Charge and Fees User Manual
Contents
1. The charge details pertaining to the contract are specified in the Charge Details screen You need to invoke this screen from the Contract Online screen The Charge Details screen is invoked as follows for the different modules of Oracle FLEXCUBE Click Charges button in the Contract Input screen of any module When the details of a contract are captured the charge components defined for the product will automatically apply on it However while processing a contract you can change certain attributes of the charge component 28 ORACLE Note In case Charge Currency and Settlement currency are different exchange rate is handled as per rate code specified in Account Details tab in settlement button Charge Details Contract Reference Charge Association 1 Of 1 a Creation ESN Component Rule Description Consider as Discount m Charge Application 1 Of 1 Creation ESN Component x Tag Currency Tag Amount Charge Currency Charge Amount m r Charge Liquidation 1 Of 1 Event Sequence Number Component Charge Currency Charge Amount Liquidated z Reference Number The contract reference number of the contract you are processing will be displayed on this screen Charge Association The charge components specified for the product to which you have linked the contract w2. All e Currency Code All e Amount 35 00 The system will by default use this record to deduct charges incurred for sending advices through SWIFT for all the customers of your bank irrespective of their resident country Moreover an amount of 35 00 will be deducted as advice processing charges in the currency of the customer account ORACLE 3 Function ID Glossary Cc M CFDCHGCE 0 ee 2 10 MSDCHGMN ee 2 21 CFDICCFR 220 nn 2 2 CFDRUMNE ee 2 3 I ORACLE
3. 1 1 e The maintenance of ICCF rules must be allowed for users at the current branch according to the restrictions maintained in the Common Branch Restrictions maintenance for the restriction type ICCFRULE If no Common Branch Restrictions have been maintained and the restriction type ICCFRULE has not been maintained in the SMS Branch Restriction Type maintenance the option list in the Rule ID field only displays those rules that are available for users in the current branch according to the ICCF Rule Branch Availability maintenance Rule Application Conditions By default a charge rule that you define can be applied on transactions in e All currencies e All customers e All customer groups e All branches However to restrict the application of a rule to transactions involving a specific customer customer group currency and or branch you can specify the same in the respective fields Thus the most generally applied condition can be that a charge rule is applicable to contracts in any currency involving any customer customer group or branch An interim condition is that a charge rule is applied on contracts in a specific currency but involving any customer customer group or branch Note You will not be allowed to define an ICCF Rule for a specific combination unless you main tain a record for the same Rule at the generic level For instance while creating the Rule ID SPIWDCHGS for the very first time the system de
4. a contract you can also indicate whether the application of a specific charge component should be waived You cannot modify the attributes of the rule during contract input However you can change the charge amount More than one charge or fee can be applied on a product For example you could link two charges to an outgoing transfer product one with 0 05 of the transfer amount as the charge and another with a flat amount of say 200 local currency units The first one could be your commission on the transfer and the second for the SWIFT or cable charges incurred to affect the transfer These will be processed as two different charge components The income accounts can be different for these components The two charge components will be reported in all reports and in the customer correspondence regarding the transfer Steps involved in processing charges The following steps are involved in processing charges a ORACLE 1 Defining branch restriction for ICCF rule 2 Maintaining ICCF rule availability Branch Specific Rules 3 Defining charge rules and attributes When you define a rule you can also restrict the use of the rule for the different branches of the bank 4 Defining charge class 5 Link a charge class to a product 6 Specify charge details for a contract Creating Charge Rules A charge rule is created as under e The rule is created at the head office branch by giving it a unique identification and
5. another entity on behalf of customer Eg Custodian e Their Charges This indicates that your bank is collecting other bank s charges as in the case of LC and BC contracts The charges or fee that you levy will be recovered typically from the counterparty involved Therefore when building a charge class you may indicate the charge to be of Counterparty type Third Party Type If a charge component that you associate with a product is of third party type specify the party type If you are defining the charge class for FT module and the charge component is of Third Party type the system will segregate the charges from the transfer amount for outgoing transfers Consequently the payment message will comprise only the net amount credited to the Nostro account after deducting the charge amount Debit Credit Choose the Debit option in this field if the charge component associated with the product is to be debited to the customer If you would bear the charge component choose the Credit option The following example illustrates how a charge could be of a Credit type Propagation Required Check this option to indicate that the charge collected from the borrower must be passed on to the participants of the contract Net Consideration The sum of the different components of a contract determines the net value of the contract You can indicate that a charge component should be taken into account when d
6. currency is different from the contract currency The rate code is used to arrive at the exchange rate if the rate currency is different from the contract currency The system arrives at the exchange rate from the parameters specified for the currency pair in the Currency Pair Definition table Note If the charge is based on the Flat Amount Min Amount and Max Amount are not appli cable Refer to the chapter on Currency Maintenance in the Core Services User Manual for more information on parameters of currency pairs Tenor Basis You can create a charge rule that would calculate charges on the basis of Tenor slabs Check the Tenor Basis check box if the Charge is calculated based on the Tenor Tiered Tenor Charges calculated on the basis of Charge Rates for different layers of the Tenor Booking Currency Select the booking currency from the drop down list You can choose one of the following options e Contract Currency If you select this the system will calculate the charge in the currency specified in the field Charge Currency e Charge Currency If you select this the system will calculate the charge in the currency of the contract Based on the booking currency specified the system will decide the currency in which the charge needs to be calculated Basis Amount and the Charge Currencies The charge currency is the currency which will be associated with the charge that is calculated or the
