select a Group ID from the option list The product will belong to this group Product Group Description A brief description of the product group is displayed here Start Date A product is set up to be used over a particular period The Start Date for this product is specified in this field The Value Date initiation date of a deal involving this product should be e The same as or later than this date and e The same as or earlier than the End Date End Date Specify the End Date for the product The Value Date initiation date of a deal involving this product should be the same as or earlier than the End Date If you do not specify an End Date the product can be used till it is closed The start and end dates of a product come in handy when you are defining a product for a scheme which is open for a specific period Remarks Click Free Format Text button Provide information about the product intended for your bank s internal reference This information will not be printed on any correspondence with the customer Click OK after you enter the information The remarks are displayed when the details of the deal are displayed or printed 3 1 2 Specifying the Product Type A product that you are defining can belong to any of the following categories e Placement e Borrowing These product categories are referred to as
97. defined with a definite frequency If you have indicated that schedules should be cascaded the schedule date for the next payable schedule will depend on how the schedule date was moved for a holiday The following example illustrates how this concept of cascading schedules functions Example A monthly schedule has been defined with backward movement and a schedule date falling due on April 30 was moved to April 29 April 30 being a holiday The schedule date for May depends on whether you have chosen to cascade schedules If you have the schedule date for May will be set as May 29 as the frequency has been specified as monthly For the subsequent schedules also May 29 will be considered the last schedule date If you have not specified that schedules have to be cascaded the date originally specified will be the date for drawing up the schedules Even if the April month end schedule has been moved to April 29 the next schedule will remain on May 30 When you cascade schedules the last schedule at maturity however will be kept for the Maturity Date and will not be changed like the interim schedules Hence for this particular schedule the profit days may vary from that of the previous schedules Liquidation When setting up a product you specify the mode of liquidation whether automatic or manual for the different components of a deal By default all deals involving the product will inherit this definition However you can
98. dules If you indicate that funds have to be verified the components that will leave the repayment account with a debit balance will not be liquidated If not all the components will be liquidated leaving the repayment account with a debit balance if a debit balance has been allowed for the repayment account The payment schedule will be marked as liquidated If a debit Aa ORACLE balance has not been allowed the schedules will not be liquidated and aging analysis will take over e Ignoring holidays If you choose this preference the schedule dates will be calculated ignoring the holiday The automatic processing of the schedule that falls due on a holiday however will be determined by your holiday specifications for the product If you indicated for example that the processing should be done till the day before the next working day the schedule will be liquidated during the end of day run of the Automatic Contract Update function If you specified though that processing should be done only till the System Date then the schedule falling on the holiday will be processed during the beginning of day run of the Automatic Contract Update function on the next working day e Choosing to ignore holidays If you choose not to ignore holidays you can move a repayment schedule forward or backward to the next or previous working day You can also specify whether the schedule is allowed to move across the month in case of a holiday e Cascading
99. dvesto tena eera eaea ea a a aai o ape an OETA ENE IO Ees po ESET 2 2 2 2 1 Defining Murabaha Money Market Schemes as Products 1 1cccsccsscesssessseseceeecesecesecnsecnseceeeseeeneees 2 2 2 2 2 Advantage of Defining a Product c scccscssceesseseesecessceecusecesecasecssecaeecseeeaeesseeseeseeesseeeaeesesnaecnaeenae 2 3 2 3 AUTOMATIC PROCESSING FEATURES csssssscsccecsessssececececsessaaececececeensasececececeeseseaecececseseuaaeeeceeeesensaaeeeeees 2 3 2 4 SETTLING MURABAHA MONEY MARKET DEALS ccccccecesececececececececececececececececececececececececececececececececececess 2 4 2 5 ROLEING OVER DI EYAN EEEE E ETNE E ATE ETA E E E deescntee vacedote devetnds E EN E E A 2 4 2 6 TRACKING AND RETRIEVAL OF INFORMATION cccccccccsececececececececececececececesecececesacesececssesessesseuessususeseseanaes 2 4 DEFINING THE ATTRIBUTES OF A MURABAHA MONEY MARKET PRODUCT ssseceeee 3 1 3 1 INTRODUCTION bo osc EEE E EE EE bees gu node EAE E payee ode wah deg delet ceeduedea bevastenrcse 3 1 3 1 1 Defining a Money Market Producct siii asec csssesce ti einni iinne n E sE 3 2 3 1 2 Specifying the Product Typ sisisi asore cokes orina vases Ea EE EE EEI EEEE E NEEE 3 3 3 2 SETTING PRODUCT PREFERENCES e a a e e ee E a O E E s E aos 3 3 PROCESSING A MURABAHA MM DEAL cccsssssssssssccssssccccssscccscssscccssssccccssccccscssceccssacecessssececssceecess 4 1 4 1 Not S303 BB E E ETE AE EE er E A E E E ENE 4 1 4 2 INVOK
100. e Whether the messages associated with authorization should be generated On authorization of a contract the messages associated with the deal will be generated To generate the messages check against Generate Messages 4 16 1 Authorizing the Deals You can either opt to authorize all the deal that are displayed or choose only certain contracts for authorization e To authorize only specific deals check against the boxes positioned before each deal reference number e If all the deals that are displayed have to be authorized check against the box positioned before Contract Ref No Unauthorized Contracts Module v C ignore Overrides C Generate Messages Fetch Unauthorized Contracts E Contract Reference User Reference Counterparty Customer Name Short Name lt Settlement Details E Amount Tag Tag Currency Branch Account Pay Receive Intermediary Reimbursement Institution Authorize an ORACLE After selecting the deals click Authorize button to authorize the deals 4 16 2 Viewing the Errors If the system encounters any errors during the authorization of a particular deal it will record the error and move on to the next contract Example Among the deals selected for authorization there may be certain deals which are created by the user who is authorizing As the maker and checker cannot be same system will record an error as it
101. e a profit schedule of USD 200 is liquidated Accrual Level To recall at the time of creating a product you specify e whether accrual of profit is allowed for the product e the accounting entries that should be passed for the accrual event aa ORACLE e the frequency at which the accrual entries should be passed A Murabaha MM deal will inherit the accrual frequency defined for the product associated with it Since the accounts the accrual account and the income account are defined for a product the accrual entries for all deals involving the product will be passed to the same accounts These entries can be passed in two ways e An entry for each deal The same accrual and income account will be involved for each entry with the Reference Number of the deal indicated for each deal e A single consolidated entry for all deals involving a product Since the same accrual and income account will be involved in all accrual entries a single consolidated entry will be passed with a unique reference number generated for each product The idea of generating a single entry for all deals involving a product is to reduce the number of entries and thus the processing time The details of entries passed for each deal will be available in the Accrual Control Journal a report that should be generated after the accruals have been made Whether profit accrual entries are passed as a single consolidated entry for a product or as an individual en
102. e cas esdegsavessuets ipeo eeei TEP ETE EUSE EPET E eE EEEE REE 11 21 11 13 RATEREVISION REPORT seinere EE EEE N ETA A a EEE EEEE 11 23 11 13 1 CONTENTS OF the Report is cscs neceseseescise ties casassnesbscsu vets casses o esra ERE E PESE EE E CEEE ERO TEREE 11 25 12 SCREEN GLOSSARY csssssssrssssressssssrsessssersnsessesenssscesenseseesensesseseneesessensssessenesseesesesseseenessesessessesess 12 1 121s FUNCTION ID LIST nnen a oss aa ees ba vs oS a ou a RAS aes so ei ES 12 1 1 About this Manual 1 1 Introduction This manual is designed to help you quickly get acquainted with the Murabaha Money Market MMM Module of Oracle FLEXCUBE It provides an overview to the module and takes you through the various steps involved in processing an MMM deal You can further obtain information specific to a particular field by placing the cursor on the relevant field and striking lt F1 gt on the keyboard 1 2 Audience This manual is intended for the following User User Roles Role Function Back office clerk Input functions for contracts Back office managers officers Authorization functions Product Managers Product definition and authorization End of day operators Processing during end of day beginning of day Financial Controller Product Managers Generation of reports 1 3 Organization This manual is organized into the following chapters Chapter 1 An Overview of the Murabaha M
103. e from this date onwards The system defaults to today s date You can enter a Value Date of your choice here The date that you enter can be any one of the following e Today s date e A date in the past e A date in the future you can enter a date in the future only if Future Dating has been allowed for the product The Value Date should not be earlier than the Start Date or later than the End Date defined for the product involved in the deal In case of a child rolled over contract this value will be the same as the maturity date of the parent contract If the liquidation date for any component falls before today s date the liquidation entries as defined by you for the product will be passed if you have so specified for the product If the Maturity Date of a deal is earlier than today maturity entries will also be passed Once the deal details have been stored and authorized this date can be amended only if the deposit has bearing type of profit and NO schedule has been liquidated Modification to this field will be considered as a financial amendment An override will be sought if the Value Date falls on a holiday in the country of the deal currency Original Start Date For a deal that has been rolled over this is the date on which the deal was originally initiated If a deal has been rolled over more than once this will be the date on which the first deal was initiated If you are entering a deal that has already been
104. e outstanding profit If you roll it over without profit the new principal will be USD 100 000 The accrued profit on this placement should be liquidated The placement will be rolled over ONLY if the profit can be liquidated If you roll the old placement over renew it along with the unpaid profit the principal of this renewed placement will be USD 11 1670 USD 100 000 USD 11 670 as of December 31 1997 The profit on the new placement will be applied on a principal of USD 1 11670 7 3 6 Liquidating Tax on Principal upon Rollover When a deal is initiated tax is applied on the principal of the deal Now when this deal is rolled over or renewed you have two choices depending on the tax laws of your Government e Apply tax on the principal outstanding principal outstanding profit or only the outstanding principal depending on your specifications of the new deal e Since the principal of the old deal has already been taxed once you can choose to waive the tax on the principal of the rolled over deal However if this principal has the outstanding profit from the old deal incorporated then only this portion will be taxed This option applies only to tax on principal and not to tax on profit te ORACLE This field assumes importance only if e Tax for principal as well as profit has not been waived on the old deal e Tax has not been waived on the rolled over deal If this tax is not waived for the old deal it will be ap
105. e product involved in the deal will be displayed It can be one of the following e Fixed a fixed profit rate e Floating rate an profit rate that changes periodically or automatically as per your specifications in the Floating Rate Table a ORACLE e Special an amount instead of a rate Floating Rate Code If a Floating Rate Code has been specified for the product involving this deal it will be displayed in the screen You can change it to suit the needs of this specific deal Spread For a deal with a floating profit rate you can specify the Spread that you want to apply over the rate maintained in the Floating Rates table This Spread should be greater than or equal to the Minimum Spread and less than or equal to the Maximum Spread defined for the product involved in the deal If the spread you apply happens to be greater than the Maximum Spread then the Maximum Spread will be applied on the rate On the other hand if it is less than the Minimum Spread defined for the product the Minimum Spread will be picked up For a floating rate the spread will be applied over the market rate applicable for the day Fixed Profit Rate If the deal involves a fixed profit rate product the default rate defined in the Product ICCF screen will be displayed here This rate can be changed through this screen only for the main profit component This changed rate should be greater than or equal to the Minimum Rate and less than or equal to the
106. e rate on a contract involving MM01 that varies from the Standard Rate by between 3 and 6 the system will display an override message If you apply an exchange rate on a contract involving MMO1 that varies from the day s rate by more than 6 the system will not store the contract mn ORACLE The exchange rate variance is a percentage 3 2 1 4 Indicating Fields to be Rekeyed during Authorization You can specify the values that the authorizer of an MMM deal has to rekey at the time of authorization All operations on a deal input modification reversal manual liquidation or manual rollover have to be authorized e by a user other than the one who carried out the operation e before you can begin the end of day operations When you invoke a deal for authorization as a cross checking mechanism to ensure that you are calling the right deal you can specify that the values of certain fields should be entered before the other details are to be displayed The complete details of the deal will be displayed only after the values to these fields are entered This is called the rekey option If no re key fields have been defined the details of the deal will be displayed immediately once the authorizer calls the deal for authorization The re key option also serves as a means of ensuring the accuracy of inputs Example At your bank Mr Trevor Atkins inputs a deal of 1M USD which has a profit of 20 and a tenor of one month The de
107. e reference number of the contract Currency The currency of the contract Contract Amount The amount of contract Euro equivalent The amount in Euro Outstanding Amount The outstanding amount Euro equivalent The outstanding amount in Euro Notice Contracts Notice Days The number of notice days Currency The currency Contract Amount The contract amount Euro Equivalent The contract amount in Euro Outstanding Amount The outstanding amount Euro equivalent The outstanding amount in Euro Fixed Maturity Contracts Due Date The due date Customer The ID of the customer Contract Reference The reference number of the contract Maturity Date The maturity date of the contract Component The component Currency The currency in which the amount is displayed Due Amount The due amount Euro Equivalent The amount in terms of Euro Outstanding Amount The outstanding amount 11 17 ORACLE Field Description Euro Equivalent The outstanding amount in Euro 11 11 Overdue Schedules Report This report provides the schedule overdue details of Islamic money market contracts To invoke the Overdue Schedule Report screen type MCRPOSCH in the field at the top right corner of the Application tool bar and click the adjoining arrow button Overdue Schedules Report Selection Criter
108. e repayment account are insufficient If the availability of funds has to be ascertained e All the components which are due will be liquidated only if funds are available in the repayment account e If there are insufficient funds a partial liquidation of components will be done to the extent of funds in the account If this is the case The payment schedules for those components which have not been liquidated or which have been partly liquidated will be left outstanding Aging analysis on such borrowings will be carried out as specified for the product and an appropriate compensation applied The component s for which funds are available will be liquidated in the order you specified in the Liquidation Order screen Here in you may have allotted priority to the recovery of certain components For example you may have specified that you would like to recover the profit commission and fees first and then the principal If the liquidation order is not specified for the components then it will be liquidated in the following order e Compensation Profit if this has been applied e Profit e Principal If availability of funds need not be ascertained and the liquidation results in the account going into a debit balance e All the components will be liquidated only if you have allowed overdraft for the repayment account The schedules for the components will be liquidated to the extent of the debit balance that you have allowed I
109. ed Oracle FLEXCUBE ref as the parent contract For further details on reversing and rebooking of a contract refer the section titled Reversing and Rebooking a Contract of this user manual Dealer When processing a deal you must specify the code of the dealer ORACLE In the Dealer Code Details screen you maintain a list of the dealers in your bank That is those who have the requisite rights to enter into an MMM deal on behalf of your bank Fund Id Select the fund id from the adjoining option list The system defaults the value of Default Mudarabah Fund as fund id This field will be enabled only for fund branch The system populates the fund MIS details for a contract which is linked to the Fund ID 4 3 1 Specifying Settlement Details You have to specify the settlement account if settlement instructions have not been defined for the customer The settlement account that you specify is the account through which e The placement amount would be drawn down e The repayment for ALL the components would be done e Fora borrowing all repayments be made to this account If settlement instructions have been defined for the customer the settlement accounts will be picked up from those instructions While entering the deal details you can change the settlement instructions for the deal If a settlement account has been specified in the settlement instructions for the customer and a different account has been s
110. eduled for today the last working day before the holiday will be processed The events of the holiday will be processed on the next working day after the holiday during beginning of day processing The accrual and income accounts will be picked up based on your definition in the Chart of Accounts An Accrual Control Journal is generated by the Automatic Contract Update function reporting the details of the accruals performed For a placement on which there is a default in payment you can specify that aging analysis should be done This analysis involves the change of status of a deal When the status is changed you can also specify that the accruals on the deal should be stopped For such deals the accrual entries will not be passed they will only be calculated and reported in the Accrual Control Journal under Memo Accruals 8 10 1 Contents of the Accrual Control Journal The memo accrual function will give you the latest accrual amounts for all components of a live deal without actually passing the accrual entries The memo accrual function generates the Memo Accrual Control Journal that reports the accrued amounts for the various components of the deal like profit commission charge or fee that are due on each deal as of the current system date vs ORACLE 8 10 2 Intra Day Accruals The Intra Day Accruals is a batch process that computes accruals for different kinds of investments made by funds This batch includes process
111. eeeeceescesecusecsecsaecasecseeeseeeseeeeeeseeeneeenees 7 9 7 2 2 Impact of Liquidation Mode on Rollover cccccccesccesecesecetecneenseessessseeseeseeeeeenseesecsecuaecsaecaaeeaeeeneees 7 9 7 3 FEATURES OF THE MURABAHA PRODUCT ROLLOVER DETAILS SCREEN cccccccccccececesesesesecesesesessseeeeeeess 7 10 7 3 1 Rollover of Profit Charge and Fee COMponent cccccsccssccesecesecseenseeseeeseeeseeeseeseeeeeeeeceseensecaeengs 7 10 73 2 Updating Credit Limit Utilization c ccceccceccsscescceescesscesecesecesecsecaaecssecseecseessesseeeeeesecesecnsecaeeaeenae 7 11 7 3 3 Applying Taxon Rollover sssccseiescesessessasessusoasnauaaeadessnecuseiees sass dun caeeasas sagesriosdaseasessa suche caseaebseasetouecaee 7 11 7 3 4 Applying BrOKC LAGE ns aiia eena a via a E ea s EA aeaa aE inaa sia o sinai 7 12 7 3 5 Rolling Over With Profit secssccssissvecascisspiyseds nasa seasedaasusnestasassbs soso shine caseasbscadesseesaseanbishseshnecaseavabeadennbesass 7 12 7 3 6 Liquidating Tax on Principal upon Rollover cccccccesccesscesecesecesecusecuseeaseeseesaeeeeeeseeeseeeseceseenaeenaeenas 7 12 7 3 7 Specifying the Rollover Mechanisan sccesccesccesccssecsseesseenseeseesceeescesccesecesecsecsaecasecaeeeseseseesaeeseeeneeesees 7 13 7 3 8 Capturing the Rollover Method 0 cccesccssccsseesseesseeeeeseceseeeecesecusecuaecssecaaecseeeseesseeseeeseseeeeaeensesnaenas 7 13 7 4 SPECIFYING CONTRACT ROLLOVER DETAILS inire eere anen NE EEr Eer Ee e EEE Eea Er
112. efault Allow Rollover Allow Brokerage Pay Past Schedules Maximum Prepayment Penalty Unit intra day Deal Rate Variance Multiple Penalty Components Normal Maximum Authorization Rekey Fields Holiday Treatment Currency 5 Cascade Schedules Value Date Holiday Currency Contract Amount Ignore Holidays Maturity Date D Move Across Month Schedule Movement Move Forward Move Backward Rollover Details Schedules Liquidation Order Grace Days TE ORACLE 5 3 1 Specifying the Mode of Liquidation Components of a deal can be liquidated automatically or manually In the Product Preferences screen you should indicate whether the mode of liquidation of repayment schedules is to be automatic Specify Auto liquidation if you want the components of a deal involving a product to be liquidated automatically If you so specify a schedule will be automatically liquidated on the day it falls due during beginning of day processing by the Automatic Contract Update function Now consider the following situation e You have indicated automatic liquidation e The schedule date falls on a holiday e You have specified through the Contract Preferences screen that the holiday be ignored while calculating the schedule date In such a situation a repayment falling on a holiday would be processed according to your specifications for holiday handling in the MMM Branch Parameters screen It would be as follows e f you have specified tha