7. 4404snnnnnnennnnnnnnnennnnnnnnnnnnnnnnnnnennnn nn 2 18 2 2 10 Indicating whether Advice Processing Charges Need to be Collected 2 20 2 2 11 Levying Charges on the Recipient of a Message uuner nennen 2 21 3 Function ID Glossary 2 een ete 3 1 1 1 1 2 1 3 1 4 1 5 1 Preface Introduction This manual is designed to help you get acquainted with the manner in which charges or fees are calculated in Oracle FLEXCUBE It takes you through the various steps involved in processing a Charge or Fee for a contract 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 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 Documentation Accessibility For information about Oracle s commitment to accessibility visit the Oracle Accessibility Program website at http www oracle com pls topic lookup ctx acc amp id docacc Organization About this Manual gives a brief introduction to the module It also lists the Chapter 1 various chapters in the Use
8. Note As mentioned earlier the rules applicable for combinations involving all branches the ALL option in the Branch Code field can be maintained only from the head office branch Transaction Currency If you wish to define the attributes for all currencies you can select the ALL option in the Currency Code field to indicate this If you are maintaining the attributes for the selected ICCF rule in specific currency other than the ALL select the Transaction Currency on which the rule mapping maintenance is to be made applicable Customer Group Select the customer group on which the rule mapping maintenance is to be made applicable Note You can create a generalized charge rule mapping record by selecting the ALL option in the Customer Group field This specification is defaulted to the Customer and Customer Account fields You will not be allowed to change the specification Customer Specify the customer identification number CIF of the customer for whom you are maintaining the rule mapping Branch Code If you are maintaining the attributes for the selected ICCF rule from the head office branch you can select the branch for which the attributes are being defined If you wish to define the attributes for all branches you can select the ALL option in the Branch Code field to indicate this If you are maintaining the attributes for the selected ICCF rule from a branch other than the head office you can only select those
9. OA A Basis Amount Currency Charge Currency Maximum Rate Code Rate __ Cascade Amount Rate Period Minimum Commision Period Maker Date Time Checker Date Time Mod No Record Status Authorization Status You can capture the following details Rule Type The Rule Type identifies the type of component you are defining The attributes applicable for a component depend on the Rule Type In this chapter we shall discuss the procedure for setting up rules for charge components For every rule that you define you can enter a description Specifying a description helps identify a rule Rule Identification Every charge rule is identified by a unique ten character code called a Rule ID You can link a valid Charge Rule ID to the charge classes that you maintain in your bank Charges or fees for all products with which you associate a charge class will be calculated on the basis of the Rule ID that is associated with the class To recall the Rule ID for a charge rule is specified in the ICCF Rule Branch Availability maintenance Accordingly in the Rule ID field in this screen you must select the ID of the charge rule that you wish to build by maintaining the attributes The option list in the Rule ID field is populated based on the following conditions e Only those Rule IDs that are available for users at the current branch according to the ICCF Rule Branch Availability maintenance are displayed at ORACLE 2 2
10. ORACLE Charges and Fees User Guide Oracle FLEXCUBE Universal Banking Release 12 0 87 1 0 Part No E56600 01 August 2014 Charges and Fees User Guide August 2014 Oracle Financial Services Software Limited Oracle Park Off Western Express Highway Goregaon East Mumbai Maharashtra 400 063 India Worldwide Inquiries Phone 91 22 6718 3000 Fax 91 22 6718 3001 www oracle com financialservices Copyright 2007 2014 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 da
11. arge amount into the contract currency amount When you associate a charge component with a product you can choose to allow the amendment of the rule linked to it under the following conditions Allow Rule Amendments If you would like to allow the amendment of a rule for a charge component when linked to a contract check this box Amend After Association If you would like to allow the amendment after association of a rule for a charge component check this box Once checked the system will allow you to modify the rule after the association event is triggered for the linked contract Allow Amount Amendment If you would like to allow amendment of the charge amount calculated by the system as per the charge rule check this box Amend After Application If you would like to allow the amendment of the charge amount after application of a rule for a charge component check this box Once checked the system will allow you to modify the charge amount after the application event is triggered for the linked contract Default Waiver The charge component to which you link a charge rule acquires the properties defined for the rule Charges for contracts maintained under the product with which you associate the class you are building will be calculated by default according to the rule linked to the component However when maintaining a product you can choose to waive the rule altogether If you want to indicate that the charge rule
12. arge fees collection also have to be set up In Oracle FLEXCUBE you can define the different tyoes of charges or fees that apply ona product as classes A charge class is a specific type of charge component E g Charges for amending the terms of a contract A charge class is like a template which can be associated with a product You can modify certain parameters of the charge class while associating it with a product and also at the time of contract processing When defining a product you merely have to attach the required classes In this manner a contract processed under a particular product acquires the classes components associated with the product However for Funds Transfer and Foreign Exchange modules Oracle FLEXCUBE will not use charge classes for calculating charges You need to link a charge rule while defining the charge component for the product The linking of a charge rule to a product is discussed in the subsequent sections of this chapter To apply a charge or fee on a Funds Transfer you should first define attributes for each of the components You can define these attributes by specifying a Rule for the charge or fee These charge rules should in turn be linked to a product through a class so that the attributes of the charge rule will be applied on all contracts linked to the product However while capturing the details of a contract you can modify some of the attributes defined for a rule Further for
13. arges are accrued using the upfront fee system Note This option is disabled for BC contracts Collect LC Advising Charges in Bills Check this box to indicate that the charge class used with an LC should be liquidated or transferred as a part of the bill availed against the LC You can check this option only for LC module If you check this box for other modules then system will display an error message This check box indicates whether the charge component needs to be transferred onto the bill or should be collected from the customer during the liquidation event of the charge component as a part of the LC During authorization of charge component the system automatically creates liquidation amount tags for the component for LC module If you select this option then the system will allow for definition of accounting for the component as a part of Bill and or as a part of the LC This enables to define the accounting entries for this component and can be recovered the same as part of Bill Accounting roles of the bills module are associated with such charges These roles can be used to transfer the charges onto Bills Discount Basis While defining a charge class for the bills module you can define the discount basis for the purpose of IRR computation You can choose either of the following as discount basis e Inflow If you choose Inflow the charge will be considered as an inflow for IRR computation e Outflow If you choos
14. ation event that you specify If the event chosen for the liquidation of the charge component at the charge class and the event chosen for liquidating the same charge component at the Product Events and Accounting Entries screen are different the charge will not be liquidated and accounting entries will not be posted In FX FT and SI modules the concept of association application and liquidation events is not applicable The charge component is liquidated at the event chosen in the product Hence charge class for these three modules are defined under Old Charge Class The Old Charge Class is found under product class The charge classes for FX FT and SI have to be defined under this The charge components are linked to three different events This mapping gives you the option to change the charge amount before it is liquidated Basis Amount Tag The basis on which interest charge fee or tax is calculated is referred to as the Basis Amount A charge or fee can be on the basis of the contract amount for instance The different basis amounts available in a module are associated with a unique tag When building a charge component you have to specify the tag associated with the Basis Amount When charge or fee is calculated for a contract the basis amount corresponding to the tag will be picked up automatically Basis amount refers to e Principal amount or commitment ale ORACLE e Transaction amount in the case o
15. branches that are found in the allowed list of branches for e the ICCF rule definition Restriction Type ICCFRULE in the Common Branch Restrictions maintenance for the current branch e the selected rule being built according to the ICCF Rule Availability maintenance In other words the option list in the Branch Code field would display only those branches that are allowed both for the rule and the current branch The following example illustrates how the option lists in the Rule ID and Branch Code fields are populated Rate Type The rate type indicates whether the charge or fee to be applied for the Rule ID is a flat amount or a percentage of the basis amount Basis amount here refers to e Principal amount or commitment e Transaction amount in the case of a teller entry e Transfer amount in case of a Remittance e Sl Amount in case of Standing Instruction e LC amount in the case of a Letter of Credit e Bill amount in the case of a Bill e Buy Sell amount in the case of an FX deal 26 ORACLE 2 2 1 2 e Deal Nominal amount for a Security Deal If the Charge Rule that you are defining calculates charges on a rate basis choose the Fixed Rate option To levy a flat amount as charge say a postal charge on the products that are associated with the Charge Class choose the Flat Amount option You can choose to indicate the Rate Code and whether the rate is Mid Buy or Sell only when the basis amount currency and the rate
16. cify this only if the Rule Type is a Commission Tenor Details Tenor From and Tenor To The tenor is in days For instance If Tenor from and Tenor to are given as 0 and 91 the tenor slab is from 0 days to 91 days Sequence for Resolution of ICCF Rules ICCF Rules that you maintain are resolved in the following sequence Rule Branch ae Customer Currency Specific Specific Specific Specific Specific Specific Specific Specific Specific ALL Specific Specific Specific ALL Specific Specific Specific ALL ALL Specific Specific Specific Specific ALL ALL Specific Specific ALL ALL ALL Specific ALL Specific Specific Specific Specific ALL Specific Specific ALL Specific ALL Specific ALL Specific Specific ALL ALL ALL Specific Specific ALL Specific ALL ALL Specific ALL ALL ALL ALL Defining Charge Rule Application Conditions When you have built charge rules you are ready to build Charge Classes When creating a product you can link it with a Charge Class you have built Thus the definition of charge rules should precede the definition of Charge Classes and Product Definition Defining a Charge Class A class is a specific type of component that you can build with certain attributes You can build a charge class for instance with the attributes of a specific type of charge such as Charges ORACLE for amending the terms of a transaction or Cha