113. er Contents of the report Field Description Broker The code that identifies the broker Name This is the full name of the broker Contract This is the reference number of the contract Reference Product Type This is the product type whether Borrow or Placement Value Date This is the date of initiation of the contract Maturity Date This is the maturity date of the contract Currency This is the currency in which the brokerage amount is processed Brokerage Amount This is the amount of brokerage in terms of brokerage currency Method This is the method of brokerage payment Status Thais is the status of the contract which may be Liquidated or Outstanding Total for each broker Number of Deals This is the total number of deals Total Liquidated This is the total liquidated amount in terms of brokerage currency Total Outstanding This is the total outstanding amount in terms of brokerage currency ORACLE 11 5Ilslamic Money Market Profit Calculation Report This report provides the profit details for one or more contracts for a selected date range To invoke the Islamic Money Market Profit Calculation Report screen type MCRPCALC in the field at the top right corner of the Application tool bar and click the adjoining arrow button Islamic Money Market Profit Calculation Report Contract Single Contract
114. er Report Format PDF PrinterAt Client v Report Output Print v Printer Specify the following details Product Type Specify product type for which you want to generate the report You can select the required product types from the following e Placement e Borrow e Commitment From Date Specify the start date of the report date range To Date Specify the end date of the report date range Sort Criteria You can sort the records in the report based on the following e Transaction date e Reference number ree ORACLE 11 9 1 Select the appropriate one Click OK to generate the report Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page number Body of the report Field Description Contract Reference The reference number of the contract Counterparty The identification of counterparty Counterparty Name The name of the counterparty Maturity Date The maturity date of the contract Value Date The value date of the contract Amount The total amount Currency The currency in which the amount is displayed Transaction Date The date of
115. er The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page number Contents of the report Field Description Contract Reference The reference number of the contract Counterparty The identification of counterparty Name The name of the counterparty Contract Status The status of the contract Elapsed Days The number of days elapsed ne ORACLE Field Description Currency The currency of the contract Amount The total amount Maturity Date The maturity date of the contract 11 7 Contract Event Details Report This report provides the event details contracts associated with a specific product or all products To invoke the Contract Event Details Report screen type MCRPEVNT in the field at the top right corner of the Application tool bar and click the adjoining arrow button Contract Event Details Report Event Details From Date To Date Product Code All Product Codes Specific Product Reference No To ReportFormat PDF PrinterAt Client v Report Output Print Printer Specify the following details Product Code Specify whether you want to generate the report for one product or all the products If you select Specific Product you need to specify the product code in the space provided below
116. er 20 1997 Since there was no schedule due on this date you decide to do a manual payment Now since you have indicated the amount paid as USD 12500 in an earlier field in this screen the system will display against the October 1 schedule as USD 10000 in the Amount Paid column Against the October 15 schedule you the system will display the amount as USD 2500 in this column You can also see the Amounts which are due on a particular date are ORACLE Component Due Date Basis Amount Amount Paid Profit October 1 10000 10000 October 15 15000 2500 5 17 6 Basis Amount The amount outstanding for the component being liquidated is displayed here 5 17 7 Schedule payment Amount Paid You can see here the amount paid for the component as of the value date the current system date 5 18 Deleting Manual Payments Payments made using the manual payments function can be deleted before the payment is authorized All the entries passed during the payment will also be deleted All the schedules will be restored to the original status In short the prepayment status of the deal will be restored From the Application toolbar choose Delete or click Delete icon in the toolbar You will be prompted to confirm the deletion Once you confirm it all the entries that have been saved but not authorized will be deleted 5 19 Reversing Manual Payments You can reverse authorized manual payments The sys
117. er is not allowed However if you specify that rollover is not allowed for a product you cannot rollover deals involving the product The terms of the rolled over deal can be the same as those of the original deal or they can be different If the terms should be different they should be specified during deal processing Allow Brokerage You can specify whether brokerage should be applied on deals involving this product If brokerage is specified for the product you can waive it for specific deals but if you have specified that brokerage is not applicable to the product you will not be able to levy brokerage on a specific deal involving the product Prepayment Compensation You can indicate whether compensation is to be applied on a contract involving the product if a withdrawal is made before it is due Discount Accrual Applicable You can check this option if the component is to be considered for discount accrual on a constant yield basis This option will be enabled only if brokerage applicable is Yes oe ORACLE Intra day Deals Deals having the same Maturity and Value Date are known as Intra day deals You will be able to capture intra day deals only if you have indicated that the product for which you are specifying preferences is meant for intra day deals Pay Past Schedules A backdated deal may have schedules prior to today s date If so you have to indicate whether those schedules have to be liquidated w
118. ered as a part of the utilized amount for the purpose of risk tracking The following example illustrates how this concept works Example You have made a placement with Cavillieri and Barrett Finance Corporation of USD 100 000 on June 1 1997 at 20 profit The placement is to be liquidated at maturity on December 31 1997 The Cavillieri and Barrett Finance Corporation s credit limit is USD 110 000 Now the Bank s placement is not liquidated at Maturity and you plan to renew it by rolling it over into a new contract If you opt to update the credit limit utilization the total liability on December 31 1997 will be USD 111 670 USD 100 000 USD 11 670 as of December 31 Profit calculation method Actual 365 And since the utilized amount is above the Cavillieri and Barrett Finance Corporation s central liability limit USD 110 000 it will not be eligible for the rollover or renewal of the placement However if you do not opt to update the credit limit utilization Cavillieri and Barrett Finance Corporation will be eligible for the rollover of the placement if it has been indicated for rollover with profit This option applies only if you want to roll over a deal with profit 7 3 3 Applying Tax on Rollover For tax to be applicable on a rolled over deal e t should be applicable to the product involving the deal e t should not have been waived for the old deal ae ORACLE You should indicate whether tax has
119. es allowed for this event Advices Advice Name Description BILLNOTC Billing Notice SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 1 9 REVN Rate Revision Accounting Entries No accounting entries allowed for this event Advices Nil 10 8 ORACLE 10 5 1 11 10 5 1 10 REVC Reversal Accounting Entries No accounting entries allowed for this event Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 ROLL Rollover Accounting Entries Accounting Role Amount Tag Dr Cr Indicator PENL1REC PENL1_LIQD Credit CUSTOMER PENL1_LIQD Debit CUSTOMER PRINCIPAL_LIQD Debit ASSETGL PRINCIPAL_LIQD Credit CUSTOMER PRINCIPAL_LIQD Debit ASSETGL PRINCIPAL_LIQD Credit CUSTOMER lt Profit_Component gt _LIQD Debit Interest_componentREC lt Profit_Component gt _LIQD Credit ROLL_WASH PRINCIPAL_ROLL Debit ASSETGL PRINCIPAL_ROLL Credit ROLL_WASH lt Profit_Component gt _ROLL Debit Interest_componentREC lt Profit_Component gt _ROLL Credit Advices Advice Name Description MM_ROLL_ADV Rollover Advice SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 9 ORACLE 10 5 2 MMM Borrowing with Fixed Discounted Profit The preferences set for this product are as follows e The payment type for this product is of Discounted type e Forward dating is allowed for the product e Broke
120. f Day Processes Initiation of a deal with a Value Date in the future Application of the appropriate profit rates for deals with Floating Profit Application of rate changes with a Value Date in the future Generation of a Billing Notice as a reminder of a payment for a placement Liquidation of a scheduled repayment interim or at maturity Rollover of a deal Change of deal status as part of the aging analysis process Automatic events falling on a holiday and scheduled to take place on the day after the holiday 8 2 2 End of Day Processes Periodic accrual of ICCF components Generation of reports Automatic events falling on a holiday and scheduled to take place on the day before the next working day a ORACLE You would have noticed that some activities that can be carried out automatically would be done so only on a specific instruction from you The following are such activities e Liquidation of a scheduled repayment e Rollover of a deal 8 3 Specifying Branch Parameters A set of rules that govern the deals that a particular branch of your bank enters into are defined through the Branch Parameters screen Money Market Corporate Deposits Syndication Branch Parameters New Enter Query Branch Code Branch Name Process Till Next Working Day System Date C Settlement Message At 1 Next Working Day 1 Manual Liquidation i as Annual Percentage Yield 4 T J TaxBasis _ Amount Calculation Required Liquidatio
121. f availability of funds If this is so The payment schedules for those components which have not been liquidated or have been partly liquidated will be left as outstanding Aging analysis on such placements will be carried out as specified for the product and an appropriate compensation applied if it has been defined for the product The component s for which funds are available will be liquidated in the order that you have specified in the Liquidation Order screen This can be done if you want to allot priority to the recovery of certain components For example you may want to recover the profit type of components first and then the principal If the liquidation order is not specified for the components then it will be liquidated in the following order e Compensation Profit if one has been applied e Profit e Principal If availability of funds need not be ascertained and the liquidation results in the account going into a debit balance e All the components will be liquidated only if the repayment account has been defined for overdraft The schedules for the components will be liquidated to the extent of the debit balance allowed If it crosses the extent of debit balance allowed the extent of overdraft limit the liquidation will be done with an overdraft override which will be automatically recorded On the repayment account that has a debit balance the debit profit as specified for the type of accounts current
122. f maturity you can change the notice days Two activities take place when a deal is rolled over e The original deal is liquidated e Anew deal initiated However the Reference Number of the renewed or rolled over deal will be the same as that of the old deal 7 8 Advices for a Rolled Over Deal In the Product Events Definition screen you define the events for which advices are to be generated for deals involving a product An advice will be generated when a deal is rolled over if so specified for the product the deal involves Generation of advices upon rollover if specified will be as follows e When the deal is rolled over with profit that is the entire outstanding amount in the original deal is rolled over without any component of the original deal being liquidated the liquidation advice for the original deal will not be generated Instead a rollover advice with the details of the liquidation of the original deal and its subsequent rollover into a new deal will be generated e When the deal is rolled with an amount that is not the entire outstanding amount in the original deal the liquidation advice s for the original deal will be generated along with the rollover advice 7 9 Authorizing a Manual Rollover The operations on a deal like input modification manual liquidation and manual rollover have to be authorized by a user other than the one who performed the operation All the deals should be authorized before you can
123. f the overdraft exceeds the debit balance allowed the liquidation will be done with an overdraft override that is automatically recorded e On the repayment account that has a debit balance the debit profit as specified for the type of accounts current or savings will be applied e No liquidation will be done even for a partial amount if the account has not been defined for overdraft Borrowings with payments which have not been processed due to non availability of funds will appear in the Exception Report generated by the Automatic Contract Update function for the day ne ORACLE For the final principal payment on maturity the availability of funds in the payment account will always be verified 5 7 Invoking the Contract Schedules Screen When you are in the Contract On line screens you will see sections in the screen saying Preferences Schedules and Rollover and so on When you click on any of these the respective section the screen will be displayed To go to the Contract Schedules screen click on Schedules Contract Online Ti New Enter Query User Reference Reference Number _Product Code E Product Description Source El Contract Schedules Rollover Preferences Contract Schedules Default Explode a Type Component Start Date Number Frequency Unit Amount Bullet Contract Linkages a Type Linked
124. ferent types of MMM deals They are e MMM Placement with True Discount Profit e MMM Borrowing with Fixed Discounted Profit e MMM Placement with Fixed Bearing Profit e MMM Borrowing with Fixed Bearing Profit aiso note that some of the Amount Tag s linked to the Accounting Roles are user defined 10 5 1 MMM Placement with True Discounted Profit The preferences set for this product are as follows e The payment type for this product is of True Discounted type e Forward dating is allowed for the product e Brokerage is not payable 10 5 1 1 BOOK Booking Accounting Entries Accounting Role Amount Tag Dr Cr Indicator CHARGING CHARG Credit CUSTOMER CHARG Debit FWDASSETOFF PRINCIPAL_FWD Credit FWDASSETGL PRINCIPAL_FWD Debit Ta ORACLE Advices Advice Name Description MM_DEAL_SLIP Deal Slip SWIFT_MESSAGE MT320 MT330 MT335 MT350 PAYMENT_MESSAGE Payment Message MMCONPLA MM Placement Confirmation 10 5 1 2 INIT Initiation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator INTERRIA INTER_LIQD Credit CUSTOMER INTER_LIQD Debit ASSETGL PRINCIPAL Debit CUSTOMER PRINCIPAL Credit FWDASSETGL PRINCIPAL_FWD Credit FWDASSETOFF PRINCIPAL_FWD Debit FWDASSETGL PRINCIPAL_FWD Debit FWDASSETOFF PRINCIPAL_FWD Credit ASSETGL PRINCIPAL_ROIN Debit ROLL_WASH P
125. g a true discounted product you should enter the face value nominal of the deal You can enter T or M to indicate thousands or millions respectively For example 10T means 10 000 and 10M means 10 million Amendment to this field will be considered a financial amendment Note that the amount which you enter would be taken to be in the currency that you specify as the deal currency Ext Ref No If the transaction is being uploaded from an external source you can specify the identification for the transaction in the external source as the external reference number You cannot amend this value post contact save Line By default you will view the placement credit line defined for the customer You can change over to another authorized credit line if you want to track the placement under a different line During an upload the credit lines for the given counterparty product branch currency combination are fetched by the system If there is only one credit line available the system will display it here If there are multiple lines found the field will be left blank Reversed Reference The reference number of the contract that is being reversed and rebooked is displayed here To enable amendment of MMM Contract details Oracle FLEXCUBE will reverse the old contract and rebook a new contract with the old user reference number and external reference number The old contract is reversed and a new contract is booked with Revers
126. g taxed the type of tax and the event booking liquidation and so on upon which it is applied a ORACLE The accounting roles and the General Ledgers for accounting purposes when an event initiation liquidation and so on takes place and the advices or messages to be generated The customer categories and customers who can be counterparty to a deal involving the product The branch and currency restrictions A deal that you enter into acquires the details specified for the product However you also need to enter information that is specific to the contract You can enter details specific to a contract in the Murabaha Money Market Contract Online screen You need to enter the following information The template ID if you are using one The base number of the counterparty customer The currency of the contract The principal amount for a deal with True Discounted profit you should enter the nominal The credit line under which the placement has to be tracked The tenor related details for the deal The code of the broker involved The dealer involved The default settlement account The maturity details The related reference number if any The profit details Whether the deal can be rolled over The status of the placement if it is to be changed manually The following details are displayed They cannot be changed Product type Default tax scheme Schedule payment method Profit type Rollover count at ORAC
127. g the Contract Input screen and going to the Schedule Redefinition screen by clicking Revision Details button If you click the redefinition button on the schedules screen all the schedules with today s date or a date in the future will be erased and you will be allowed to enter a new set of schedules To redefine a schedule for only one component highlight the schedule make the changes and click add button If the schedules have already been authorized then you will have to make the changes through the Modify function After making the changes you can save the redefined schedules by clicking add button To delete a schedule before authorization click delete button 5 9 1 Authorizing a Redefined Schedule A redefined schedule has to be authorized before it can be used 5 10 Viewing Schedule Details When you click Schedules tab on the Contract On line Schedule Definition screen you will see the Payment Schedule Details screen Here you can view the details of the schedules for a particular deal Contract Online ME o DB be User Reference Reference Number Product Code Product Description FL E Source az Contract Schedules Rollover Preferences Contract Schedules E Type Component Start Date Number Frequency Unit Amount Bullet v Contract Linkages W type Linked To Account Currency Available Amount Exchange Rate Linked A
128. ge is yet to be authorized e Incase of a future value dated change the change has not yet been effected All the value dated changes have to be authorized before the End of Day operations begin All the future valued dated changes are applied by the automatic contract update program when the changes become due If the value date of the change is earlier than or the same as today s date the changes are applied immediately To delete value dated changes call the deal on which you have made value dated changes that are still to be authorized through the Value Dated Changes screen by entering the reference number The details of the contract will be displayed Choose delete from the Application toolbar or click Delete icon on the toolbar The value dated changes will be deleted 6 5 Uploading the Contracts for Amendment From an external system you can upload contracts that require amendment in Oracle FLEXCUBE The system will distinguish between the new and the contracts that require amendment based on the action code of the uploaded record For a contract requiring amendment the action code will be AMND If the action code is AMND Oracle FLEXCUBE will first check whether the contract exists in the system or not If the contract does not exist in the system an error message will be displayed to notify that the contract cannot be amended The reference number provided by the external system has to same if it is a new contrac
129. gn Oracle FLEXCUBE offers you the option to process maturities manually 2 5 Rolling Over Deals The Murabaha Money Market module provides an extensive feature for rollover of contracts on maturity The rollovers could be with or without profit with the option to net withholding tax on rollover 2 6 Tracking and Retrieval of Information The interface with the Limits module ensures online counter party exposure tracking The module gives you a better handle over your Murabaha Money Markets portfolio by constantly providing you with real time and relevant information for efficient asset liability and maturity management During the day or end of the day you may want to retrieve information on any one of the several operations that were performed at your bank This information can be generated in the form of reports The following are some of the reports that you can generate for the Murabaha Money Markets module e Contract schedules and maturities report e Forward contracts report e Value dated amendments report e Contract events report e Contract retrieval report e Memo accrual control journal e Accrual control journal e Accrual control journal summary e Activity journal i ORACLE 3 Defining the Attributes of a Murabaha Money Market Product 3 1 Introduction In this chapter we shall discuss the manner in which you can define attributes specific to a Murabaha Money Market product You can create an Islamic Money Ma
130. he schedule date will be kept in the same month Example Scenario 1 You have defined a repayment schedule that falls due on April 30 1998 This happens to be a holiday You have indicated that in case of a holiday the schedule date is to be moved forward to the next working day If you also indicated that the schedule can be moved across the month then the schedule will be automatically moved to May 1 1998 the next working day If you disallowed movement across the month but have indicated forward movement for the schedule the schedule date will be automatically moved backward in this case to the last working day of the same month that is to April 29 1998 despite your having indicated a forward movement into the next working day Scenario 2 You have defined a repayment schedule that falls due on May 1 1998 This happens to be a holiday You have indicated that in case of a holiday the schedule date is to be moved backward to the previous working day If you have indicated that the schedule can be moved across the month then the schedule will be automatically moved to April 29 1998 the previous working day If you disallowed movement across the month but have indicated backward movement for this schedule the schedule date will be automatically moved forward in this case to the next working day of the same month that is to May 2 1998 despite your having indicated a backward movement into the previous working day
131. hedule Consider Branch Holiday C Move Across Months Cascade Schedules LI Move Payment Move Commodity J ignore Holidays C Rate Code Currency C Move Revision Schedule Other Details O Deduct Tax on Capitalization O Liquidate Back Valued Schedules O User Defined Holiday Currency z Schedules C Holiday Month Schedule Move Forward Move Backward Financial Statement Cycle Annual b l J External Interface Details External Reference Parent Reference O Partial Manual Liquidation O Automatic Liquidation Brokerage Events Profit Tax MIS Change Log Fields Effective Profit Rate Revision Details Advice Code Commodity Tracking Amortization Type Reducing Balance Rule 78 O None Detailed Summary Track Receivable Settlement Message Generation Details C Manual Liquidation O Settlement Message Generation Required Demand Basis SGEN vi 5 6 1 1 Specifying the Contract Preferences Although schedules are inherited by a deal from the product through the Contract Preferences screen you can to define your own schedules for a deal A schedule date e Should be later than or the same as the Value Date e You can have only one schedule for a component for a date e t cannot be beyond the Maturity Date 5 6 2 Liquidating Back Valued Schedules If you have specified while defi
132. hen a deal is input it is assigned a version number of 1 From then on each amendment of the deal results in its next version When you come to the Detailed View Screen for a deal the latest version will be displayed To see the previous version click backward button from a previous version clicking forward button displays the next version 4 13 Initiating a Future Value Dated Deal A future dated deal is one that has a Value Date that is later than the date on which it is booked The automatic contract update function will initiate the deal on the Value Date of the deal A future Value Date falling on a holiday will be initiated either on the previous working day or the next depending on your definition for automatic processing at your branch All the initiation related entries specified for the product involved in the deal will be passed automatically If currency conversions are involved the conversion rates as of the date on which the deal is initiated will be picked up from the currency table To recall the rates that are applicable for a deal are defined for the product involved in the deal vee ORACLE If there is a rate revision applicable for the future dated deal on the day it is initiated that is on the future Value Date the rate revision will also be applied on the deal This rate revision could either be due a Floating Rate change or a Value Dated Change 4 13 1 Initiating Future Dated Murabaha MM Deals Manually
133. hen the deal is initiated A back dated deal is one which has a Value Date initiation date falling before the date on which it is booked Example A money market deal can be initiated as of today a date in the future or as of a date in the past Today s date is October 15 1997 Suppose you initiate a deal of 15 000 USD today with the Value Date date on which the deal comes into effect as September 15 1997 the system will pass accounting entries for initiation as of September 15 1997 But if there had been a profit payment schedule for September 30 1997 for 500 USD then if you specify that back values schedules should be liquidated you can make the system pass accounting entries to liquidate this schedule also when the deal is initiated If you specify that back dated schedules are not to be liquidated only accrual entries will be passed till today Please note that the entries associated with each event initiation and liquidation in this case will be passed only if they have been defined for the product Further the accounts used will be the ones defined for each entry Commodity Tracking You can also opt to track commodity for contracts processed under the product If selected commodity tracking becomes mandatory for activating the contracts For such contracts the Commodity Tracking Status will identify the different stages in the contract life cycle This status value will vary for Borrowing and Placeme
134. his indicates the tenor basis upon which the maturity days specified for the rolled over contract will be reckoned The options are Days Months Quarters Semi annuals and Years If you specify days maturity basis and do not specify the maturity days the system rounds the tenor of the original contract to the nearest maturity days basis The rounded tenor is considered as the new tenor of the rolled over contract di ORACLE 7 5 5 Specifying the Rollover Mechanism This indicates whether the rolled over contract will create a new version of the existing contract a new contract or a child contract that can be linked to the parent contract You can choose from the following options e New Version e Spawn Contract e Linked Contract If you select the Linked Contract option the system will not create a new contract or a new version of the old contract during rollover Instead it will post the accounting entries to liquidate the contract The amount will be liquidated into a ROLL_WASH GL You can select Linked Contract only in case you have checked the option Auto for rollover mode 7 5 6 Capturing the Rollover Method If you have indicated the rollover mechanism as Spawn Contract you can use this field to indicate whether a single new contract must be created for the rolled over amount or whether the original contract must be split into multiple contracts or consolidated with other contracts into a si
135. his is because the amount by which it is less is liquidated against the profit and principal of the old deal and the rest is rolled over e The special amount can never be more than The outstanding principal profit of the old deal The outstanding principal If it is then you will have to initiate a new deal Example To carry forward the example of Cavillieri and Barrett Finance Corporation with whom you have made a placement of USD 100 000 on June 1 1997 at 20 profit the placement was to be liquidated at maturity on December 31 1997 but at your customer s request you decide to renew it roll it over Assume that Cavillieri and Barrett Finance Corporation decides to repay USD 20 000 on December 31 1997 the Maturity Date of the placement Now the entire outstanding profit of USD 11 670 is liquidated along with a part of the principal The outstanding principal now stands at 91 670 and it is renewed or rolled over This is what is termed a Special amount Profit will be calculated on this principal for the renewed placement 7 5 12 Specifying the Maturity Type The Maturity Type which you have specified for the old deal will apply to the deal being rolled over by default However you can change the Maturity Type through this screen If the maturity type is to be changed you have to specify the new Maturity Type for the rolled over or renewed deal It could be Fixed This type of deal has a fixed Ma
136. ia Product Type Value Date Borrowing v From Value Date To Value Date Product Code Contract Currency Schedule Date From Date To Date Customer Report Format PDF PrinterAt Client Report Output Print Printer Specify the following details Product Type Specify product type for which you want to generate the report You can select the required product types from the following e Placement e Borrowing Product Code Specify product type for which you want to generate the report Contract Currency Specify the contract currency of the contracts that you need to include in the report Customer Specify the customer number whose contracts you need to include in the report a ORACLE From Value Date Specify the start date of the value date range To Value Date Specify the end date of the value date range From Schedule Date Specify the start date of the schedule date range To Schedule Date Specify the end date of the schedule date range Click OK to generate the report 11 11 1 Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which the
137. iewing the Details of the Deal The details of the unauthorized deals can be viewed by double clicking on the deal reference number in this screen In case of money market deals the screen that is displayed on double clicking a deal depends on the stage of the deal that is unauthorized e If booking initiation or deal amendment is not authorized the Contract Online screen is displayed e If apayment of a deal is unauthorized the Payment screen is displayed e f avalue dated amendment is unauthorized the Value Dated Amendment screen is displayed 4 17 Reassigning the Murabaha MM Contract to another User A contract can be deleted only by the user who entered it If a contract has to be deleted and the user who input it is not around to do it you can reassign the contract to another user so that the other user can delete it Typically this situation may arise during End of Day operations when a contract that is not authorized has to be deleted and the user who input it has left office for the day The access rights to reassign a contract are usually allotted to a senior user in the department oe ORACLE You can perform the reassigning operation through the Islamic Reassign User Prior to Authorization screen You can invoke this screen by typing MCDREAS in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button The screen is displayed below Reassign User i New 5 Ente
138. ight corner of the Application tool bar and click the adjoining arrow button Islamic Money Market Brokerage Details Report Report Name Report For All Brokers Specific Brokers Report Period Include Liquidated Contracts From Date Ez To Date amp ReportFormat PDF Printer At Client v Specify the following details Report For Specify whether you want to generate the report for a selected broker or all the brokers If you select Specific Brokers you need to specify the broker ID in the space provided below Include Liquidated Contract Check this box to include the liquidated contracts in the report From Date Specify the start date of the report date range To Date Specify the end date of the report date range Broker on ORACLE 11 4 1 If you wish to generate the report for one or more selected brokers you need to specify the broker ID here This is mandatory if you have selected Specific Brokers against Report Click OK to generate the report Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page numb
139. ile working on the Money Market module e Core Services e Core Entities e Deposits e Procedures e Products e Settlements e Profit e Charges and Fees e Tax e User Defined Fields 1 5 Glossary of Icons This User Manual may refer to all or some of the following icons Delete row ke ORACLE Option List re ORACLE 2 An Overview of the Murabaha Money Market Module 2 1 Introduction The Murabaha Money Market module of Oracle FLEXCUBE is versatile and efficient With it you can handle all kinds of placements and borrowings whether Call Notice or Terms of varying tenors profit types and profit payment methods The module is efficient in that it automates processing accounting and messaging of deals captured in your dealing room system 2 1 1 Automatic Deal Upload The corner stone of this module is the Deal Upload facility With this facility you can automatically upload the deals captured in your dealing room system On upload you can enrich the deals with additional information relating to accounting and messaging such as profit accrual brokerage tax rollover customer advice generation details etc This information determines how deals are handled by the automatic processes that you execute Processing thus requires minimal manual intervention and is efficient 2 1 2 Architectural Advantages In architecture Oracle FLEXCUBE is modular yet integrated That is front end modules such a
140. ing of fixed asset depreciation The intraday accruals depreciation are performed only for those products for which accruals depreciation cycle is due for the day In case of inter fund subscriptions the system does not calculate the profit for the investing fund This is an intra day process that is applicable only to fund branches Intra Day Accruals work in line with the normal end of day accruals Intra day accrual will process in the same manner as an End of Day EOD batch However there are some exceptions as listed below e Incase of components linked to floating rates the intraday accruals are processed at the prevailing rates while the EOD accruals are processed at revised rates e If there are any payment schedules due which are not liquidated then compensation accruals are processed during intraday accruals On manual liquidation of the schedule after the intraday accruals excess compensation accrued is reversed If the finance is in PDO status the accrual entries are posted to the corresponding GL maintained for the product After manual liquidation if the status returns to normal then accrual is reversed from GL to PDO status e f any back dated rate change or principal increase occurs the system performs catch accruals till the last working day If such an operation is performed after the intra day batch is processed the catch up accrual occurs till system date or next working day 1 depending on the branch paramete
141. ings from customers for a maximum duration of one week For such a product you can set a minimum tenor of one day and a maximum tenor of one week You can also define a default tenor for the product of say one week This tenor will be applicable to all the deals involving the product if you do not specify any tenor at the time of its processing Specifying Exchange Rate Variance When a deal involves a currency conversion the standard rates defined for the currency will be picked up by default This default can be changed for specific deals You can impose some restrictions on the changed rate as follows Normal If the exchange rate variance exceeds the standard exchange rate specified for the currency the system will ask you for an override before proceeding to apply the exchange rate Maximum You cannot apply an exchange rate on a deal involving the product that you are creating that is greater than the value that you specify as the Maximum Variance If the exchange rate variance exceeds the standard rate by the value that you specify as the maximum variance the system will not allow you to store the contract Example You have specified the normal variance as 3 and the maximum variance as 6 for Product MM01 Now if you apply an exchange rate on a contract involving MMO1 that varies from the applicable rate maintained for the day by less than 3 the system will NOT display an override message If you apply an exchang
142. initiated you should enter the date on which the deal began In this case the date will be for information purposes only and for all accounting purposes the Value Date will be considered as the date on which the deal was initiated a ORACLE Status Control The status of a placement is indicative of the status of repayments on it If you have specified automatic status movement for the placement it will be moved automatically to the status as per your definition However if you indicated that the status change will be made manually on the placement you can change the status manually in this screen Even if you have defined a placement with automatic status movement you can still change the status manually before the automatic status change is due There is yet another scenario where you have defined a placement with automatic status movement forward but manual status movement in the reverse direction That is when the conditions for a placement being in a particular status no longer exist if you have specified manual reverse movement then you will have to manually move the placement to the appropriate status A placement on which the latest repayment has been made will be in the Active status If a payment is outstanding on a placement its status can be changed based on your requirements of reporting placements with outstanding payments The different status codes applicable for a placement are defined for a product and it applies to
143. iquidate the profit schedule as of July 31 which is the next schedule If the amount paid is USD 1300 the schedule for July 31 will be picked up for processing The complete schedule of June 30 can be liquidated along with the profit component of July31 The remaining USD 30 can be used to partially liquidate the commission component for July 31 You have to enter in the Amount Paid field the actual amount being paid This amount can either be allocated to the various components manually by entering the break up of the amount against the various components or automatically by clicking the Allocate button The automatic allocation is done based on the Liquidation order you have defined for the product If you have not specified the order of liquidation for the principal and the profit type of components the amount will be allocated for liquidation in the following order e Compensation profit if one has been applied e Profit e Principal If a payment that covers both past and future schedules is made the system will force you to pay out the past schedules before the future schedules are paid If an ICCF component is based on the outstanding principal you will not be able to make a payment where the amount is more than what is due for the component as of the system date 5 15 Navigating to Other Screens In the Contract Schedule payment screen you have a set of icons using which you can use as following
144. is You can specify whether the latest market rates have to be applied every time they change or if they have to be applied periodically by defining an attribute called the Rate Code Usage through the Product ICCF Details screen for a floating profit type If you specify auto rate code usage all the rate changes made during the liquidation or accrual period will be considered If you specify periodic rate code usage the rates will be periodically refreshed and the rates as of a specific frequency or date will be applied For a deal that has been defined with Periodic Profit that has to be applied at periodic intervals you can specify the following e Frequency at which the periodic rate change has to be applied e Dates on which the periodic rate change has to be applied 5 8 2 Specifying the Rate Revision Frequency In the IMM Contract Schedules screen select the component for which the Rate Revision frequency has to be defined say PROFIT1 Check the Rev box Revision Box to indicate that it is a rate revision schedule Next enter your specifications in the frequency it could be daily weekly and so on the number and unit fields Also give the Start Date on which the first revision has to take place For example if you specify the frequency as weekly the revision will take place every week beginning on the Start Date that you have specified 5 8 2 1 Rate Revision Dates Revision frequency has to
145. is code should have four characters You can follow your own conventions for devising this code While defining a new product you should enter a code which is unique across the different modules of Oracle FLEXCUBE For instance if you have used MMO1 for the Money Market module you cannot use it as a code in any other module Product Description Enter a unique code and a brief description for the product that you want to set up Enter a brief description of the product The description will be associated with the product for information retrieval purposes Slogan Enter the marketing punch line to be associated with the product This slogan will be printed on all the advices that are sent to the customer for a deal involving this product For example if you have a borrowings product called Money Multiplier you could enter the slogan Watch your money grow with Money Multiplier Product Type A product that you are defining can belong to any of the following categories e Placement e Borrowing These product categories are referred to as product types When you create a product you must specify the type to which it belongs For example you should specify the product type as Placement if you are defining a placement product and Borrowing if you are defining a borrowing product Description A brief description of the product type is displayed here a ORACLE Product Group Each product is classifie
146. is event 10 5 2 4 LIQD Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator LIABGL PRINCIPAL_LIQD Debit CUSTOMER PRINCIPAL_LIQD Credit CUSTOMER INTER_LIQD Credit INTPIA INTER_LIQD Debit Advices Advice Name Description 10 11 ORACLE Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 PAYMENT_MESSAGE Payment Message LIQDNOTC Liquidation Notice 10 5 2 5 VABM Value Dated Amendment Booking Accounting Entries Nil Advices Advice Name Description MMAMDADV Amendment Advice 10 5 2 6 VAMI Value Dated Amendment Initiation Accounting Entries Nil Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 2 7 CAMD Amendment Accounting Entries Nil Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 2 8 NOTC Billing notice generation Accounting Entries No accounting entries allowed for this event ele ORACLE Advices Advice Name Description BILLNOTC Billing Notice SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 2 9 REVN Rate Revision Accounting Entries No accounting entries allowed for this event Advices Nil 10 5 2 10 ROLL Contract Rollover Accounting Entries Accounting Role Amount Tag Dr Cr Indicato
147. ist Function Identification Choose the function ID of batch that you wish to run The adjoining option list displays all batch processes available for the module 1 ORACLE List of Values Search Search Results Name Fetch Values 1 OF 33 Select the appropriate one You can configure the batch to be run at various stages of day like EOD EOTI and so on For further details about this screen refer the chapter Setting up Mandatory Programs for EOD in the AEOD User Manual 8 5 Initiating the Automatic Contract Update Function For any event involving accounts in a foreign currency this function will use the conversion rate in the Currency table for converting the amount to local currency Ensure that you update the conversion rates in the Currency table with the rates for the day before you execute the Automatic Contract Update function 8 5 1 Processing During Beginning of Day All the automatic events scheduled for the day except the accrual of ICCF components will be carried out when the Automatic Contract Update function is executed during the beginning of day operations In addition all the activities scheduled for the holidays will be carried out if the current system date follows a holiday s and you have specified that events falling on holidays should be processed on the immediate working day succeeding the holiday 8 5 2 Processing During End of Day When the function is executed
148. king day All the initiation related entries specified for the product that the deal involves will be passed automatically If currency conversions are involved the conversion rates as of today will be picked up from the Currency Table If for some reason a deal scheduled for initiation today is not initiated it will be reported in the Exception Report generated during EOD processing oe ORACLE For a future dated deal falling due today if there is also a rate change today the profit amounts are also recalculated for the schedules 8 7 Processing an Automatic Repayment For deals that have been defined with automatic liquidation of repayments the liquidation will be carried out by the Automatic Contract Update function It could be an interim repayment schedule liquidation or a maturity schedule liquidation The schedule whether an interim schedule or a maturity schedule will be automatically liquidated on the day it falls due during beginning of day processing Now if you have indicated automatic liquidation the schedule date falls on a holiday and you have specified that the holiday be ignored through the Contract Preferences screen the liquidation falling due on the holiday would depend on your holiday handling specifications in the Branch Parameters screen e f you specified that processing has to be done today the last working day before the holiday for automatic events right up to the day before the next working d