17. d on the exchange rate between the settlement currency and the contract currency as on the discounting date The charge amount in contract currency is used for accounting This pertains to BC contracts e If the charge currency is different from the contract currency and the contract currency is same as the settlement account currency the exchange rate maintained for the settlement account through the Settlement Message Details Account Details screen is used to convert the charge amount into the contract currency amount Collect LC Advising Charges in Bills Check this box to indicate that the charge component defined for the product can be collected as a part of a bill availed under the LC You can check this box only for Export type of LC If this option is checked in the charge class you can modify this checkbox at product level In case if this charge component is linked for Import LCs then this option gets defaulted as N Checking this box ensures that the component is marked for transfer onto Bills The LC charges due are stored in a data store which are populated only upon checking this box at the selected product Consider as Discount While associating a charge class for either securities or a bills product you can indicate whether the charge component is to be considered for discount accrual on a constant yield basis If you check this box the charge received against the component is used in the computation of t
18. description in the ICCF Rule Branch Availability Maintenance screen In this screen the rule is made available for use in the required branches by maintaining an allowed disallowed list of branches e Atthe required branch in the ICCF Rule Details screen the attributes for the rule are defined Maintaining the attributes in this screen is subject to whether maintenance of ICCF rules is allowed for the branch and also whether the rule for which attributes are being defined is allowed for the branch To recall at the head office of your branch you can create appropriate ICCF rules and make the rules available to the required branches In the ICCF Rule Availability Maintenance screen you can maintain ICCF rules which you can make available to desired branches You can do this by maintaining a list of branches for which the use of the rule is allowed or disallowed You can invoke this screen by typing CFDICCFR in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button ICCF Rule Availability Maintenance E New B Enter Query Rule Id Branch Restrictions Allow Disallow Description Track Receivable Track Payable E Branch specific rules Branch Code Description C Input By Authorized By Modification Date Time Date Time Number W Authorized In this screen you must specify the foll
19. e Outflow the charge will be treated as an outflow for IRR computation You can define discount basis only if the Consider as Discount option is enabled If you have not opted for Consider as Discount the Discount Basis field will be disabled If the Consider as Discount option is enabled Discount basis has to be defined On enabling the Consider as Discount the default value of Discount Basis will be Inflow and you will have to change it to Outflow if required zus ORACLE 2 2 5 2 2 6 2 2 7 Defining Charge Components for a Product You can specify the charge components applicable to a product Click Charges button in a Product Definition screen to invoke the Charge Details screen Charge Details Product Code Component Details Component Description Charge Type Third Party Type Event Details Event For Association Description Event For Liquidation Description Rule Details Settlement Currency Rule Description Other Details Product Description Debit Credit Add Subtract Net Consideration SWIFT Qualifier Advice Charge Event For Application Description Basis Amount Tag Description Allow Rule Amendment Amend After Association Allow Amount Amendment Discount Basis Accrual Required Stop Association Propagation Required Default From Class Default Waiver Capitalize Collect LC Advising Charges in Bills Amend After Appl
20. ecord Status Authorization Status Specify the following details Charges Maintenance Enter the following details in the Message Charges Maintenance screen e Receiver e Media e Currency e Country e Amount Defining Charges for a Specific Recipient The message generation charges that you define in this screen are for a Recipient customer or bank Media SWIFT Telex Mail and Fax Country combination You can select the appropriate Receiver Media Country codes from the option lists available For a given combination you can define a charge amount and specify the currency in which the charge should be levied The account of the recipient will be automatically debited for the charge amount during the event at which the message is generated Defining Charges for All Recipients You can define a charge that can be levied on all customers that are recipients of messages generated from your bank To make the charge applicable to all recipients choose the ALL option in the Receiver field If you have defined a charge to be applied to all customers and also defined a similar charge for a specific customer the customer charge takes precedence Identifying the Receiver Media and Country Combination In this screen you need to identify the Receiver Media and Country combination for which a particular charge amount is to be debited ORACLE The receiver of charges is the customer of your bank for whom you are mainta
21. etermining the net value of a contract by choosing the Net Consideration option Note The Net Consideration option is applicable if you are defining a charge class for Securities module ani ORACLE 2 2 4 1 Add Subtract If you choose to include the charge component in the net value you should indicate if the charge component is to be added while calculating the net consideration amount or subtracted SWIFT Qualifier You can report the charge component of a contract in the SWIFT messages that you generate To do this identify the component when building it in the Charge Class Maintenance screen with the appropriate SWIFT code Events A contract goes through different stages in its life cycle such as e Initiation e Amendment e Rollover Each of these stages is referred to as an Event in Oracle FLEXCUBE At any of these events you can choose to apply a charge or fee When defining a charge class you should specify e The association event e The application event e Liquidation event The event at which you would like to associate a charge component to a contract is referred to as the Association Event At this event no accounting entry for the charge component is passed The event at which the charge component is actually calculated is referred to as the Application Event At this event no accounting entry for the charge component is passed The charge or fee is liquidated at the Liquid