149. l input Using the Value Dated Changes function you can specify the fee so that the fee entries are passed on the Value Date oe ORACLE When you make a value dated change only the accrual entries will be passed by the Value Dated Changes function All the other accounting entries are passed by the Automatic Contract Update function The Value Date is the date on which the changes that are going to be defined will take effect This can be a date earlier than today today or a date in the future If the value date is a date in the past it should not be beyond the following dates for any component e Last payment date e Last schedule date Also a value date in the future cannot be beyond the Maturity Date of the deal If it has to be beyond the Maturity Date of the deal you have to first postpone the Maturity Date of the deal so that your proposed future value date falls before the new maturity date Only after this change is authorized can you fix a value date in the future for the deal The system defaults to today s date You can invoke Islamic Money Market Value Dated Changes Input screen by typing MCDVAMND in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button In the displayed screen enter the reference number of the deal to which you want to make amendments The main details of the deal will be displayed in the screen Money Market Value Dated Amendments Con
150. lds 9a ORACLE 5 4 4 Specifying the Frequency Unit You can specify the number of units for the frequency you have set for a particular component Example If you want a payment every 15 days you will have to specify the Frequency as Daily Units as 15 For payments every three weeks you will have to define the Frequency as weekly Unit as three 5 4 5 Specifying the Start Date If you have set the Reference as Calendar Date and the frequency as weekly quarterly half yearly or annual indicate the month in which the first schedule falls due If you have set the Reference as Calendar Date you should indicate the date on which the schedule should fall due Specify 31 to indicate that the schedule should fall due on the last day of the month that is 31 for months with 31 days 30 for months with 30 days and 28 or 29 for February The schedule repayment dates will be computed using the Frequency Start Month and the Start Date Example You have defined the frequency as quarterly specified March as the first month and given the date as 31 The repayment schedules will be for March 31 June 30 September 30 and December 31 For a deal starting anytime before March 31 the first liquidation will be on March 31 Number of profit days will be calculated from the Value Date to March31 From then on it will follow the quarterly cycle Similarly you have defined the frequency for another product s default schedules as h
151. ll not be able to amend the contract Amendment for the contract can be uploaded only through the same source as that used for creation Product Code Every deal that you enter into would involve a specific service that you offer which you have defined as a product When processing a deal that you enter into you should specify the product that it involves The option list provides all the valid products maintained through the Murabaha Money Market Product Definition screen All the attributes of the product that you specify will apply to the deal However you can change some of these attributes while entering the details of the contract When you specify the product the product type placement or borrowing will be displayed ORACLE Customer When entering the details of a deal you should specify the customer counterparty involved in the deal The category of customers or the customers themselves who can be counterparty to a deal is defined for the product Specify the code of an authorized customer who falls into a category allowed for the product Currency When processing a deal you should specify the currency of the deal You can select any currency that is allowed for the product which the deal involves Amendment to this field will be considered a financial amendment Amount If a product has bearing or discounted type of profit you should enter the principal of the deal in this screen For a deal involvin
152. lows e The payment type for this product is of Bearing type e Forward dating is allowed for the product 10 5 4 1 BOOK Booking a Borrowing with fixed bearing profit Accounting Entries Accounting Role Amount Tag Dr Cr Indicator FWDLIABGL PRINCIPAL_FWD Credit FW DLIABOFF PRINCIPAL_FWD Debit Advices Advice Name Description MMBRKCON Broker Confirmation MMCONDEP MM Borrowing Confirmation MM_DEAL_SLIP Deal Slip SWIFT_MESSAGE MT320 MT330 MT335 MT350 PAYMENT_MESSAGE Payment Message 10 5 4 2 INIT Initiation of a Borrowing with fixed bearing profit Accounting Entries Accounting Role Amount Tag Dr Cr Indicator FRTAXC_EXP FRTAXC_AMT Debit FRTAXC_PAY FRTAXC_AMT Credit LIABGL PRINCIPAL Credit oe ORACLE Accounting Role Amount Tag Dr Cr Indicator CUSTOMER PRINCIPAL Debit FWDLIABGL PRINCIPAL_FWD Debit FW DLIABOFF PRINCIPAL_FWD Credit Advices Advice Name Description MM_CONT_ADV Contract Advice 10 5 4 3 ACCR Accrual of profit Accounting Entries Accounting Role Amount Tag Dr Cr Indicator INTEREXP INTER_ACCR Debit INTERPAY INTER_ACCR Credit Advices No advices allowed for this event 10 5 4 4 LIQD Liquidation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator INTERPAY I
153. mal Split or Consolidated as applicable in this field 7 4 Specifying Contract Rollover Details By default a contract that is marked for rollover will be rolled over with all the terms of the original contract However you can change certain terms by specifying them in the Rollover Details screen In the Contract Online screen click on the Rollover tab to view the Rollover Details screen eae ORACLE Contract Online i New E mA o D by User Reference Reference Number Product Code Product Description Source az Contract Schedules Rollover Preferences Amount ICCF Rollover Product Maturity Special O Contract Roll By Days v mm O Principal Schedule Basis Product Mechanism New Versio w Principal Profit Contact Method Normal i Principal Profit Tax Mode Auto Maturity Days E Manual Maturity Date E2 O Fixed O Notice Call Notice Days Daily Refinance Rate Preferences Rollover A m Update Limits Count Treat Special Amount Rollover Amount pRa AS Liquidation Amount 3 y C Liquidate Overdue ERollover Detail Maximum Rollover Amount Schedules ollover Details O Ignore Apply Tax On Rollover Rollover Status Complete Amount New Components Allowed C Apply charge on Rollover Amount Parent Reference Profit Basis a
154. me of processing the deal you can indicate if a rollover is to be automatic or manual the maturity type fixed call or notice the maturity date for a fixed maturity deal and the notice days You should also indicate if e Only the outstanding principal is to be rolled over e The outstanding principal is to be rolled over with profit e Ifa special amount is to be rolled over If a part of the principal and profit from the old deal has been liquidated and only the outstanding principal with or without profit is rolled over it is called a special amount ce ORACLE when a deal is rolled over the new contract continues to have the reference number of the old deal 7 2 Specifying Rollover for a Murabaha Product When defining a product you have to specify whether deals involving the product can be rolled over If rollover has been allowed for a product all the deals involving the product can by default be rolled over However a deal involving such a product will be rolled over only if it is not liquidated on its Maturity Date You can choose not to rollover a deal that involves a product with the rollover facility You can indicate this when processing the deal 7 2 1 Mode of Rollover Manual or Automatic For a deal involving a product for which a rollover is allowed you should specify the mode of rollover automatic or manual during processing 7 2 2 Impact of Liquidation Mode on Rollover The mode of li
155. month end Now you have a 15 month borrowing beginning January 1 1998 and ending March 31 1999 Suppose you want to define four quarterly schedules and three monthly schedules for profit repayment of this finance these are irregular schedules and the Number field assumes importance here oe ORACLE Here for the component profit you have to give the Start Date as March 31 1998 the frequency as quarterly and the unit as 1 The number of such schedules will be four Hence your quarterly schedule dates will be calculated as March 31 1998 Start Date June 30 1998 September 30 1998 December 31 1998 You have to specify for the same component the profit the Start date as January 31 1999 the frequency as monthly the unit as 1 and the number as 3 if you want to fix three monthly repayment schedules after December 31 1998 They will be calculated as falling due on January 31 1999 February 28 1999 March 31 1999 5 9 Redefining Schedules Repayments that are scheduled for a date later than today can be redefined This redefinition can be done even after the deal has come into effect and a few schedules have been liquidated However schedules with a date earlier than today s date that are yet to be liquidated cannot be rescheduled You have to liquidate them through the Manual Liquidation function Aging analysis and compensation processing will be done on such overdue schedules if they are borrowings
156. mou Deposit Account Commitment Uncovered Amount Brokerage Events Profit Settiement Tax Mis Change Log Split Effective Profit Rate Holiday Currency Revision Details Advice Code Commodity Tracking Input By Authorized By Contract Authorized a Exit Date Time Date Time Status _ext seo ORACLE In this screen you can see the following details for the component e Due date of the Schedule e Amount Due as of the due date e Amount liquidated against the schedule 5 11 Viewing Revision Schedule Details When you click Revision Details button in the Contract On line Schedule Definition screen you will see the Revision Schedule Details screen Here you can view the details of the revision schedules for a particular deal Revision Schedule Details EAEE GSE a Component Revision Date Applied Revision Schedules In this screen you can see the following details for the component e The revision date and e Whether it has been applied 5 12 Making Manual Payments The various components in a deal can be liquidated either automatically or manually The mode of liquidation of each component is specified at the time of defining a product and then again at the time of deal processing An automatic liquidation is done on schedule payment days by the Automatic Contract Update program Even if you have defined a deal with automatic liquidation you can liquidate it manually
157. n Amount C User Reference in Accrual Level Product Messages Contract Fields Maker Date Time Checker Date Time Mod No Record Status Authorization Status System Date If you specify that processing of automatic events should be done upto the System Date automatic events scheduled till inclusive of the current system date will be processed Example Assume today is October 20 1997 and October 21 1997 and 22 October 1997 are holidays If you specify that processing has to be done till the system date during the Automatic Batch Update function run the system will process only the events scheduled for October 20 1997 The events scheduled for the holidays that is October 21 1997 and October 22 1997 will be processed during the Automatic Batch Update function run during beginning of day operations on October 23 1997 1E ORACLE Next Working Day 1 You can indicate whether events should be processed till the day before the next working day when the Automatic Batch Update function is run If you do so all the events that fall on days between the current system date and the next working date will be processed Example Assume that today is October 20 1997 and October 21 1997 and October 22 1997 are holidays If you specify that processing has to be done till the day before the next working day when you run the Automatic Batch Update function during end of day processing on October 20 1997 all the event
158. n Tuna Authorized By Contract Status Date Time Section Screen Preferences Contract Preferences screen Schedules Contract Schedule Definition screen Rollover Contract Rollover screen Linkages Contract Linkages screen 4 2 Reporting Details Amount Outstanding Amount Reverse Reference External Reference MIS Change Log Split Effective Profit Rate Holiday Currency Revision Details W Authorized Date Time ORACLE 4 3 Features of the Contract Details Screen Every product that is created in your bank is endowed with certain general attributes A deal that you enter into acquires the general attributes defined for the product it involves To recall a product is endowed with the following general attributes The product code description slogan start and end date for the product and remarks The frequency of profit accrual The tenor limits for the product The liquidation mode manual or automatic Whether a deal involving the product can be rolled over into a new deal if it is not liquidated on its Maturity Date Whether the accrued profit of earlier placement s should be considered as part of the utilized amount while tracking credit utilization for a customer Whether tax has to be applied Whether brokerage has to be applied The exchange rate variance For a special customer you can choose to apply a rate that is greater than the standard exchange rate defined for the c
159. n disallow rollover for the deal If rollover has been disallowed for a product you cannot rollover deals involving the product For rollover to be applicable for the deal it has to be defined for the product Count You will see the rollover count in this screen For a deal that has been rolled over this count indicates the number of times it has been rolled over Tax Scheme The tax scheme which has been specified for the product will be displayed in this screen The tax scheme cannot be changed at the time of deal processing Internal Remarks You can enter information describing the deal that you are processing This will be available when you retrieve information on the deal However this information will not be printed on any advice printed for the customer s benefit This information will be displayed whenever you retrieve information on the deal either as a display or in print 4 4 Stating Preferences for a Deal Preferences are options For instance for a product you have the option of e Making liquidation automatic or manual e Allowing or disallowing rollover e Applying tax or waiving it e Applying prepayment compensation or waiving it For a contract you have the option preference of e Liquidating automatically or manually the principal of the deal being input This defaults from the product but you can change it for a specific deal e Verifying of funds in case of automatic liquidation of repayment sche
160. ng Notice Generation No accounting entries allowed for this event Advices Advice Name Description BILLNOTC Billing Notice SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 16 ORACLE 10 5 3 9 REVC Reversal Accounting Entries No accounting entries allowed for this event Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 3 10 REVN Rate Revision Accounting Entries No accounting entries allowed for this event Advices Nil 10 5 3 11 ROLL Rollover Accounting Entries Accounting Role Amount Tag Dr Cr Indicator CUSTOMER INTER_LIQD Debit INTER_REC INTER_LIQD Credit ASSET GL INTER_ROLL Debit INTER_REC INTER_ROLL Credit ASSETGL PRINCIPAL_LIQD Credit CUSTOMER PRINCIPAL_LIQD Debit CUSTOMER PRINCIPAL_LIQD Debit ASSETGL PRINCIPAL_LIQD Credit CUSTOMER lt Profit_Component gt _LIQD Debit Interest_componentREC lt Profit_Component gt _LIQD Credit ROLL_WASH PRINCIPAL_ROLL Debit ASSETGL PRINCIPAL_ROLL Credit ROLL_WASH lt Profit_Component gt _ROLL Debit 10 17 ORACLE Accounting Role Amount Tag Dr Cr Indicator Interest_componentREC lt Profit_Component gt _ROLL Credit Advices Advice Name Description LD ROLL _ADV Rollover Advice 10 5 4 MMM Borrowing with Fixed Bearing Profit The preferences set for this product are as fol
161. ng information such as the ERI information in this screen For a larger picture of the manner in which Oracle FLEXCUBE handles the Euro please refer to the chapter Handling the Euro in the user manual of the Core Services module 5 17 2 Suppressing Messages Settlement messages defined for components that fall due will be generated automatically when you execute the Settlement Generation function at the end of day You can suppress the generation of the settlement message defined for a component by clearing the check box in the Gen Message field in the Contract Settlement Message Details screen oR ORACLE 5 17 3 Viewing the Schedule Breakup Details In the Schedule Payments screen you will see a row of icons Click BreakUp to view the Schedule Breakup screen Schedules a Component Due Date Amount Due Amount Paid You will see the following in this screen 5 17 4 Schedule Payment Component In this screen you can see the schedules being paid on account of this particular payment for which you are doing manual liquidation The component getting paid is displayed 5 17 5 Schedule Payment Due Date The due date of the component being liquidated is displayed Example Consider the borrowing by Cavillieri and Barrett Finance Corporation A Profit payment of USD 10 000 was due on October 1 1997 Another payment of USD 15000 was due on October 15 1997 Now the bank repays USD 12500 on Octob
162. ng is initiated on September 15 1997 and the frequency of repayment is weekly If the Reference is specified as Value Date the next weekly schedule date will fall due on September 22 1997 September 30 1997 and so on till Maturity If the Reference is specified as Calendar Date and the Start Date is fixed as October 1 1997 the first repayment date will be October 1 1997 The subsequent repayment dates will be October 8 1997 October 15 1997 and so on If Reference is set to Value Date deal initiation date you need to specify only the Frequency monthly quarterly and so on and the unit of frequency if you specify the frequency as weekly and the unit as 1 it means once a week The system will set the schedule according to the Frequency and Unit of Frequency you have specified beginning on the Value Date Example If the Value Date of a borrowing is December 10 1997 and you indicate the frequency as weekly and unit as 1 then the first schedule will be liquidated on December 17 1997 the next one on December 24 1997 and so on 5 4 3 Specifying the Frequency of Schedules For a periodic schedule you can indicate the frequency of repayment for each component This could be e Daily e Weekly e Quarterly e Half yearly e Yearly e Bullet By default the frequency will be Bullet meaning all the repayments will be made on maturity If the frequency is defined as Bullet you cannot enter a value into the subsequent fie
163. ng the other Details of a Deal Using the buttons that are displayed in the Contract On line screens you can view the following details of a deal e The settlement details e The tax details e The advices that you can suppress or prioritize e The MIS details e The ICCF details e The events for the deal e The accounting entries for the deal e The brokerage details e The commodity details Sey ORACLE 4 9 Advices for deal initiation The advices that have to be generated for any event during the life cycle of a deal are specified for the product involved in the deal For example you may have specified the following advices for the product e When a deal is initiated an advice addressed to the customer e f any components like discounted profit tax on principal and so on are liquidated on takedown an advice for each of them While processing the deal initiation you can do the following e Suppress the generation of any of these advices e Specify the priority of generation In the Message Details screen you can make these changes Message Details Reference Number Message View d Message Type Receiver Currency Amount Leg Reference Customer Name Media Print v Address Exception oo ORACLE Suppress By default all the advices that have been defined for a product will be generated for a deal However you can suppress the generation of an advice for a deal
164. ngle new contract when rolled over using the rollover operation Accordingly select any of the options Normal Split or Consolidated in this field as applicable 7 5 7 Rolling Over a Deal with Profit or without Profit If you have indicated for the product that a deal is to be rolled over with profit at the time of deal processing you can specify that only the outstanding principal has to be rolled over The deal is renewed without the profit only when all the outstanding profit is paid out by manual or automatic liquidation Hence if you have specified for the product that only the outstanding principal of the deal should be rolled over and you find that the outstanding profit has not been liquidated on this particular deal under process you can specify through this screen that the rollover be made along with the outstanding profit This can be illustrated with the help of an example Example Take the case of Cavillieri and Barrett Finance Corporation who has made a placement of USD 100 000 on June 1 1997 at 20 profit the placement was to be liquidated at Maturity on December 31 1997 but at your customer s request you decide to renew it roll it over You have two options e You can roll it over without profit e You can roll it over along with the profit Now Cavillieri and Barrett Finance Corporation decides to pay back USD 11 670 on December 31 1997 the Maturity Date of the placement The entire profit component is liq
165. ning the product that a back dated deal with repayment schedules prior to today s date the schedules have to be liquidated when the deal is initiated the same will apply to the deal you are entering However through this screen you can choose not to liquidate back valued schedules a ORACLE 5 6 2 1 When the Repayment Schedule Date is a Holiday You have specified that repayment schedules should be generated automatically once you indicate the frequency number and the date of first repayment When the system computes the repayment dates based on these values there is a chance that one or more schedules fall due on a holiday In such a case you have two choices e Ignore the holiday and retain the schedule due date e Move it either backward or forward by specifying so If you specify that holidays are to be ignored the schedule dates will be fixed without taking the holidays into account In such a case if a schedule date falls on a holiday the processing of such a schedule is determined by your holiday handling specifications for automatic processes in the Branch Parameters screen e f you have specified that processing has to be done on the previous working day for automatic events right up to the day before the next working day the schedule falling on the holiday will be liquidated during end of day processing on the previous working day e f you have specified that processing has to be done only up to the System Date then
166. nt contracts The status value for Placement contracts is as given below Events Commodity Tracking Status BOOK Booking a contract Waiting for offer OFFR Offer received and accepted Offer Received and Accepted GRNT Receipt of the letter of the guarantee Closed The status value for Borrowing contracts is as given below Events Commodity Tracking Status ORACLE Events Commodity Tracking Status BOOK Booking a contract Offer to be sent OFFR Offer is sent Offer Sent GRNT Guarantee is sent Closed Contracts that require commodity tracking will be initiated or activated only when the status is Closed If you do not select this option for a product the Commodity Tracking Status will be Not Applicable You can view the commodity details in the Commodity Tracking screen invoked from the Contract Online screen For more details refer the Processing a Murabaha MM Deal chapter of this User Manual Book Unearned Profit You can opt to do an upfront booking of the unearned profit if required However this is applicable only for the Main profit component If you select this option the system will trigger the UIDB event Upfront Profit Booking along with the INIT event The computation of upfront profit is done differently depending on the profit rate type whether fixed or floating as follows e F
167. nt Discount Expense EIMPREMRIA Effective Int Premium to be Accrued EIMPREMINC Effective Int Premium Income EIMINTADJREG Effective Int Par Receivable CUSTOMER Customer Component_UID Deferred income GL for booking the unearned profit amount List I Acct Roles for a Placement product In addition to these you can define amount tags as per your requirements for profit and charges that will be attached to the product Below we have provided two separate lists of sample accounting roles List contains accounting roles that can be set up for a Placement product List II contains samples of accounting roles that are applicable for a Borrowing product Accounting Role Description Role Type BROKEXP Brokerage Expense Expense BROKPAY Brokerage Payable Liability BROKPIA Brokerage payable in advance Asset ASSETGL Asset GL for Placements Asset FWDASSETGL GL for Future Dated Placements Contingent Asset FWDASSETOFF Offset for Future Dated Placements Contingent Liability INTERINC Fixed Profit Rate Income 10 3 ORACLE Accounting Role Description Role Type INTERRIA Fixed Profit Rate Liability PENL1INC Penal Int on Ovd Principal Income PENL1REC Penal Int on Ovd Principal Asset CHARGING Common Flat Amt W o Slab Income ComponentUNRL Unrealized Income Income ROLL_WASH Bridge account to wash
168. o your specifications e Automatically generates the specified messages and advices Using Oracle FLEXCUBE you can process Murabaha money market deals with fixed floating or period profit rates and with a variety of profit application methods You can also define bullet schedules for all components Oracle FLEXCUBE allows you to define brokerage on a cumulative or slab basis for each currency or currency pair You can automate liquidation of brokerage according to the preferences defined for your broker a ORACLE The transfer of funds between parties is always confirmed and corroborated with the exchange of messages advices or receipts When defining a product in the MMM module you can specify the advices and messages that should be generated at different events such as profit liquidation and rollover in the life cycle of deals involving it Once an event defined for message generation occurs in a deal the system automatically generates the advices or notices in the media that you specified You can configure the format and the contents of the advices to suit you requirement 2 4 Settling Murabaha Money Market Deals All scheduled component and maturity settlements are handled automatically in Oracle FLEXCUBE by calling the Settlement and Messaging sub systems Further you can generate online all payment transfer messages to correspondent banks together with related settlement accounting entries In keeping with its flexible desi
169. od Actual 365 And since the utilized amount is above his central liability limit USD 110 000 he will not be eligible for the second deal of USD 10 000 However if you have opted not to track the accrued profit on his deal then he will be eligible for the second deal of USD 10 000 as only the principal amount will be considered as the utilized amount If you opt to Track Accrued Profit then the profit accrued on deals will be added on to the amount utilized by the customer for credit administration The utilization will be shown as the sum of the principal and the accrued profit in the reports generated by the credit administration Limits sub system Outstanding profit if any will also be shown in these reports Tax Applicable As part of the preferences that you define for a product you can specify whether any tax is applicable for the MMM product that you are creating If tax is specified for a product you can waive it for specific deals However if you specify that tax is not applicable to a product you cannot levy tax on any deal involving the product Forward Dating Allowed The Value Date That is the date on which it is initiated for a deal can be e the date on which it is input e adate in the past e a date in the future You should indicate whether a deal involving a product could have a value date in the future A deal can have a value date in the future only if you have allowed it for the product th
170. of the agreement that you associate with the contract Quantity Units Specify the unit in which the commodity is measured You cannot modify this information if the Commodity Tracking Status is Closure Quantity Specify the quantity to be purchased You cannot modify this information if the Commodity Tracking Status is Closure Purchase Price By default the principal amount of the transaction is displayed as the purchase price of the commodity You will not be able to change this value The currency of the purchase amount is also displayed Purchase Unit Price Based on the quantity of the commodity purchased and the purchase price the system arrives at the unit price Purchase Price Quantity The currency of the amount is also displayed TER ORACLE Sale Price By default the system displays the sum of principal amount and profit of the transaction You will not be able to change this value The currency of the amount is also displayed Sale Unit Price Based on the quantity of the commodity sold and the sale price the system arrives at the unit price Sale Price Quantity Location Specify the place of the trade that is the place where the sales and purchases of the commodity occurs Counter Party Specify the name of the counterparty associated with the trade Payment Instructions Here you can capture payment instructions for the trade You cannot modify this information if the Commodit
171. ole pertains to unrealized income expense the head for the accounting role will be replaced by the previous year adjustment GL while passing accounting entries In case a contract spans over multiple years any event Back dated Rate revision Principal Change back dated booking of contract and so on which causes the accrual balances of the previous year to be recomputed the accrual entries will be posted to the current year unrealized income and expense GL only This movement of balance is applicable only for components that require accruals 10 22 ORACLE 10 6 1 OFFR Offer Acceptance of Offer Accounting Entries Nil Advices Advice Name Description MM_OFFER MT199 for MM Borrow contracts MM_ACPT_OFFER MT199 for MM Placement contracts 10 23 ORACLE 11 Reports 11 1 Introduction The report programs available under the Islamic Money Market module are explained in this chapter The details that you have maintained under this module are stored by the system You can extract such details in the form of meaningful reports when you require them 11 2 Accrual Control Report This report provides a summary of the accrual control as of a selected accrual processing date To invoke the Accrual Control Report screen type MCRPACCR in the field at the top right corner of the Application tool bar and click the adjoining arrow button Accrual Control Report Accrual Proces
172. omponent Basis Rate Type ode Usage mi lt rs s Commodity Tracking 7 5 Features of the Contract Rollover Screen The following are the features of the contract rollover screen 7 5 1 Specifying Rollover Details of Profit Charge and Fee While specifying the rollover details for the product you may have indicated one of the following e Rollover details should be picked up from the product for the deal being renewed e Rollover details should be picked up from the old deal TRIR ORACLE Example Assume that while defining a product you specified that all placements involving it will have profit schedules every month and a processing fee You have processed a placement involving this product and that placement has been defined with profit payment only on Maturity Date No fee has been specified Now at the time of rollover of this specific placement you have two options e You can indicate that the profit charge and fee details specified for the product should apply to the new rolled over placement In such a case the new placement will have profit payment schedules every month anda processing fee e You can specify that the profit charge and fee details defined for the placement being rolled over old placement should apply to the new one In such a case the new placement will have only one profit payment schedule on Maturity and will have no processing fee If by default according to your specificati
173. on East Mumbai Maharashira 400 063 India Worldwide Inquiries Phone 91 22 6718 3000 Fax 91 22 6718 3001 www oracle com financialservices Copyright 2007 2012 Oracle and or its affiliates All rights reserved Oracle and Java are registered trademarks of Oracle and or its affiliates Other names may be trademarks of their respective owners U S GOVERNMENT END USERS Oracle programs including any operating system integrated software any programs installed on the hardware and or documentation delivered to U S Government end users are commercial computer software pursuant to the applicable Federal Acquisition Regulation and agency specific supplemental regulations As such use duplication disclosure modification and adaptation of the programs including any operating system integrated software any programs installed on the hardware and or documentation shall be subject to license terms and license restrictions applicable to the programs No other rights are granted to the U S Government This software or hardware is developed for general use in a variety of information management applications It is not developed or intended for use in any inherently dangerous applications including applications that may create a risk of personal injury If you use this software or hardware in dangerous applications then you shall be responsible to take all appropriate failsafe backup redundancy and other measures to ensure i
174. on the principal of the rolled over deal 7 5 9 Automatic Rollover of a Contract You can roll over a deal automatically or manually The Automatic Contract Update function automatically rolls over a deal on its maturity date if you have e allowed rollover for the deal at the time of defining the product which involves the deal e specified auto in the contract details screen If you have marked a deal for auto liquidation and auto rollover the system liquidates the original deal and creates a new rolled over deal on the maturity date of the original deal This is done by the Automatic Contract Update function during its Beginning of Day run If the Maturity Date falls on a holiday then the liquidation and the rollover will be processed as per your holiday handling specifications in the Branch Parameters screen e f you have specified that processing has to be done today the last working day before the holiday for automatic events right up to the day before the next working day the schedule falling on the holiday will be liquidated during end of day processing on the last working day before the holiday e f you have specified that processing has to be done only up to the System Date today then only the events scheduled for today the last working day before the holiday will be processed The events falling on the holiday will be processed on the immediate working day after the holiday during beginning of day processing If
175. oney Market Module is a snapshot of the features that the module provides Chapter 2 Defining the Attributes of a Murabaha Money Market Product talks about defining the attributes specific to setting up a Murabaha Money Market product Chapter 3 Processing a Murabaha MM Deal describes the processing of Murabaha Money Market deals Chapter 4 Processing Repayments explains how repayment schedules are defined and liquidated Chapter 5 Making Profit Rate Changes describes value dated changes to a Murabaha Money Market deal Chapter 6 Rolling Over a Deal describes how Murabaha Money Market Deals are rolled over A ORACLE Chapter 7 Automatic Processing discusses the features of the Automatic Contract Update function Chapter 8 Customer Correspondence explains the advices and messages that you can generate in the MMM module Chapter 9 Annexure A Accounting Entries and Advices for the Murabaha MM Module gives an event wise listing of suggested accounting entries and advices that can take place during the life cycle of the Murabaha MM module Chapter Annexure B Accounting Entries and Advices for the Murabaha MM gives the 10 suggested accounting entries that can be set up for Murabaha MM Module Chapter Reports available under the Islamic Monet Market are explained in this chapter 11 1 4 Related Documents You may need to refer to any or all of the User Manuals wh
176. ons they are to be picked up from the product details and applied to the new deal rolled over deal you can indicate here that they are to be taken from the old deal itself and not the product and vice versa 7 5 2 Updating Credit Limit Utilization When creating a product you can indicate if credit limit utilization is to be updated at the time of rollover Your specifications for the product will default to all placements involving the product When you specify that the credit limit utilization has to be tracked the profit that has been accrued on a placement will also be considered as a part of the utilized amount for the purpose of risk tracking While creating a product you can choose not to update the credit limit utilization at the time of rolling over deals involving the product However note that if you if you have disallowed the updation of utilization for a product you cannot choose to update utilization when you rollover deals involving the product 7 5 3 Applying Tax When you define a product you can specify if tax has to be applied on rolled over placements involving the product For tax to be applicable on a rolled over deal e It should be applicable to the product involving the deal e It should not have been waived for the old deal If you have said it is to be applicable to the rolled over deal through this screen you can waive it for the rolled over contract 7 5 4 Indicating the Rollover Tenor T
177. ontract Update function when you run it at the beginning of day The billing advice is generated for the mail medium This notice will be generated for repayment of all components If you have specified that a notice is to be generated on a certain day and it happens to be a holiday then the notice is generated depending on your holiday handling specifications in the Branch Parameters screen e f you have specified that automatic processes are to be carried out up to the next working day the notices slated for generation on the holiday will be generated during end of day processing on the last working day before the holiday e f you have specified that the automatic processes are to be carried out only till System Date today s date notices slated for generation on the holiday will be generated on the next working day immediately after the holiday during beginning of day processing Example Assume that while entering into a contract with Ms Yvonne Cousteau you specified 10 days here If today is June 20 1997 and June 21 1997 is a holiday the notices will be generated for payments due on June 30 1997 during BOD on June 20 1997 The notices meant for July 1 1997 will be generated during end of day processing on June 20 1997 if you have specified that all automatic processes falling due right up to the next working date are to be processed on the System Date today s date If not the notices meant for July 1 will be genera
178. or fixed profit types the upfront profit is computed as the total of the profit to be collected over the contract tenor e For floating rate types with periodic rate revision profit is computed as the profit collected till the next revision date e For different rate revision and payment frequency profit is calculated upto the next revision date only If you select this option the system will validate to ensure that the main profit component is not defined with the following parameters e Rate Type as Floating e Code Usage as Automatic The system will post adjustment entries if any of the following operations affects the unearned profit amount e Revision of profit rates e Value Dated amendment to contracts e Changing the schedules for a contract e Rollover of a contract wy ORACLE For details on the various events and event wise accounting entries and advices applicable during an MM contract life cycle refer Annexure A of this User Manual 3 2 1 1 Setting the Accrual Frequency Details Apart from the principal you can have other components for a deal The other components of a deal could be the profit charge or fees and they can be accrued over the tenor of the deal before being realized into the income or expense account You can define the frequency at which you would like to accrue these components as part of the preferences that you specify The attributes of these other com
179. ou can make changes to the acquired profit through this screen Waiver The attributes of a profit component that have been defined for a product will be applied on a deal involving the product If for some reason you do not want to apply the profit component for the deal you are processing you can do so by checking this field The profit will be calculated but it will not be applied on the deal For back valued changes in profit rate the system takes corrective action Accruals will be redone till the last accrual date Also in case of a back valued change the value date should not be beyond the last liquidation date 6 3 Settlement Instructions If you want to make changes to the settlement accounts and the currency conversion rates you will have to invoke the Contract Input screen and go to the Settlements screen by clicking the Settlements button Settlement Details Reference Number g Component J Account Details Message Details Parties Parties Cover Parties Other Details Clearing Details Local Clearing IBAN Account Number Settlement Details a Component Currency Branch Account Account Currency DriCr Original Exchange Rate Exchange Rate Settlement Direction D Debit Component Description C Credit Signature Verification oF ORACLE 6 4 Deleting Value Dated Changes You can delete the value dated changes that you have made on a deal provided e The chan
180. ou extend the Maturity Date of a deal the time code of the credit line to which the deal is linked should be beyond the new Maturity Date If not the system will seek an override The new Maturity Date will be applicable to the deal from the Value Date of the deal Making Changes in the Credit Line When you make changes in the Credit Line the Central Liability tracking for the deal will be done against the new line The Value Date and Maturity Date will be taken into consideration during the time code calculation of the deal Making Changes in Profit If you want to make value dated changes in the profit rate the rate code the spread or the profit amount you have to invoke the Contract Profit Charge and Fee screen of the ICCF module through the Value Dated Changes screen You can make value dated changes only to the following components in the Contract ICCF screen Profit Rate Enter the new profit rate However you will not be able to e Change the profit rate if you have defined zero profit for the deal e Change the profit type Rate code If a floating type of profit has been defined enter the new rate code ee ORACLE Spread Enter the new spread here Profit Amount Enter the new profit amount Acquired Profit If the deal was already initiated when it was input the profit amount that has been accrued should be entered here The amount will be taken into account by the system during the next liquidation cycle Y
181. pecified for the deal the account specified for the deal will take precedence The settlements processing is enabled only if Allow Corporate Access has been checked while defining branch parameters in the Branch Parameters Detail View screen e If Allow Corporate Access is checked for a fund branch and the fund is Portfolio type then during settlement processing the settlement account is chosen based on the settlement instructions maintained for the counterparty e If Allow Corporate Access is not checked for a fund branch settlement processing is disabled and the settlement account remains as a fund branch account maintained for the fund e Ifthe corporate account exists in a different branch the Inter branch account GL maintenance is used for resolving the bridge account oe ORACLE Booking Date The date on which the deal details are entered would be displayed in this screen This defaults to the system date today s date This date is for information purposes only The accounting entries are passed as of the value date of the deal initiation date of the deal Amendment to this field will be considered a financial amendment Value Date This is the date on which a deal takes effect The accounting entries for the initiation of the deal will be passed as of this date The tenor of the deal will begin from this date and all calculations for profit and all the other components based on tenor will be mad
182. plied on the new deal if it is waived on the old deal it will not be applied on the renewed deal Specify Deduct Tax on Rollover if tax on the old deal has to be liquidated before it is rolled over If Rollover is of type P Principle P I Principle Profit and P I T Principal Profit Tax then the tag 32H in MT 320 is populated with a value O Zero If Rollover Type is Special Amt the tag 32H will be populated with difference in Principal Profit liquidated in the same cash flow 7 3 7 Specifying the Rollover Mechanism This indicates whether rolling over a contract using the product must create a new version of the existing contract a new contract or a chills contract that can be linked to the parent contract You can choose from the following options e New Version e Spawn Contract e Linked Contract You can select Linked Contract only in case you have checked the option Auto for rollover 7 3 8 Capturing the Rollover Method If you have indicated the rollover mechanism applicable for contracts using the product in the Rollover Mechanism field as Spawn Contract you can use this field to indicate whether a single new contract must be created for the rolled over amount or whether the original contract must be split into multiple contracts or consolidated with other contracts into a single new contract when rolled over using the rollover operation Accordingly select any of the options Nor
183. ponents are defined in the ICCF sub system of Oracle FLEXCUBE For components that have been marked for accrual the frequency is specified in this screen Product Preferences screen When you run the Automatic Contract Update function at the end of day the system carries out the accruals according to the frequency that you specified However if the accrual date falls on a holiday then the accruals will be done as per your holiday handling specifications in the Branch parameters screen That is e f you have specified that automatic events are to be processed for a holiday s on the working day before the holiday the accruals falling due on a holiday s will be processed during end of day processing on the last working day before the holiday e f you have specified that the automatic events are to be processed for a holiday s on the working day following the holiday the automatic events falling due on a holiday s will be processed on the next working day during the beginning of day processing The frequency can be one of the following e Daily e Monthly e Quarterly e Half yearly e Yearly In the case of monthly quarterly half yearly or yearly accruals you should specify the date on which the accruals have to be done For example if you specify the date as 30 accruals will be carried out on the 30th of the month according to the frequency that you have defined If you want to fix the accrual date for the last working