22. f a teller entry e Transfer amount in case of a Remittance e Sl Amount in case of Standing Instruction e LC amount in the case of a Letter of Credit e Bill amount in the case of a Bill e Buy Sell amount in the case of an FX deal e Deal Nominal amount for a Security Deal Default Charge Rule You can link a charge rule that you have defined to the charge component that you are building When you link a rule to a component the attributes that you have defined for the rule will default to the component To recall a charge rule identifies the method in which charge or fee of a particular type is to be calculated A rule is built with amongst others the following attributes e The charge currency e Whether the charge or fee is to be a flat amount or calculated on a rate basis e The minimum and maximum charge that can be applied e The tier or slab structure on which the charge is to be applied e The customer and currency restrictions etc The charge component to which you link a rule acquires these properties Charges for the product with which you associate a charge component will be calculated by default according to the rule linked to the component However when processing a contract you can choose to waive the rule altogether When building a charge class you can choose to allow the amendment of the rule linked to it in the following conditions e You can choose to allow amendment after the association event e You can choo
23. faults the values in the Transaction Currency Branch Account Category Customer Customer Group Branch and Account fields to All Only after saving this record you will be allowed to create a second record for a specific combination for the same Rule ID Defining a rule at a generic level is mandato ry The significance of this can be understood by the following example You can only define the attributes for an ICCF Rule to be applicable for all branches from the head office branch You can create ICCF rules to be applicable for transactions with the following specific combinations e A specific branch customer category customer and currency e A specific branch customer category customer and all currencies e A specific branch customer category currency and all customers e A specific branch currency and all customer categories and customers e A specific branch customer categories and all currencies and customers e A specific branch and all customer categories customers and currencies e A specific customer category customer currency and all branches e A specific customer category customer and all currencies and branches e A specific customer category currency and all customers and branches e A specific currency and all customer categories customers and branches e A specific customer category and all customers currencies and branches e All branches customer categories customers and currencies 2 ORACLE
24. filiates 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 Contents FARM gl E CO una an NR 1 1 1 1 Introduction zarte E E E E 1 1 12 Auden E oana en Tee 1 1 1 3 Documentation Accessibility 0 00 0 cc cceeceeeeeecneeeeeenieeeeeeeeaeeeeeeeiaeeeeeeeitaeeeesenaes 1 1 1 4 Organization ars leerer ligne 1 1 1 9 GIOSSary OLICONS 2 m erinnere 1 1 1 6 Related Documents soree R E RRE I tela 1 2 2 Processing Charges 22 2224 5 222 2 2 sen 2 1 2 1 Introduction es an an en 2 1 2 1 1 Steps involved in processing charges uunu2222snnnneennnnnnnennnnnnnnennnnan 2 1 2 2 Creating Charge RUGS corran aA E ETE E NAT 2 2 2 2 1 Building Charge Rule ra E A E ENS 2 3 2 2 2 Sequence for Resolution of ICCF Rules nsunsn nennen 2 9 2 2 3 Defining Charge Rule Application Conditions 4s nennen 2 9 2 2 4 Defining a Charge Class uus 222240ssnnsnnnnnnnnsnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn 2 9 2 2 5 Defining Charge Components for a Product uuu 2222snenr rennen 2 16 2 2 6 Indicating whether Advice Processing Charges Need to be Collected 2 16 2 2 7 Associating a Charge Class with a PrOduc 0 0 cccscscceceetseeeeetttteeeeeeeee 2 16 2 2 8 Associating Several Charge Classes with a Product rn 2 17 2 2 9 Contract Charge Details u 2
25. flat charge amount When building a charge rule if the Rate Type is a Flat Amount you have to indicate the currency of the charge or fee The charge or fee when applied on a transaction will be collected in this currency The input to this field can be any currency that is maintained as part of Currency Definition in Oracle FLEXCUBE The amount itself is specified subsequently through this screen This amount can be changed during contract processing Charges or fees can be calculated for a transaction on the basis of tiers or slabs When building a charge rule you should also indicate the currency of the tiers or slabs based on which you levy the charge This is the Basis Amount Currency If the transaction is in a different currency then the charge is calculated after converting it to the currency of the tiers and slabs 2 ORACLE 2 2 1 3 Maximum and Minimum Charge Amount Specify the following details Maximum Amount If the charge is based on a fixed rate you should specify the maximum amount that can be applied on a contract involving the Rule ID If the charge calculated using this Rule ID exceeds this amount for a contract the maximum amount specified in this field will be applied instead of the amount calculated using the fixed rate Maximum Rate If the charge is based on a fixed rate you should specify the maximum rate that can be applied on a contract involving the Rule ID If the charge calculated using this R
26. he constant yield and subsequently amortized over the tenor of the associated contract aut ORACLE 2 2 9 Accrual Required This option is defaulted from the Charge Class Maintenance screen and cannot be modified during product association Note This option is disabled for BC contracts Discount Basis While defining a charge product for the bills module if you choose to associate a Charge Class to the Charge Product the product will inherit all the attributes defined for the class But you can override the value of Discount Basis from what has been defined in the charge class If you have not chosen to associate the Charge Product with a Charge Class to define the discount basis for the purpose of IRR computation you can choose either of the following as discount basis e Inflow If you choose Inflow the charge will be considered as an inflow for IRR computation e Outflow If you choose Outflow the charge will be treated as an outflow for IRR computation You can define discount basis only if the Consider as Discount option is enabled If you have not opted for Consider as Discount the Discount Basis field will be disabled If the Consider as Discount option is enabled Discount basis has to be defined On enabling the Consider as Discount the default value of Discount Basis will be Inflow and you will have to change it to Outflow if required Contract Charge Details