184. processing has to be done today the last working day before the holiday for automatic events right up to the day before the next working day the events falling on the holiday will be processed during end of day on the last working day before the holiday e f you have specified that processing has to be done only up to the System Date today then only the events scheduled for today the last working day before the holiday will be processed The events of the holiday are processed on the next working day after the holiday during beginning of day processing If you specify that the forward or reverse changes should not be carried out automatically the status remains unchanged till you specifically change it for a placement through the Contract Processing function At the time of processing a placement you can change the automatic mode of status change you have specified for the product to the manual mode or vice versa However this will apply to all status 8 9 4 Advices to be Generated for a Status Change You can specify that an advice is to be generated to inform the customer about the status change of the placement You can also specify the kind of advices to be generated oe ORACLE You can generate advices when the placement components move forward from one status to the next to notify the customer of the status change and possibly urge him to make the payments to liquidate the schedules that are aging The advice will be gener
185. profit that is applicable to the account current or savings will be applied e Ifthe repayment account has not been defined with overdraft the liquidation will not be processed The liquidation order is helpful when you want to liquidate the dues in a certain order say profit or profit type of components first and then the principal If the deal has been defined with Floating profit and a profit revision falls due today the revised rate will be applied before the repayment is processed ioe ORACLE 8 7 1 Advices Generated for a Repayment Advices are generated by the Automatic Contract Update function during beginning of day processing While defining a product you may have specified that an advice is to be generated to intimate the customer every time a payment has been liquidated This will apply to all deals involving the product refer chapter on product definition However for a particular deal you can suppress this advice If a repayment advice has been specified for a deal it will be generated by the Automatic Contract Update function when you run it at the beginning of day 8 8 Generation of Billing Advices A billing notice or advice can be generated for the benefit of the customer as a reminder that a payment on a placement is due When defining a product you can specify the number of working days before the repayment date when a billing notice is to be generated The notice is generated as part of the Automatic C
186. quidation of a deal automatic or manual has the following impact when the rollover is carried out Specification Treatment Auto liquidation and The old deal will be liquidated and a new one initiated on the Maturity auto rollover Date of the deal during the BOD Beginning Of Day run of the Automatic Contract Update function If the Maturity Date falls on a holiday then the liquidation and the rollover will be processed as per your holiday handling specifications in the Branch Parameters screen If you specified in the Branch Parameters screen that processing has to be done today the last working day before the holiday for automatic events right up to the day before the next working day the schedule falling on the holiday will be liquidated during end of day processing on the last working day before the holiday If you specified that processing has to be done only up to the System Date today then only the events scheduled for today the last working day before the holiday will be processed The events falling on the holiday will be processed on the immediate working day after the holiday during beginning of day processing Auto liquidation of The old deal will be liquidated automatically on the Maturity Date If the principal and deal has to be rolled over the rollover instructions should be specified for manual rollover the deal before the Maturity Date If the contract has not been liquidated because of lack of fund
187. r CUSTOMER INTER_LIQD Credit INTERPIA INTER_LIQD Debit LIABGL PRINCIPAL_LIQD Debit CUSTOMER PRINCIPAL_LIQD Credit Advices Advice Name Description SWIFT_MESSAGE MT320 MT330 MT335 MT350 MM_ROLL_ADV Rollover Advice 10 5 3 MMM Placement Fixed Bearing Profit The preferences set for this product are as follows e The payment type for this product is of Bearing type e Forward dating is allowed for the product di ORACLE 10 5 3 1 BOOK Booking Accounting Entries Accounting Role Amount Tag Dr Cr Indicator FWDASSETGL PRINCIPAL_FWD Debit FWDASSETOFF PRINCIPAL_FWD Credit Advices Advice Name Description MMCONPLA MM Placement Confirmation MM_DEAL_SLIP Deal Slip SWIFT_MESSAGE MT320 MT330 MT335 MT350 10 5 3 2 INIT Initiation Accounting Entries Accounting Role Amount Tag Dr Cr Indicator ASSETGL PRINCIPAL Debit CUSTOMER PRINCIPAL Credit FWDASSETGL PRINCIPAL_FWD Credit FWDASSETOFF PRINCIPAL_FWD Debit FWDASSETGL PRINCIPAL_FWD Debit FWDASSETOFF PRINCIPAL_FWD Credit ASSETGL PRINCIPAL_ROIN Debit ROLL_WASH PRINCIPAL_ROIN Credit ASSETGL PRINCIPAL_ADDL Debit CUSTOMER PRINCIPAL_ADDL Credit Advices Advice Name Description MM_CONT_ADV Contract Advice 10 14 ORACLE 10 5 3 3 ACCR Profit Accrual Accounting Entries
188. r details e the deal amount e the deal currency e the repayment account for the deal and so on 4 2 Invoking the Deal Input Screens The capture of disbursement details of an MMM deal involves inputs to the following screens e Contract Details screen e Contract Preferences screen e Contract Schedule Definition screen e Contract Rollover screen You can invoke Islamic Money Market Contract Input screen by typing MCDCONON in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button The screen is displayed below ORACLE Islamic Money Market Contract Input New B Enter Query User Reference Reference Number Product Code Source Contract Schedules Customer Currency Line Settlement Details Cr Dr Booking Date Value Date Original Start Date User Maturity Date Maturity Date Notice Days Intra Day Fund Id Rounding Details Rounding Rule Decimals Units Commodity Tracking Input By Once in the Contract Details screen you will see four other sections each representing a screen B Product Description P Rollover Preferences Amount Local Currency Amount Dealer Broker Liquidation Auto Manual Maturity Type Fixed Notice Call Rollover Yes No Other Details Rounding Required Truncate v Profit Period Basis Include From Date Tax Scheme Derivative Status Remarks Payment Method Onha
189. r Query Product Code laz Contract Reference Current User New Userid Product Code Specify the product for which you want to reassign the user The adjoining option list displays all the products maintained for Islamic fixed assets through the Islamic Fixed Assets Product Definition screen Contract Reference Number Specify the contract reference number for which you wan to reassign the user The adjoining option list displays all the contracts maintained for the product selected Current User Current user ID is displayed in this field New User Id Specify the new user to whom you want to reassign the contract Click Ok button to save the details you entered Click Exit button if you do not want to save the details ORACLE 5 Processing Repayments 5 1 Introduction When you make a Murabaha Money Market deal you also decide on the terms of the repayment of the placement or borrowing You may have your own repayment schemes for example you may prefer monthly repayments of profit or the repayment of the principal on maturity and so on Or you may design repayment schedules to suit the convenience of your customer Your customer may want the repayments done daily instead of every week for example In Oracle FLEXCUBE you can customize your repayment schedules for a Murabaha Money Market product The same schedules will by default apply to the deals involving the product However
190. r settings for accruals 8 11 Profit Rate Revision on a Deal The type of profit that is applicable on a deal depends on the definition of the product that it involves If floating profit rates are applicable for a product the frequency at which the changing profit rates should be applied on deals involving it will also be defined for the product The Profit Rate Type of a product can be one of the following fixed floating or special The floating profit rates are defined through the Floating Rate Definition screen A Rate Code identifies a set of rates defined for a combination of Currency Amount Limit optional and Effective Date When processing a deal you link it to the floating rate table by indicating the Rate Code The rates defined for the Rate Code will be applied on the deal or in other words the contract The rates will be applied to a deal depending on whether it has been defined with e Auto rate Code Usage all the rate changes made during the liquidation or accrual period will be considered e Periodic Rate Code Usage the rates as of a specific frequency or date will be applied ie ORACLE The Automatic Contract Update does the profit accruals for those deals for which a rate revision becomes due today whatever the way they have to be applied every time the rate changes or periodically If a fixed profit rate or amount for a deal which has been changed through the Value Dated Changes function falls due today
191. rage is not payable 10 5 2 1 BOOK Booking a Borrowing with fixed discounted profit Accounting Entries Accounting Role Amount Tag Dr Cr Indicator CHARGEXP CHARG Debit CUSTOMER CHARG Credit FWDLIABGL PRINCIPAL_FWD Credit FW DLIABOFF PRINCIPAL_FWD Debit Advices Advice Name Description MMBRKCON Broker Confirmation MM_DEAL_SLIP Deal Slip SWIFT_MESSAGE MT320 MT330 MT335 MT350 PAYMENT_MESSAGE Payment Message MMCONDEP MM Borrowing Confirmation 10 5 2 2 INIT Initiation of a Borrowing with fixed discounted profit Accounting Entries Accounting Role Amount Tag Dr Cr Indicator FRTAX1_PAY FRTAX1_AMT Credit CUSTOMER FRTAX1_AMT Debit CUSTOMER FRTAXS_AMT Debit FRTAXS_PAY FRTAXS_AMT Credit INTERPIA INTER_LIQD Debit al ORACLE Accounting Role Amount Tag Dr Cr Indicator CUSTOMER INTER_LIQD Credit LIABGL PRINCIPAL Credit CUSTOMER PRINCIPAL Debit FWDLIABGL PRINCIPAL_FWD Debit FW DLIABOFF PRINCIPAL_FWD Credit Advices Advice Name Description MM_CONT_ADV Contract Advice 10 5 2 3 ACCR Accrual of profit Accounting Entries Accounting Role Amount Tag Dr Cr Indicator INTEREXP INTER_ACCR Debit INTERPIA INTER_ACCR Credit PENL1EXP PENL1_ACCR Debit PENL1PAY PENL1_ACCR Credit Advices No advices allowed for th
192. rates the advices you have specified for the deal as during the beginning of day processes If the value dated change falls on a holiday its processing and the generation of the advice will be done as per your holiday handling specifications in the Branch Parameters screen For example if you have so specified e A future dated deal with a value date as of today will be initiated and a deal advice will be generated for the benefit of the customer If any component like discounted profit tax on principal and so on is liquidated on takedown an advice will be generated for each of them e Incase a change entered through the value dated changes function is due today and is executed an advice notifying the customer about the new terms of the deal will be generated i ORACLE e Incase a floating periodic rate that affects a deal has changed an advice notifying the customer of the new rate applicable for the deal will be generated 8 13 Triggering the Year end Batch Process for Collecting Contract Wise Data The year end batch process can be triggered to collect data pertaining to the unrealized income booked for each contract during the year You will be allowed to trigger this process only if you have enabled the Track PY PnL Adjustment option for your branch through the Preferences section of the Branch Parameters screen During liquidation the information that is collected using the batch process is used to post adjustment entries to the
193. rely has repayment schedules The amount for profit commission and fee components if they are rates will be calculated by the system automatically depending on the start date number of schedules frequency and repayment amount of the principal However an amount can be entered here for profit only if the Profit Calculation Method has been defined as Special The fee amount can be input only if itis a flat fee For finance you can define repayment schedules that e fall due at regular intervals e at irregular intervals Now if you want to define schedules that fall due at regular intervals all you have to do is for a component specify the start date the frequency the unit and the principal amount Since you would have already registered the Maturity Date of the finance for a fixed maturity type in the Contract Details screen the schedules would automatically be spread out into equal intervals Based on this information the system calculates the dates on which the repayments or profit revisions fall due Example Consider the following details for a deal A borrowing of USD 100 000 comes into effect on January 1 1998 and matures on October 31 1998 Suppose you want to have 10 monthly schedules for principal repayment you have to specify the Start Date as January 31 1998 the frequency as monthly the unit as 1 and the principal amount as 10 000 The schedules would be spread out over 10 months and would fall due every
194. rence No 0003P02973630001 AU1002 AU1002SW Jayanagar 4th Block Bangalore India The Details of the Schedules falling Due as follows COMPONENT DUE DATE AMOUNT MM INT PLACEMENTS 31 JAN 98 271 50 AUD PRINCIPAL 31 JAN 98 21 560 00 AUD oe ORACLE THIS IS A COMPUTER GENERATED ADVICE NO AUTHORIZED SIGNATURE IS REQUIRED 9 2 Payment Messages Payment messages or SWIFT messages are generated at takedown for placements and at the time of contract maturity and profit liquidation for deposits Swift confirmation message MT320 is generated for contracts whose maturity type is FIXED and for contracts with maturity type NOTICE Swift confirmation message is MT330 is generated The format of the messages depends on the type of deal entered into The contents of the messages are taken from the Contract Input screen 1 FOLANBKUSWAXXXX1111111111 2 I324RU1000SWXXXXN 4 20 000MB05993630002 21 000MB05993630002 22 MATURITY ANBKWA0015RU10SW 230 991229 32R 000101GBP10000000 gt 34P 000215GBP177610 5 37F 15 ADVANCE pie ORACLE 10 Annexure A Accounting Entries and Advices for the Murabaha MM Module 10 1 Introduction This section contains details of the suggested accounting entries that can be set up for the Murabaha MM module of Oracle FLEXCUBE The details of the suggested accounting entries are listed event wise
195. rization of all unauthorized money market deals from the Unauthorized Contracts screen Invoke this screen from the Application Browser by typing CSDUAUTH in the field at the top right corner of the Application Browser and click the adjoining arrow button Unauthorized Contracts Module v C lgnore Overrides Fetch Unauthorized Contracts Generate Messages E Contract Reference User Reference Counterparty Customer Name ol l al i lt Settlement Details ull Amount Tag Tag Currency Branch Account Pay Receive intermediary Reimbursement Institution Authorize In the Unauthorized Contracts screen you can indicate the following parameters e The module Finances MMM or FX whose deals or contracts have to be authorized On selection of the module all unauthorized deals or contracts pertaining to that module will be displayed in the grid e Whether the system should ignore the overrides generated at the time of authorization If the overrides of the deals are not authorized system displays an error message Check against Ignore Overrides to ignore the overrides associated with the contracts vee ORACLE For example if the maturity date of a contract is December 30 2001 and is a holiday for your bank system will display an override 30 DEC 2001 is a holiday However you can opt to ignore such overrides by checking against Ignore Overrides
196. rket IMM product in the Islamic Money Market Product Definition screen You can invoke this screen by typing MCDPRMNT in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button In this screen you can enter basic information relating to a Islamic Money Market product such as the Product Code the Description and so on Main Screen New 5 Enter Query Product Code Product Description Product Type Description Slogan Product Group Product Group Description Start Date End Date Remarks Maker Date Time Checker Date Time Record Status Authorization Status For a Murabaha Money Market product you can define other generic attributes such as branch currency and customer restrictions and so on by clicking on the appropriate icon in the horizontal array of icons in this screen In addition to these generic attributes you can define attributes specifically for a money market product These attributes are discussed in detail in this chapter For further information on these generic product attributes please refer the following Oracle FLEXCUBE User Manuals under Modularity e Product Definition a ORACLE e Profit e Charges and Fees e Tax e User Defined Fields e Settlements 3 1 1 Defining a Money Market Product A product is defined by setting the following attributes Product Code Enter a unique code to identify the product throughout the module Th
197. rom the following e Placement e Borrowing Product Code Specify product type for which you want to generate the report oe ORACLE Contract Currency Specify the contract currency of the contracts that you need to include in the report Customer Specify the customer number whose contracts you need to include in the report From Value Date Specify the start date of the value date range To Value Date Specify the end date of the value date range Maturity Type Select the maturity type from the drop down list From Schedule Date Specify the start date of the schedule date range To Schedule Date Specify the end date of the schedule date range Liquidation Mode Specify the liquidation mode The system will generate the report based on the liquidation mode maintained Non Maturity Schedule Specify whether to include non maturity schedule or not Click OK to generate the report 11 10 1 Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads Header The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page number BAG ORACLE Body of the Report Field Description Call Contracts Customer The ID of the customer Contract Reference Th
198. s Murabaha Money Market function around a Core consisting of the Security Management System the Limits Service the Management Information System etc This architecture eliminates replication of commonly accessed information in every module Information that is common to several modules is maintained in the Core of the system for example currency related information This is accessed by front end modules such as MM MMM FX LC BC Finances Deposits and so on The architecture thus ensures that all front end modules use reliable and consistent data drawn from the Core Oracle FLEXCUBE s architecture also ensures that you can constantly monitor real time your exposure Crucial services such as Limits reside at the Core of Oracle FLEXCUBE This means that your liability towards a customer is tracked real time across front end modules 2 1 3 Quick and Easy Retrieval of Information The facility to retrieve accurate information quickly is a key benefit that Oracle FLEXCUBE offers Oracle FLEXCUBE supports standard financial reports In addition you can customize reports to suit your specific requirement You can generate these reports at any time during the day The powerful query facility that Oracle FLEXCUBE offers is another useful management tool This facility not only functions as a search tool you to drill down to the very details of a contract or transaction it retrieves information along the select criteria that you specify
199. s in the repayment account you can give rollover instructions even after the maturity date saying that the contract has to be rolled over as of the maturity date Manual liquidation Rollover has to be manual The deal will not be liquidated by the Auto of principal Liquidation function You can either liquidate it or specify that it has to be rolled over This can be specified at any time before or after the Maturity a ORACLE Specification Treatment Date of the deal if the contract has not yet been liquidated If you have defined that the deal be liquidated manually you cannot roll it over automatically When a deal is rolled over or renewed for the profit charge or fee components it can assume the attributes of the e Product involving the deal being rolled over e Old deal itself You can specify this at the time of deal processing of the old deal You can specify the rollover details for the product you are defining by invoking the Product Rollover details screen using the Rollover Details button in the Product Preferences screen Rollover Details Product Product Description Rollover Apply Tax Rollover With Interest Update Utilization Deduct Tax on Rollover Rollover Auto Manual Qo oc go ICCF Rollover ICCF Rollover Product Contract Rollover Method Rollover Mechanism Roll By 7 3 Features of the Murabaha Product Rollover Details Screen The following are
200. s scheduled for October 21 1997 and October 22 1997 will be processed Tax Basis On a deal you may have to pay tax to the Government on the profit earned The tax can be paid on the basis of the following e On the liquidated amount e On the schedule amount For your branch you can specify the amount on which tax has to be applied in the Branch Parameters screen The following example illustrates how this works Example You have the following tax slab for levying tax on profit earned e Oto 5000 3 e gt 5000 to 20000 4 e gt 20000 and above 5 Now you have a placement which starts on January 1 1998 and ends on March 31 1998 It has a fortnightly profit liquidation schedule and at each schedule USD 200 is liquidated Tax on schedule amount Now if you indicate that the tax basis is to be the schedule amount every time the schedule is liquidated you will have to pay 3 tax on USD 200 the schedule amount USD 200 falls into the first slab USD 6 will have to be paid every time a profit schedule of USD 200 is liquidated Tax on liquidated amount If you indicate that the tax basis is to be the liquidated amount then the tax will be calculated on USD 1 200 the total profit which will be liquidated for the placement at Maturity This falls into the second slab and hence 4 is applied on USD 1 200 This works out to USD 48 and is spread out over the six schedules That is you will have to pay USD 8 as tax every tim
201. sasesvnsnasesseiaasusebs case capa aee ea P ETA EERE EEEko EA SOETERS 8 1 8 3 lt SPECIFYING BRANCH PARAMETERS s ironte srira E oe RE E AEE EEEN E E E EAEE ESE E AEE Eei 8 2 8 3 1 Confirmation Messages is s55c5ssssnecasaasdecssnesieea seanng duavavnesaseacgssesessinssdseasesdeessone cise csbecesoceerascadessbsedouesaseis 8 5 8 3 2 Account Statement Keimer erni an i ai e aE E E e ATAR E a E Ekoa D i ieaS taea 8 5 S4 INVOKING THE BATCH PROCESS an E EE EEES ra EN EE ON SR S EEEE NET ARo SES oS 8 6 8 5 INITIATING THE AUTOMATIC CONTRACT UPDATE FUNCTION c ccccescsseessesecssesscseeesesseeesesesssesecseseeneeeese 8 7 8 5 1 Processing During Beginning of DAY sscccscccsssecesnseesseceeneeenseceeneeesseceeceecsaecseneecsaecseaeecsaeeseaeeesaeeesaes 8 7 8 5 2 Processing During End Of DGY iecacnessariin arrotik nirera kT de ooh cotta seed ves A pEi concen KESEN 8 7 6 5 3 Processing for BolidayS unsi iray iee o aR E reS a aE eT cub aeRO NE EE Ea eKA E E ERE 8 6 8 6 INITIATING A FUTURE VALUE DATED DEAL sessssessseesssssstsestreseeseseseerinssresesestsnenesreseresrenensnenseresreneseree 8 8 8 7 PROCESSING AN AUTOMATIC REPAYMENT cs ccscescsssescssecsesecseesscsesesessecesesecsessscsesssesseesssaessuesscseseeeneeeese 8 9 8 7 1 Advices Generated for a Repayment cccccsccesscesecesecesecusecaseeseeeseeseeesseeeeeesecesecusecuaecsaecsaeeaeeeaeens 8 10 8 8 GENERATION OF BILLING ADV CES sin arero es ra eS E nN ERS EEEE SEPEN ENERE I N a 8 10