27. ication Consider as Discount You should necessarily use a charge class to indicate the charge components applicable to a product A charge class is a specific type of component that you can build with certain attributes Indicating whether Advice Processing Charges Need to be Collected For each advice that is linked to the product you can specify whether charges incurred for sending the relevant advices to the customer through the various media should be charged to the customer account or whether they should be waived Your specification will be defaulted to all the contracts involving this product However you will be allowed to change this specification while processing individual contracts Note This specification applies only to LC Bills and FT products Associating a Charge Class with a Product To associate a charge class with a product click Default From Class button from the Charge Definition screen Select the appropriate charge class from the list of classes defined specifically for the particular module of Oracle FLEXCUBE The attributes defined for the charge class are displayed You have the option to change the attributes defined for the charge class to suit the requirement of the product you are creating 216 ORACLE 2 2 8 Associating Several Charge Classes with a Product You can associate several charge classes with a product To add to the list of classes associated with the produc
28. ill be displayed in tabular columns You can choose to waive these components for the contract you are processing Event Sequence Number This displays the event number which depends on the life cycle of the contract processing You cannot modify this value Specifying Charge Details Specify the following details ze ORACLE 2 2 10 Component The name given to the charge component will be displayed here The attributes defined for this component will be displayed in the subsequent fields For a charge component the following details are displayed e The event that triggers the application of the charge being defined e Ifthe charge is a rate it is defaulted from the product You cannot the change the rate at which the charge is calculated However you can modify the calculated charge amount e The currency in which the charge is specified if it is a flat amount and the flat amount itself e Ifthe charge component is to be considered for discount accrual on a constant yield basis Consider as Discount option will be checked You cannot modify this value Waiver The attributes of a charge or fee defined for a product will be applied on all contracts involving the product To waive the charge or fee on a contract you are processing choose this option The charge or fee will be calculated but not applied Note If you waive the charge or a fee the system will calculate the charge but does not affect the c
29. indicates the Event code and is defaulted from the product to which the contract is linked Advices The Advices attached to the product to which you have linked the contract displays in tabular columns If you indicate that the customer is the receiver of charges the system automatically locates the relevant Receiver Media and Country combination from the available Charge Maintenance Details records and deducts the charge amount associated with the particular combination The Charge amount is deducted from the customer account in the specified currency Note If you have not maintained a Charge Maintenance Details record for the particular custom er the system uses the wildcard entry type record to deduct the charge amount Levying Charges on the Recipient of a Message On the messages that are generated from Oracle FLEXCUBE you can levy charges You can define these charges for a Receiver Media and Country combination You can define these charges in the Message Charges Maintenance screen which is invoked from the Application ial ORACLE Browser You can invoke this screen by typing MSDCHRMN in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Message Charges Maintenance Ei Save Charges Maintenance Receiver Media Country Bia Bi Bh Al Currency Amount Fields Maker Date Time Checker Date Time Mod No R
30. ining charge maintenance details Since advices can be sent to customers through various media you can choose to maintain separate charge amounts depending on the type of media being used In addition you have to indicate the country of the customer for whom you are specifying charge maintenance details Each time you process a transaction in Oracle FLEXCUBE for the respective Receiver Media and Country combination the system automatically deducts the charge amount associated with the particular combination The charge amount is deducted from the customer account and the relevant accounting entries will be posted based on the accounting entry set up defined for the product involved in the contract Specifying the Currency and Amount In addition to specifying the Receiver Media Country combination you have to indicate the currency in which the charge amount is to be collected Subsequently you can specify the amount for which the customer account is to be debited Maintaining Wildcard Records You have the option of using the wildcard All in all or some of the fields to indicate that the charge maintenance details are applicable for all customers irrespective of the media type the resident country to which they belong and the currency in which the amount is to be deducted Let us assume that you have maintained the following specifications in a Charge Maintenance record e Receiver All e Media SWIFT e Country
31. must be deemed as waived by default select this option Capitalize You can capitalize the payment of charges and fees If the charge is not paid on a scheduled date the outstanding charge amount will be added to the outstanding principal and this becomes the principal for the next schedule If a partial payment has been made the unpaid amount will be capitalized the unpaid charge is added to the unpaid principal and this becomes the principal for the next schedule Note If the Capitalize option is not checked for the broker deal product and currency combi nation then the option Consider as discount cannot be checked for the securities module Consider as Discount While defining a charge class for either the securities or the bills module you can indicate whether the charge component is to be considered for discount accrual on a constant yield basis If you select this option the charge received against the component is used in the computation of the constant yield and subsequently amortized over the tenor of the associated contract Checking this option also indicates that the component is to be used for IRR calculation as ORACLE Note IRR the Internal Rate of Return is the annualized effective compounded return rate which can be earned on the invested capital i e the yield on the investment Accrual Required Checking this indicates that the charges have to be accrued Subsequently the ch
32. ngerous 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 its 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 af