202. schedules This means that if one schedule has been moved backward or forward in view of a holiday the other schedules will be accordingly shifted If you do not want to cascade schedules then only the schedule which falls on a holiday will be shifted as specified and the others will remain as they were e Specifying the holiday currency e Liquidating back valued schedules A deal inherits the attributes defined for the product it involves However for a specific deal you can change these inherited attributes to suit your requirements and those of your customer The attributes that you can change are e The liquidation of schedules that fall due before the day on which the deal is booked e The liquidation mode auto to manual e The change of status for a placement auto to manual or vice versa There are also some parameters you have to set for the repayment schedules for the deal They determine whether a schedule date falling on a holiday should be retained or moved and how it is to be moved if you opt for the latter They also determine whether funds have to be verified if a placement is marked with automatic liquidation The attributes that have been listed are discussed in detail 4 4 1 Handling a Repayment Schedule Date that Falls Due on a Holiday You have specified that repayment schedules should be generated automatically once you indicate the frequency number and the date of first repayment When the system computes the
203. screen Call The Maturity Date is not fixed The deal can be liquidated any time Notice The deal will be liquidated at a certain period of notice The number of days of notice should be specified in the screen For a deal with a Fixed Maturity this date can either be postponed or advanced through the Value Dated Changes function once the deal has been initiated Amendment to this field will be considered a financial amendment mre ORACLE Maturity Date If the Maturity Type is fixed that is the Maturity Date of the deal is known when the deal is initiated specify the Maturity Date in this screen This date should be later than the Start Date of the product If the product has a Default Tenor this date will be defaulted based on the tenor and the From Date of the contract If you change this date you should give an override when you store the deal For a deal with Call or Notice type of maturity the Maturity Date should be entered in the screen when it is known This date should be later than the Start Date of the product You can unlock the record and add the date If the product has a Default Tenor this date will be defaulted based on the tenor and the From Date of the contract If you change this date you will have to give an override when you store the deal If you have specified auto liquidation for the deal liquidation will be done automatically on that date If manual liquidation has been specified yo
204. sete enee ee eeeecetecesecusecusecuaecasecaeeeseeeaeees 9 12 9 1 12 Advice for Liquidation of Placement ccccesccesccesecese cess cnseeseeesceeseesecesecesecesecaecnaecuaecuaecsuecsaeeseeeneees 9 15 9 2 PAYMENT MESSAGES vcincsssssecasestizseossvcesns E EE storecuncesevcesurvaabunsinescedepuananeds aves 9 16 10 ANNEXURE A ACCOUNTING ENTRIES AND ADVICES FOR THE MURABAHA MM MODULE DA A E T E E A 10 1 TOT INTR DUCTI N poies aan E A E E E ETE E S N 10 1 10 2 MMM EVENTS es eran e ana a a e a a S EE S EAEE EENET 10 1 10 3 AMOUNT TAGS inen eene E Se S A A E E EE S A NOST 10 2 10 4 ACCOUNTING ROLES o ean a een oaae ESES A S E nit EE S EAEE tex 10 3 10 4 1 List I Acct Roles for a Placement Product cccccccsccesscessceseceecusecuseeaseeaeeeseeseeessenseceseenasenaeenaeense 10 3 10 4 2 List II Acct Roles for a Borrowing Product cccccccccesscesscesecesecusecuseeseeseeeseesseeseeeseceecnsecnsecaeente 10 4 10 5 EVENT WISE ACCOUNTING ENTRIES AND ADVICES cccccccscssesscsseesessesscesecsseseceeessesseeesssecsuesecsesseneesese 10 5 10 5 1 MMM Placement with True Discounted Profit ccccccesccescesscesecssecnseenseeseeeseeseceseeeseenseenseenaeonaeente 10 5 10 5 2 MMM Borrowing with Fixed Discounted Profit c cccccccesccsceesseeseeeeeseeeeecesecusecusecuaecaecaeeeseeeaeens 10 10 10 5 3 MMM Placement Fixed Bearing Profit ccccccsccesceseceseenseeneeeseeeseeeeeeeeeeecaecusecnaecnaecaaeeseeeaeens 10 13 10
205. sing Date Accrual Processing Date ReportFormat PDF v PrinterAt Client v Report Output Print v Printer Specify the following Accrual Processing Date You can generate the accrual control report for a specific accrual processing date Select the accrual processing date Click the adjoining calendar button to choose a date from the calendar Click OK to generate the report 11 2 1 Contents of the Report The selection options that you specified while generating the report are printed at the beginning of the report The contents of the report have been discussed under the following heads ORACLE Header The Header carries the title of the report branch code branch date user ID module name date and time at which the report was generated and the page number Contents of the report Field Description Contract Reference Number The reference number of the contract Status The status of the component Component The component Currency Currency of the accrual Accrual Y N Whether accrual has taken place or not Current Accrual Current Accrual of the contract Outstanding Accrual Outstanding Accrual of the contract Product The product associated with the accrual Cumulative Current Accrual Cumulative current accrual for the product Cumulative Outstanding Accrual Cumulative outstanding accrual for the product Accrual Reference Number The reference number of the accrual
206. st working day before the holiday will be processed The events of the holiday will be processed on the next working day after the holiday during beginning of day processing If you have defined that the deal be liquidated manually you cannot roll it over automatically When a deal is rolled over or renewed for the profit commission charge or fee components it can assume the attributes of the e Product involving the deal being rolled over e Original deal itself You can specify this at the time of deal processing of the old deal a ORACLE 8 9 1 Advices for Rollover When creating a product you can opt to generate an advice that you would intimate your customer that a deal involving her has been rolled over or renewed This specification will apply to all deals involving the product refer chapter on product definition However for a particular deal you can suppress this advice If an advice for renewal of the deal has been specified it will be generated during BOD processing 8 9 2 Automatic Status Changes A placement that is yet to reach a repayment date or on which repayments are being made regularly will be considered as having a Active status When a repayment is not done on the schedule date you may want to do aging analysis for the placement If you have specified status and indicate that they be changed automatically then the status change will be done during BOD processing on the day the aging is due
207. stem Whereas through FCUBS it does not happen through Contract screen for an authorized contract and does not get reversed If it is non financial amendment then the normal amendment procedure is followed and version number is changed each time the contract is amended In case of financial amendment Settlement Instructions requires a special handling ee ORACLE Note the following e If the request received has settlement details then the values sent as part of the upload should be uploaded e f Settlement Details are not sent then the details corresponding to the parent contract will be copied to the child contract if they are not specified at the time of creation However if the SGEN message is already generated then financial amendment upload is not allowed 6 6 Authorization of Changes To authorize the value dated changes you have to invoke the authorization screen Islamic Money Market Value Dated Changes Input Enter Query Contract Reference Product Latest Version Number Product Description Counterparty Start Date Counterparty Description Amendment Date Currency Amendments Schedules Current Values Modification Principal Change in principal Maturity Date Maturity Date Rate Local Currency Equivalent ICCF Settlement mis Split CIF Breakup Payment Details Revision Details Input By Authorized By Contract Status Date Time Date Time Wi Authorized a ORACLE
208. t Tag Description PRINCIPAL Principal Amount PRINCIPAL_DECR Decrease in principal on amendment PRINCIPAL _FWD Forward takedown amount PRINCIPAL_INCR Increase in principal on amendment PRINCIPAL_LIQD Principal Amount Liquidated PRINCIPAL_ROLL Principal Amount Rolled over PRINCPAL_XFWD Principal Amount Reclassified PRINCPAL_XREV Principal Amount Unclassified ROLLOVER_AMT Rollover Amount PRINCPAL_ADDL Additional Principal component_LIQD_CY Current year Unrealized accrual amount for a component component_LIQD_PY Previous year Unrealized accrual amount for a component lt PROFIT_COMPONET gt _ROLL The outstanding profit will be stored in a bridge account PRINCIPAL_ROIN This is the principal of the rollover child contract It equals the amounts of PRINCIPAL ROLL and lt PROFIT_COMPONET gt _ROLL PRINCIPAL_ADDL The incremental Principal amount that has to be paid to borrower in a Finance rollover Component_UINT Total profit amount for the contract for each component It would also be used to book unearned profit amount adjustments if any ORACLE 10 4 Accounting Roles 10 4 1 Accounting Role Description EIMDISCINC Effc Int Based Disc Accrued Till Dt EIMDISCRIA Effec Int Discount to be Accrued EIMPREMEXP Effective Int Premium Expense EIMINTADJPAY Effective Int Par Payable EIMINTADJEXP Effective Int Par Expense EIMDISCPIA Effective Int Discount Paid In Adva EIMDISCEXP Effective I
209. t balance that you have allowed for the account You can liquidate beyond the allowed debit balance for an account after overriding a warning message This override will be recorded for audit trail purposes Debit profit as specified for the type of account current or savings will be applied on the debit balance ue ORACLE e If the repayment account has not been defined with overdraft the liquidation will not be processed If you specify manual liquidation for deals involving the product then you will have to do the liquidation manually through the Manual Liquidation screen 5 3 2 Liquidating Back Valued Schedules during Initiation You have to indicate whether for a backdated deal that has schedules prior to today s date the schedules have to be liquidated when the deal is initiated A back dated deal is one which has an initiation date which falls before today s date Example Deals can be initiated e As of today e Adate in the future e As ofa date in the past Today s date is October 15 1997 Suppose you initiate today a borrowing of 15 000 USD with the Value Date the date on which the deal comes into effect as September 15 1997 the system will pass accounting entries for initiation as of September 15 But if there had been a profit payment schedule for September 30 1997 for 500 USD then if you specify that back values schedules should be liquidated you can make the system pass accounting entries to liquidate
210. t or if it is an amendment to an existing contract When you upload a new contract the reference number will be displayed in the User Reference Number field for that contract The user reference number will be the basis for checking whether the contract exists or not The upload for contract amendment will trigger the CAMD event The same event is triggered even when you make the amendment in the Murabaha MM Contract Online screen The fields that can be amended for the Murabaha Money Market module are as follows e Verify Funds For Principal e Verify Funds For Profit e Verify Funds For Compensation Amount e Verify Funds e Holiday Currency e Holiday Months oe ORACLE e Move Forward e Move Payment Schedules e Move Revision Schedules e Move Disbursement Schedules e Receivable tracking Parameters e Liquidation Auto Manual e Status Control Auto Manual e Exposure Category e Risk Free Exposure Amount e Internal Remarks e Demand Basis e Schedule Details e Settlement Details e The amendments of the following fields are considered as financial amendment e Currency e Counterparty e Amount e Booking Date e Value Date e Cr Dr Branch Code e Cr Dr Account Number e Holiday Currency e Commitment Revolving Non revolving e Maturity Type e User Input Maturity Date e Broker In case the request is a financial amendment system reverses and rebooks the deal if it happens through External Sy
211. t processing has to be done on the last working day before the holiday for automatic events right up to the day before the next working day the schedule falling on the holiday will be liquidated during end of day processing on the last working day before the holiday e f you have specified that processing has to be done only up to the System Date today then only those events scheduled for today the last working day before the holiday will be processed The events falling due on the holiday are processed on the next working day after the holiday during beginning of day processing If a borrowing has been defined for verification of funds before automatic liquidation through the Contract On line Preferences screen those components whose schedule dates fall on the same day will be liquidated in the order you have specified when defining the product If the funds are insufficient the liquidation is done to the extent of the available balance in the repayment account The components will be liquidated in the order that you specify This will be reported in the Exception Report generated at the end of every day automatically by the Automatic Contract Update function If you have not specified that the funds be verified and there are insufficient funds in the repayment account e The repayment account will be put into a debit balance if you have allowed overdraft and the schedules for the components liquidated to the extent of the debi
212. ted during beginning of day processing on the working day immediately after the holiday that is June 22 If the number of days is increased the system checks for deal with a payment date between the old and the new number of days and will send a billing notice If the number of days is decreased the system will check to see if a notice has been sent already to avoid duplication If not it will send the notice ie ORACLE 8 9 Automatic Rollover of a Deal A Rollover is renewal of a deal For a deal to be rolled over it should e Be past its Maturity Date e Not have been liquidated If you have specified automatic liquidation and automatic rollover for a deal the old deal will be liquidated and a new one initiated on the Maturity Date of the deal during the BOD Beginning of Day run of the Automatic Contract Update function If the Maturity Date falls on a holiday then the liquidation and the rollover will be processed as per your holiday handling specifications in the Branch Parameters screen e f you specified that processing has to be done today the last working day before the holiday for automatic events right up to the day before the next working day the schedule falling on the holiday will be liquidated during end of day processing on the last working day before the holiday e f you have specified that processing has to be done only up to the System Date today then only the events scheduled for today the la
213. tem makes the following validations before reversing a payment e A principal payment can be reversed only if the payment date is equal to or later than the last profit and commission schedule due date e An profit payment can be reversed only in the chronological order of its payment In the contract view screen to reverse a payment you have to invoke the manual payments function and specify the contract reference number You have to enter the Amount Paid You have to click on Reverse in the Processing sub menu of the Application toolbar If the payment involves accounts in different currencies the conversion rates to be used for reversal will be picked up from the deal as specified during contract input If a new payment account was specified for a component during the input of the payment the reversal will be done to the new account If the new account is in a currency different from that of the deal and a conversion rate was specified the rate from the payments function will be used for the reversal ae ORACLE The reversal of a payment may sometimes entail a change in the status of a borrowing If the borrowing is set for automatic status change this change will be made by the system automatically Automatic payments made by the Automatic Contract Update program can also be reversed through the manual payments function Reversal of payment will not be allowed if the Rollover Instruction Status of the contract is
214. ter an amount for this The repayment schedules for the components of the deal will be those defined for the product it involves You can change the schedules for a deal when processing it 5 8 2 3 Profit Repayment Schedules as Different from Rate Revision Schedules For a deal on which floating profit has to be applied at periodic intervals you may have to define both the following e Profit rate revision schedule for the profit component e Repayment schedule The following example shows how this is achieved Example You have a deal where for the component profit you have to define a profit rate revision schedule for revisions every week as well as a fortnightly profit repayment schedule The Start Date of the deal is October 1 1997 and the End Date is October 31 1997 The deal has been defined with a periodic rate and the rates in the floating rate table change in the following manner Date Rate October 1 1997 12 October 12 1997 11 5 ae ORACLE Date Rate October 25 1997 11 November 15 1997 12 November 30 1997 12 5 Defining a frequency based rate revision schedule To define a schedule with periodic rate code usage through the Contract Schedules screen mark the component as a revision schedule by checking the Rev box and specify the component say PROFIT from the picklist Give the frequency at which the profit rate has to be refreshed say weekly Give
215. the Start Date say October 8 The first revision will happen on this day and every week from then on Save the inputs Defining a date based rate revision schedule If you were to define specific dates October 7 October 15 and October 23 for the rate revision to happen then through the Contract Schedules screen mark the component as a revision schedule by checking the Rev box and specify the component say PROFIT from the picklist Specify the date on which the rate revision is to be done in the Start Date field as October 7 Similarly define the other dates but by picking up the same component PROFIT from the picklist each time Defining a repayment schedule for the same component Now to define a repayment schedule for the same component PROFIT do not check the Rev box Choose the same component profit from the picklist Now draw up a repayment schedule for this component Give a value in the Start Date field say October 15 1997 The first profit liquidation will be done on this date In the frequency field enter monthly and in the unit field specify 2 This means the profit repayments will be done every fortnight beginning October 15 That is for a deal defined with frequency based periodic rates the rates prevailing on the refresh dates will be used for accruals and liquidation In the deal we are discussing with the refresh frequency defined as weekly and the Start Date as October 15 the rate applied for
216. the holiday is a month end then the liquidation and rollover will not cross the month It will be done in the same month irrespective of the specifications in the Branch Parameters screen PU ORACLE Since a rolled over deal is initiated automatically it will also be authorized automatically The Maker and Authorizer fields of the new contract will show Auto Example Today s date November 14 1997 Next working date November 16 1997 which means November 15 1997 is a holiday During its Beginning of day BOD run the Automatic Contract Update function rolls over deals with a maturity date of November 14 1997 Now the processing of the rollover which falls due on a holiday depends on your holiday handling specifications in the Branch Parameters screen If you have specified that automatic processes scheduled for the holiday s are to be carried out on the last working day before the holiday s the old deal will be liquidated and the new one will be initiated during the end of day EOD processing of the Automatic Contract Update function on November 14 1997 this function rolls over deals with an End Date of November 15 1997 If you have not specified this the liquidation and rollover will take place during the BOD processing of the Automatic Contract Update function This function rolls over contracts with an End Date of November 15 1997 during its BOD run on the next working day that is November 1
217. the original Asset parent s outstanding balances to the child contract ComponentUID The unearned profit amount for a Income profit component Deferred Income GL 10 4 2 List II Acct Roles for a Borrowing product Accounting Role Description Role Type LIABGL Liability GL for Borrowings Liability FWDLIABGL GL for Future Dated Borrowings Contingent liability FW DLIABOFF Offset for Future Dated Borrowings Contingent Asset INTEREXP Fixed Profit Rate Expense INTERPIA Fixed Profit Rate Asset INTERPAY Fixed Profit Payable Liability CHARGEXP Common Flat Amt W o Slab Expense FRTAX1_PAY Tax payable role forFRTAX1 Liability FRTAXS_PAY Tax payable role for FRTAXS Liability ComponentREAL Realized Income Income The component is the ICCF component that you have created In the accounting roles listed above the prefixes INTER Profit PENL Compensation BROK brokerage CHARG Charge FRTAX1 Tax and FRTAXS are ICCF components The suffixes stand for 10 4 ORACLE AQP Acquired profit payable AQR Acquired profit receivable EXP Expense PAY Payable PIA Payable in advance REC Receivable RIA Received in advance 10 5Event wise Accounting Entries and Advices In the subsequent sections we have defined suggested accounting entries and advices for each of the events in the life cycle of an MMM deal Samples of accounting entries advices and events have been given for four dif
218. the profit liquidation on October 15 will be as follows From To Rate October 1 October 8 12 October 9 October 15 11 5 For a deal with Periodic rate code usage date based the rates prevailing on the specific refresh dates will be used for accruals and liquidation Shown below are the rates applicable on the specified revision dates Revision Date Rate Applicable October 7 12 October 15 11 5 October 23 11 5 In the deal we are discussing the rates applied for the profit liquidation on October 15 will be as follows ou ORACLE From To Rate October 1 October 7 12 October 8 October 14 12 October 15 11 5 5 8 2 4 Specifying Schedules for a Deal with a Fixed Profit Rate For components of deals with a fixed rate of profit you will not have to define profit rate revision schedules That is you will have to keep the Rev box unchecked while you define the schedules for each component The schedules defined for each component at the time of product definition apply to the deal However you can change the frequency number unit and the start date to suit the specific requirements of the deal that you are processing You will have to specify the amount only if the schedule being defined involves the principal component or a special profit But in the case of Murabaha Money Market deals the principal is usually repaid at Maturity and ra
219. the report branch code branch date user ID module name date and time at which the report was generated and the page number Contents of the report Field Description Product The product code of the MC product Description The description of the product Product Type The type of the MC product Payment Method The method of payment Contract Reference The reference number of the contract Contract Status The status of the contract Outstanding Amount The outstanding amount User Reference The user reference number Customer The identification of the customer Related Ref No The related reference number Contract Currency The currency of the contract Contract Amount The amount of the contract Original Start Date The original contract start date Booking Date The contract booking date Value Date The contract value date Maturity Type The maturity type of the contract Maturity Date The maturity date of the contract Notice Days The number of notice days Tenor The tenor User Defined Status The user defined status of the contract Auth Status The authorization status of the contract Broker The broker identification 11 22 ORACLE Field Description Cluster Id The cluster identification Cluster Size The size of the cluster Credit Line The credit line Tax Scheme
220. then the change is effected during BOD processing 8 12 Value Dated Changes Value Dated Changes are changes to a deal that come into effect on a specific date called the Value Date Examples of value dated changes are changes in profit charge or fee amounts collections of additional fees and so on Such changes indicated for a deal through the Value Dated Changes function falling due today that is if the Value Date is today s date are executed by the Automatic Contract Update function during beginning of day All the necessary accounting entries will be passed and advices specified for the event are generated If the Value Dated change is in the rate or amount of any accruable component the accruals are done for the deal with the old rate or amount as of the previous day yesterday If the Maturity Date of a deal has been changed so that the deal matures today the deal will be liquidated provided all the prerequisites for such liquidation are met Any Value Dated Change done during the course of the day with the Value Date as today will however be processed during the EOD processing 8 12 1 Advices Generated for Value Dated Changes When creating a product you can specify the advices that are to be generated when a value dated change is made on contracts involving the product For a deal involving the product you can suppress these advices if you do not want them generated The Automatic Contract Update function gene
221. this case to the last working day of the same month that is to April 29 despite your having indicated a forward movement into the next working day Scenario 2 You have defined a repayment schedule that falls due on May 1 This happens to be a holiday You have indicated that in case of a holiday the schedule date is to be moved backward to the previous working day If you have indicated that the schedule can be moved across months then the schedule will be automatically moved to April 30 that is the previous working day If you have not allowed movement across months but have indicated backward movement for this schedule the schedule date will be automatically moved forward in this case to the next working day of the same month that is to May 2 despite your having indicated a backward movement into the previous working day Holiday Ccy You can indicate here the country of the deal currency for which the holiday table should be checked before drawing the payment schedules related to the deal By default the currency to be checked is the deal currency If a currency other than this is specified the holiday table is checked for both the currencies Amendment to this field will be considered as a financial amendment Cascade Schedules The question of cascading schedules arises only if ii ORACLE e You have specified that a schedule falling due on a holiday has to be moved forward or backward e The schedule has been
222. this schedule also when the borrowing is initiated If you specify that back dated schedules are not to be liquidated then only accrual entries will be passed till today Please note that the entries associated with each event initiation and liquidation in this case will be passed only if they have been defined for the product Further the accounts used will be the ones defined for each entry 5 3 3 Specifying the Payment Method You have to specify whether the payment method for the main profit is to be bearing discounted or true discounted This cannot be changed at the time of processing a deal Bearing The profit is liquidated on schedule payment date s Example You have made a placement with Cavillieri and Barrett Finance Corporation of USD 100 000 at 10 profit for a year Now under the bearing type of profit payment method USD 100 000 is treated as the principal Here the placement of USD 100 000 is given to Cavillieri and Barrett Finance Corporation and the profit on it is collected over the one year which is the tenor of the finance we ORACLE Discounted In this profit payment method the profit is deducted at the time of initiating the deal Example Carrying forward the example of Cavillieri and Barrett Finance Corporation s placement of USD 100 000 at 10 profit a year under the discounted type of profit payment the total profit Actual 365 calculated for the tenor of the finance USD 10 000 is ded
223. to be applied on the rolled over deal also 7 3 4 Applying Brokerage Brokerage cannot be applied on a rolled over deal 7 3 5 Rolling Over with Profit You have to specify whether the deal that you are rolling over should be rolled over along with the outstanding profit If you so specify the principal of the new deal will be the sum of the outstanding principal and the outstanding profit on the old deal This applies only to deals with a bearing add on method of profit liquidation If all the outstanding profit is paid out then the deal can be renewed without the profit If not it will be rolled over with the profit that is still outstanding on it A deal is rolled over with only the main profit that is outstanding The main profit is that profit component which you specify as the main profit in the ICCF Product Details screen this will be displayed in the Contract Main screen Other profit components and the compensation profit if any will not be rolled over Example To carry forward the example of your customer Cavillieri and Barrett Finance Corporation who has taken a placement of USD 100 000 under from you on June 1 1997 at 20 profit the placement was to be liquidated at maturity on December 31 1997 But Cavillieri and Barrett Finance Corporation wants you to renew it roll it over into a new deal You have two options e You can roll it over without the outstanding profit e you can roll it over along with th
224. tract Reference Product Latest Version Number Product Description Counterparty Start Date Counterparty Description Amendment Date Currency Amendments Schedules Current Values Modification Principal Change in principal Maturity Date Maturity Date Rate Local Currency Equivalent ICCF Charges Tax lit Revision Details oe ORACLE 6 2 Navigating to the Schedule Definition Screen The schedule changes which have come about as a result of value dated changes can be done through the Murabaha Money Market Value Added Amendments screen For example if the schedule change has come about following a change in the maturity date or the profit rate you have to do this through this screen Click on Schedules in this screen Maturity Date Enter the new Maturity Date in the screen When you change the Maturity Date of a deal if e You have advanced the Maturity Date the schedules falling due after the new Maturity Date will be redefined to the Maturity Date e You have postponed the Maturity Date the schedules that have not been liquidated and which fall due before the new maturity Date will be redefined to the new Maturity Date You have to authorize the change in Maturity Date before you redefine the schedules as per your new requirements through the Contract Schedules screen When y
225. try for each deal should be specified for a branch This specification is applicable only for automatic periodic accrual entries When there is an accrual necessitated by a payment or a change in the terms of a deal the entries will be for the specific deals affected by the change Residual Amount The value that you specify as the residual amount indicates the limit for the residual balance when a placement with zero principal balance but with other outstanding components can be automatically liquidated The residual amount profit commission or fees will be checked against the amount that you specify The placement will be liquidated only if the pending components are individually less than or equal to the amount specified The amount that you specify as the residual amount is expressed in local currency For placements in foreign currencies the standard exchange rate will be picked up from the Exchange Rate Table The exchange rate that is used for conversion is defined for the product the deal involves While automatically liquidating the placement the outstanding amounts will be reversed to the accounts to which the accruals have been booked These amounts are however retained in the corresponding fields for information purposes The following are the maximum limits accepted e ORACLE For an amount with two decimals 99 99 For an amount with three decimals 9 999 For an amount with no decimals 99 999 Enter
226. ts safe use Oracle Corporation and its affiliates disclaim any liability for any damages caused by use of this software or hardware in dangerous applications This software and related documentation are provided under a license agreement containing restrictions on use and disclosure and are protected by intellectual property laws Except as expressly permitted in your license agreement or allowed by law you may not use copy reproduce translate broadcast modify license transmit distribute exhibit perform publish or display any part in any form or by any means Reverse engineering disassembly or decompilation of this software unless required by law for interoperability is prohibited The information contained herein is subject to change without notice and is not warranted to be error free If you find any errors please report them to us in writing This software or hardware and documentation may provide access to or information on content products and services from third parties Oracle Corporation and its affiliates are not responsible for and expressly disclaim all warranties of any kind with respect to third party content products and services Oracle Corporation and its affiliates will not be responsible for any loss costs or damages incurred due to your access to or use of third party content products or services
227. turity Date For a deal with a fixed maturity date you enter the changed date on which the deal should be liquidated Call The Maturity Date is not fixed The deal can be liquidated anytime Notice The deal will be liquidated at a certain period of notice The number of days of notice should be specified in this screen This is only for information purposes Whenever a report is generated on a notice type of deal the notice days will be mentioned on it For a deal with notice type of maturity you have to enter the Maturity Date once the notice is issued to the counterparty customer oi ORACLE For a deal maturing at notice enter the notice period in days in this field This is only for information purposes Whenever a report is generated on a notice type of deal the notice days will be mentioned on it For a deal with notice type of maturity you have to enter the Maturity Date once the notice is issued to the counterparty customer 7 6 Processing of Rolled Over MM Contract As you may recall in case of contract roll over you can create a new child contract and link it to the parent contract In such cases on saving the child contract the system triggers the BOOK event on the child contract and the RAMD event on the parent As a result the instruction status of the child contract gets updated as Complete During the linkage between child and parent the system will update the special amount fiel
228. u will have to manually liquidate the deal through the Manual Liquidation function For a deal with Fixed Maturity Type this date can either be extended or brought backward through the Value Dated Changes function once the deal has been initiated Notice Days For a contract maturing at notice you should enter the notice period in days This is for information purposes only When the notice to repay is issued to the counterparty you should indicate the Maturity Date of the deal in this screen You can Unlock the record and add the date Component Any number of profit rates charges and fees can be defined for a product through the ICCF Profit Commission Charge or Fee screens By default all these will be applied on the deal involving the product The component defined as the Main Profit by checking the Main Component in the ICCF Product Details screen will be displayed here If you want to make changes to the main profit component only you can do so through this screen without having to invoke the Contract ICCF screen If you change the main profit details the changed values will be applied on the deal along with the specifications for the other components fee charge and so on defined for the product If you want to change the details for any other ICCF component you have to invoke the Contract ICCF screen by clicking on the ICCF button and make the changes there Rate Type The rate type applicable for th
229. ucted from the principal USD 100 000 and only USD 90 000 is advanced True Discounted In this profit payment method the profit is calculated on the principal in a manner differing slightly from the Discounted method The profit rate is applied on the Principal instead of the Nominal as it is done in the Discounted method Example In the case of the placement with Cavillieri and Barrett Finance Corporation of USD 100 000 at 10 profit for a year under the true discounted type of profit payment the profit is calculated on the principal USD 90000 arrived at after deducting 10 profit on 100 000 is deducted from USD 10 000 and USD 91 000 is advanced This forms the actual principal of the finance To go to the Product Default Schedules screen click on the Schedules button in the Product Preferences screen 5 3 4 Indicating the Schedule Type You can define schedules for each component for the product through the Product Default Schedules screen This involves specifying the reference date the frequency the month and date for each component You can invoke the screen by clicking on the Schedules button in the Product Preferences screen 5 4 Features of the Product Default Schedules Screen When creating a product in the Product Default Schedules screen you can define schedules for all deal components This involves specifying the reference date the month and the date for each component
230. uidated The outstanding principal USD 100 000 is rolled over Profit will be calculated on this principal for the renewed finance ee ORACLE If no repayment is made and you decide to roll the old placement over renew it along with the accrued and unpaid profit the principal of this renewed placement will be USD 111 670 USD 100 000 USD 11 670 as of December 31 1997 Profit will now be accrued on this amount Cavillieri and Barrett Finance Corporation decides to pay back USD 11 670 on December 31 1997 the Maturity Date of the placement Now the entire profit is liquidated The outstanding principal now USD 100 000 is rolled over Profit will be calculated on this principal for the renewed deal 7 5 8 Deduct Tax on Rollover When creating a product you can specify that tax on the principal of rolled over deals involving the product should be liquidated However through this screen you can specify that tax on the entire principal should not be liquidated for a particular rolled over deal In this case if the principal of the rolled over deal consists of the outstanding principal as well as the outstanding profit from the old deal tax will be liquidated only on the portion that forms the outstanding profit For a product if you specified that tax on the principal of a rolled over deal should be not liquidated it would apply to all the deals involving the product However when rolling over a deal you can choose to apply tax
231. urrency You can impose some restrictions on the special rate by way of specifying a variance whether a compensation is to be imposed if there is an advance repayment Whether profit schedule amounts have to be recomputed in case of an advance payment Whether a deal involving a product can be booked to be initiated on a date in the future Whether for a backdated deal that has schedules prior to today s date the schedules have to be liquidated when the deal is initiated A back dated deal is one which has an initiation date which falls before the date on which it is booked The payment type for main profit bearing discounted or true discounted The values to be rekeyed by the authorizer of a contract at the time of authorization The liquidation order of various components in case of auto liquidation Repayment schedules Aging analysis details such as the movement of deals from one status to another the mode of status change whether forward and reverse movements should be automatic or manual reversal or stoppage of accruals upon change of status the transfer GL upon status change the messages to be generated and the transfer days for interim schedules and maturity schedules Specifying rollover details like updating credit limit utilization on rollover for a placement tax on rollover rolling over with profit or without deduction of tax on rollover Details of profit charge and fee Other tax details like the component bein
232. usesscususess 4 20 4 9 ADVICES FOR DEAL INITIATION o ie ccectvedcavesves pladscedcasceuesguecsseucadenuiasaveuselceccseeatuects ete deyvostugeds ed eadepventagerbevess 4 21 4 10 VEWNGEVENT DETAILS neoin a ch ceataesesa bee dep esata ecsh od cae cy en caee seo ea deb soa anus E ea ass tetees 4 22 4 11 VIEWING ACCOUNTING ENTRIES FOR DEAL INITIATION ccccccccccccccesesececesecececesececesesesesesssesesessessseeseess 4 22 4 12 VIEWING THE DIFFERENT VERSIONS OF A DEAL u ccccccccccccecececececececesesesecesesecesesesececesssesesssesesesssseeeseeeess 4 23 4 13 INITIATING A FUTURE VALUE DATED DEAL cccceccccccccecececececesececesesesesesesesesesesesesesesssesssessessesessesesseusss 4 23 4 13 1 Initiating Future Dated Murabaha MM Deals Manually 0 0 1cccccceccesseesceeeceeeceeeceecnsecneceeeaeeeneees 4 24 4 14 MAINTAINING THE COMMODITY DETAILS FOR A CONTRACT ccccccccesecececececececeseceseseseseseeesesesesesesseseeees 4 24 4 15 VIEWING ISLAMIC MONEY MARKET CONTRACTS DETAILS cccccccccececececececesecesececesesesecesesesseesesseeeseenees 4 28 4 16 AUTHORIZING BULK MM CONTRACTS ccccccccccecececececececececececscecscecesecececesecececssesesesesasesssesssssseseseeeseenaes 4 29 AAO Authorizing the DeIS sonerie oneei i a a se lose bois E dane stack AE E E ecto teeevd 4 30 A102 Viewing the ET OPS neeaae EEEE EE E ETE eyonts eres E E E enteteas Ei 4 31 4 16 3 Viewing the Settlement Details ssori irrite ioe re Es E eaa oE NE EE
233. when processing a specific deal you can change the repayment schedule which it inherits from the product it involves 5 2 Defining Schedules for a Product You can define repayment schedules for the profit or profit type of ICCF components like a tenor based charge or fee and the principal of a Murabaha Money Market deal while defining a product The attributes of the schedules for a product are defined through the Murabaha Money Market Preferences screen The following are the attributes of a repayment schedule e Mode of liquidation auto or manual This can be changed at the time of deal processing e Liquidation of back valued schedules upon initiation of a deal This can be changed at the time of deal processing However for a deal you can have e Only a maturity schedule for the principal and no interim schedules e Interim schedules for the profit e Only normal type of schedules for profit Schedules cannot be capitalized or amortized e No schedules for commission charge or fees A discussion on these attributes follows in this chapter The automatic contract update function executed as part of the MMM Batch Daily routine automatically liquidates schedules that you have marked for auto liquidation If schedules are marked for manual liquidation you will have to liquidate them through the contract schedule payments function Once you specify the attributes of schedules in the Murabaha Money Market Preferences
234. when the Commodity Tracking Status is Closed You can also view the commodity details for a contract by clicking Commodity Tracking button in the Contract Online screen 4 27 ORACLE 4 15 Viewing Islamic Money Market Contracts Details You can view the summary of all the Islamic Money Market contracts using Islamic Money Market Contract Input screen You can invoke this screen by typing MCSCONON in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button The screen giving all the details of the contracts is displayed Summary Authorization Status C B Contract Status Reference Number prowuct Currency Booking Date Maturity Date User Reference Customer Amount Value Date Related Reference Fe PB Branch Module Advanced Search Reset EOE ee Authorization Status Contract Status Reference Number l Customer Currency Amount Booking Date Authorization Status A Authorized U Unauthorized Contract Status A Active Y Yetto be Initiated L Liquidated V Reversed H Hold TER ORACLE 4 16 Authorizing Bulk MM Contracts Murabaha Money Market deals must be authorized in the respective Contract Online screens This method of authorizing the deals can be quite cumbersome especially if the volume of transactions is large In view of that Oracle FLEXCUBE allows bulk autho
235. y Tracking Status is Closure Title Documents Specify the documents that should be submitted as part of commodity trading Guarantee Ref Specify the reference number of the guarantee linked to the contract The option list will display all valid guarantee contracts advice of guarantee for placement contracts that have not already been linked to an MMM contract You can associate a guarantee only if the Commodity Tracking Status is Closure The Commodity Tracking Status in the status bar of the Contract Online screen displays the current tracking status of the contract and this varies depending on the contract type whether Placement or Borrowing as follows For Placements Events Commodity Tracking Status BOOK Booking a contract Waiting for Offer OFFR Offer received and accepted Offer Received and Accepted GRNT Receipt of the letter of the guarantee Closed ToD ORACLE For Borrowings Events Commodity Tracking Status BOOK Booking a contract Offer to be sent OFFR Offer is sent Offer Sent GRNT Guarantee is sent Closed Contracts that require commodity tracking will be initiated or activated only when the status is Closed For contracts involving normal products Commodity Tracking Status will be displayed as Not Applicable You cannot perform any operation in the Commodity Tracking screen
236. ype of operation will be set as AMND 8 3 2 Account Statement If the User Ref No in messages option is checked in the MM Branch Parameter screen then in the Field 61 statement line the user ref no would be populated in sub field 8 account servicing institution s ref no If it is left unchecked then it will be picked up from the child contract reference number a ORACLE 8 4 Invoking the Batch Process Batches are run automatically In the mandatory programs all batches whichever are required will be maintained in sequence and that is triggered automatically as based on the maintenance in the Mandatory Batch Program Maintenance screen You can invoke this screen by typing EIDMANPR in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Mandatory Batch Program Maintenance Branch Function Id Module z Sequence Number Description End of Cycle Group Transaction Input Error Handling Stop Automatic EOD Run End of Transaction Input Continue Automatic EOD End of Financial Input End of Day Beginning of Day Frequency Daily Number Of Days Holiday Rule Do Not Execute Run Date Execution Layer Database Job Code Application Description Sub Stage 1 Predecessors Module Choose the module code from the adjoining option l

Murabaha Money Market User Manual

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