33. nk if the Basis Amount structure is Slab Bracket Tenor You can create a Charge Rule which calculates charges on the basis of an amount structure In this table you define the different attributes of amount structure based on which the charges are calculated Basis Amount To You should specify the upper limit of the slab or tier to which a particular rate or amount should be applied as a charge Fixed Rate If the charge is a percentage of an amount specify the applicable rate This rate will be applied on the Basis Amount To depending on whether you have defined the application basis as a slab or a tier Charge Unit The Charge Unit specifies the unit for rounding up a charge basis amount or fee basis amount to the nearest amount The charge or fee will be calculated on the rounded basis amount 28 ORACLE 2 2 2 2 2 3 2 2 4 Flat CCF Amount To levy a flat charge specify the flat amount This amount will be applied on the Basis Amount depending on whether you have defined the application basis as a slab or a tier Floor Basis Amount You should specify this only if the Amount Basis is a Tier This will be the upper limit of the previous tier limit By default the amount specified as the Basis Amount To for the previous tier limit will be displayed For the first limit in the tier do not specify this This amount along with the Floor CCF Amount is used to calculate the charge Floor CCF Amount You should spe
34. ollection of charge or fee If you opt for Stop Association the system will NOT calculate the charge at all Accrual Required This option is defaulted from the product charge class maintenance and cannot be modified Note This option is disabled for BC contracts Indicating whether Advice Processing Charges Need to be Collected You can choose to debit the customer account for the charges incurred for sending an advice to the customer through the various media types You also have the option of waiving these charges This specification is defaulted from the product to which the contract is linked You have the option of changing this while processing an individual contract Note This specification applies only to LC Bills and FT contracts Again at the time of saving the contract the system displays the Product Event Advices Maintenance screen wherein you will be allowed to do the following e Suppress an advice from being sent e Change the Priority of the advice i ORACLE 2 2 11 e Indicate that charges need to be collected from the receiving party Advices Event Code Description Advices Details 1081 Advice Name Description Generation Time Suppress Priority Charges Authorize No v High Specify the following details in this screen Product Code This indicates the Product code to which you have linked the contract Event Code This
35. owing information 22 ORACLE 2 2 1 Rule ID and Description You must specify a unique identification for the ICCF rule you are creating If you are creating a charge rule specify a unique identification for the charge rule This is the identification that will be used as to identify for the rule in all subsequent references to it You must also specify a unique description for the rule Every charge rule is identified by a unique ten character code called a Rule ID You can link a valid Charge Rule ID to the charge classes that you maintain in your bank Charges or fees for all products with which you associate a charge class will be calculated on the basis of the Rule ID that is associated with the class You must select the Rule ID to have all the bank branches listed in the Branch field list of options Note After the rule has been created the attributes for the rule must be defined in the ICCF Rule Details screen Branch Restrictions You can maintain a list of allowed branches that is the rule will be available for use in the allowed list of branches or disallowed branches the rule will not be available for use in the branches in the disallowed list To recall the attributes for the rule are defined in the ICCF Rule Maintenance screen Maintaining the attributes in this screen for a branch is subject to whether maintenance of ICCF rules is allowed for the branch and also whether the rule for which a
36. r Manual Processing Charges details the procedure to set up Charge or Fee details by Chapter 2 defining Charge rules and Charge classes It also explains the procedure for specifying charge details for a contract Glossary of Icons This User Manual may refer to all or some of the following icons Icons Function x Exit Add row 1 1 ORACLE 1 6 Icons Function 1 Delete row Option List Related Documents For further information on procedures discussed in the manual refer to the Oracle FLEXCUBE manuals on e Common Procedures e Products ORACLE 2 1 2 Processing Charges Introduction A charge or fee is a payment that you levy on your customer in exchange for advices or services rendered by your bank Banks charge nominal fees for various services such as courier charges SWIFT charges Bank charges generally constitute a major portion of revenue for the bank These type of charges are associated with al most all the activities of the bank For instance when a bank accepts corporate deposits it may also recover pre closure charges or pre payment penalty on the deposit Apart from charges bank collects fees also For example if there are any legal proceedings for any reason banks will debit the fees associated with this to the customer While setting up a product in Oracle FLEXCUBE attributes for ch
37. rges for provision of services To recall a charge rule is built to calculate a specific type of charge component Once such a rule is built you can define attributes like what should be the basis amount on which the charge rule is applied when the charge should be associated to the contract and when the charge should be calculated and collected When building a charge class you define certain attributes such as e The module in which you would use the class e The charge type whether borne by the counter party or by the bank e The association event e The application event e The liquidation event e The default settlement currency e The default charge rule e The basis amount on which the charge is calculated You can define the attributes of a charge class in the Charge Class Maintenance screen invoked from the Application Browser You can invoke this screen by typing CFDCHGCE in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Charge Class Maintenance Module List Description Class Code Description Charge Type z DebitiCredit Third Party Type Add Subtract Net Consideration Swift Qualifier Propagation Required Bl Association Event Application Event Liquidation Event Basis Amount Tag Default Charge Rule Default Settlement Currency Default Waiver capitalize MAllow Rule Amendment Consider as Discoun
38. se to allow amendment after the application event e You can choose to allow amendment of the charge amount Default Settlement Currency Charges or fees levied on a contract will be settled in the Settlement Currency that you specify for the charge class associated with the product under which the contract is processed However when processing a contract you can choose to settle the charge in another currency The charge currency defined for the rule is used only for booking charges The actual settlement is done in the default settlement currency maintained for the charge class The final charge is computed based on preferences defined in the charge rule set up The amount is converted to the settlement currency in case the charge currency is different from the contract currency Note For the liquidation of charge components with a charge currency not equal to the contract currency during discounting the charge amount is calculated in the contract currency based on the exchange rate between the settlement currency and the contract currency as on the discounting date The charge amount in contract currency is used for accounting ORACLE Ifthe charge currency is different from the contract currency and the contract cur rency is same as the settlement account currency the exchange rate maintained for the settlement account through the Settlement Message Details Account De tails screen is used to convert the ch
39. t WYlamend After Association Discount Basis z Mallow Amount Amendment Maccrual Required Ylamend After Application Flcollect LC Advising Charges in Bills Fields ELCs Date Time Checker Date Time Mod No Record Status Authorization Status The following are the features of the Charge Class Maintenance screen Class Code Before defining the attributes of a charge class you should assign the class a unique identifier called the Class Code and briefly describe the class A description would help you easily identify the class a0 ORACLE Module A charge class is built for use in a specific module As a charge component would be applied on different basis amounts in different modules In the Letters of Credit module for instance you would apply a flat processing charge or fee on all LCs In the Securities module you could levy a flat charge or fee on portfolios that you maintain on behalf of a customer The basis on which the component is applied is different in these two cases Note The Basis Amount Tags available would depend on the module for which you build the class Charge Type Charges can be collected from the counter party or from a third party You can select one of the following values from the adjoining drop down list e Counter Party This indicates that the customer is captured as part of the contract e Third Party This indicates that the charges are levied on
40. t click on add icon Thereafter click Default From Class button to select a class from the option list that is displayed To navigate among the charge classes associated with a product you can use the icons provided for the same To disassociate a class from the product navigate to the class and click delete icon Stop Association You can instruct the system not to calculate charge for a product by clicking this option The charge details specified for a product will be automatically applied on all contracts involving the product However while processing a contract you can waive the application of all or specific charge rules for the contract Propagation Required This option defaults from the Charge Class Maintenance screen but can be modified here if required Check this option to indicate that the Charge collected from the borrower must be passed on to the participants of the tranche or drawdown contract Settlement Currency Charges or fees levied on a contract are settled in the Settlement Currency that you specify for the charge class associated with the product under which the contract is processed However when processing a contract you can choose to settle the charge in another currency Following points are noteworthy for bills e For the liquidation of charge components with a charge currency not equal to the contract currency during discounting the charge amount is calculated in the contract currency base
41. ttributes are being defined is allowed for the branch For details about the Common Branch Restrictions refer the Security Management System user manual Building Charge Rule To recall after a charge rule has been created in the ICCF Rule Availability Maintenance screen the attributes for the rule must be defined in the ICCF Rule Maintenance screen A charge rule is built with the logic to calculate a specific type of charge component You can maintain this logic in the ICCF Rule Maintenance screen You can invoke this screen by typing CFDRUMNE in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button ORACLE If you are defining a charge rule click the New button on Application toolbar The ICCF Rule Maintenance screen is displayed without any details If you are calling a charge rule that has already been defined double click a rule of your choice from the summary screen ICCF Rule Maintenance E New amp Enter Query Rule Type Rule Id Transaction currency General Ledger Description Branch Code Customer Group Customer REGE Tenor Details Rate Type C Tenor Basis Rate Type Flat Amount Tiered Amount FIXED RATE Tiered Tenor Rounding Duration Based Period in Months Amount Interest Basis Rate T As per Contract Currency Minimum Amount F o Minimum Rate Booking Currency Charge Currency Maximum Amount
42. ule ID falls above the amount which is computed using the maximum rate defined in the rule then the amount which is computed using the maximum rate will be collected Minimum Amount If the charge is based on a fixed rate you should specify the minimum amount that can be applied on a contract involving the Rule ID If the charge calculated using this Rule ID falls below this amount for a contract the minimum amount specified in this field will be applied instead of the amount calculated using the fixed rate Minimum Rate If the charge is based on a fixed rate you should specify the minimum rate that can be applied on a contract involving the Rule ID If the charge calculated using this Rule ID falls below the amount which is computed using the minimum rate defined in the rule then the amount which is computed using the minimum rate will be collected Maximum Rate If the charge is based on a fixed rate you should specify the maximum rate that can be applied on a contract involving the Rule ID If the charge calculated using this Rule ID falls above the amount which is computed using the maximum rate defined in the rule then the amount which is computed using the maximum rate will be collected Tiered Amount You can create a Charge Rule that would calculate charges on the basis of an amount structure This structure could be in tiers or in slabs Check against Tiered Amount if the Basis Amount structure will be Tiers Leave it bla
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