Fixed-Term Deposit Processing 

Use

Bank Customer Accounts (BCA) monitors and controls term agreements throughout the term duration by using the following reports:

·        RFBKTDEPOSITCOLLECTION, Collect Deposit Amount for Fixed-Term Deposit

Use this report to collect the contract amount on term agreements.

·        RFBKTTERMCONTROL, Fix Fixed-Term Deposit Accounts

Use this report to fix the term agreement details.

·        RFBKTTTERMMATURE, Call Fixed-Term Deposit Accounts

Use this report to call the term agreement on the term end date.

·        RFBKTTERMPRENOTICE, Prenotification of Maturity-Term Deposit Accounts

Use this report to notify the customer about the approaching maturity of a term agreement.

Separate application logs record the messages that are generated when you execute each of these reports.

The following reports are also available:

·        RFBKTTERMPOSTPROCESSING, Postprocessing Fixed-Term Deposit Accounts

Use this report to generate a list of term agreements that are In Postprocessingand then manually process such accounts.

·        RFBKTTERMRESTART, Restart Fixed-Term Deposit Accounts

Use this report to restart the processing of all the term agreements that are In Postprocessing.

Integration

You enable the Term Agreement for Fixed Deposits feature for products in Customizing for BCA by choosing Master Data ® Product Definition ® Product ® Create Product or Change Product. The following product attributes that you specify for the term agreement feature affect the process flow and the checks for term agreements:

·        Term Start According to Value Date-Based Account Balance

The term start is determined by the Fix Fixed-Term Deposit Accounts report based on the value date of the payment item or payment order that causes the account balance to reach or exceed the contract amount.

The system makes the following changes if necessary:

¡        Replaces the term start date with the value date of the payment item or order.

¡        Computes the term end by using the term specified for “fixed” term agreements.

¡        Computes the term duration by using the term end for “variable” term agreements.

If, however, the account balance does not reach the contract amount even on the Latest Term Start date, the system carries out either of the following activities (based on the product settings):

¡        Changes the contract amount to the account balance

¡        Places the term agreement In Postprocessing

·        Term Start for Each Entry

The term agreements are fixed on the specified term start date if the account balance equals the contract amount. If, however, the account balance does not equal the contract amount, the system adjusts the contract amount to the account balance or places the term agreements In Postprocessing (based on the product settings).

·        Call on Working Days Only

When term agreements are fixed, the determined maturity date is automatically set to the previous working day if the term end is on a non-working day.

·        Deposit Adaptation While Fixing Time Deposits

The system adapts the contract amount to either the minimum deposit or the maximum deposit when you execute the Fix Fixed-Term Deposit Accounts report on the Term Start date.

¡        Deposit adaptation up to minimum deposit

The contract amount is changed to the account balance if the account balance meets the following conditions:

§         Is less than the contract amount

§         Is equal to or greater than the minimum deposit amount

¡        Deposit adaptation up to maximum deposit

The contract amount is changed to the account balance if the account balance meets the following conditions:

§         Is greater than the contract amount

§         Is less than or equal to the maximum deposit

Irrespective of the product setting, the system places the term agreement In Postprocessing if the account balance falls outside the minimum and maximum deposit range that you have defined.

·        Time Deposit Rollover

You can define future term agreements (rollovers) for existing term agreements only if you activate this attribute.

·        Term End Action and Rollover Data

You can define whether a term agreement must be disbursed or rolled over when it reaches the term end date. For rollovers, you can also define varied terms and contract amounts.

·        Run Term Balancing

The system balances the term agreement for the entire term duration only on the term end date if you enable this product attribute (in the Account Balancing feature).

Scope of Functions

Collection Process

Prerequisite

You have enabled automatic collection of the contract amount in Customizing for BCA by choosing Account Management ® Basic Functions in Account Management ® Maintain Payment Transaction Settings for Deposit Banking ® Posting Day Shift for Automatic Collection.

The Collection Process

The Collect Deposit Amount for Fixed-Term Deposit report selects all term agreements whose collection date is on or before the current posting date. The report then collects the contract amount from the reference account for collection.

The collection process varies based on whether the term agreement has already been fixed:

·        Term Agreements Not Yet Fixed

The collection report selects term agreements with the Created or In Postprocessing status and collects the entire contract amount irrespective of the account balance.

·        Term Agreements Corrected After Being Fixed

The collection report selects term agreements with the In Correction Mode status and compares the contract amount and the account balance. If there is a difference, the report collects or disburses the difference.

The system creates a payment order to record the transaction. You can restrict the payment transaction activities that are allowed during the Preliminary Phase of term agreements in Customizing for BCA. Specify the allowed payment transaction activities by choosing Account Management ® Basic Functions in Account Management ® Maintain Payment Transaction Settings for Deposit Banking ® Maintain Payment Transaction Activities for Term Products. The system correspondingly parks, posts, or rejects the payment order.

Fixing Process

The Fix Fixed-Term Deposit Accounts report selects term agreements that meet the following conditions:

·        Term agreement status is Created, In Postprocessing, or In Correction Mode.

·        Term Start date is on or before the current posting date.

·        Latest Term Start date is on or before the current posting date.

The report then compares the account balance and the contract amount. The following scenarios can occur:

·        The account balance is the same as the contract amount.

The term agreements receive the Fixed status.

·        The account balance and contract amount are different.

The term agreements receive the Fixed status if the account balance is within the minimum and maximum deposit range and deposit adaptation is allowed.

The term agreements receive the In Postprocessing status if the account balance is outside the minimum and maximum deposit range or if deposit adaptation is not allowed.

To notify customers about the term agreements that are fixed, the system initiates the Business Transaction Event (BTE) 11035 at the end of the Fix Fixed-Term Deposit Accounts report.

Prenotification Process

The Prenotification of Maturity-Term Deposit Accounts report selects term agreements whose predefined notification date is on or before the current posting date. You can specify that the customer must be notified about the approaching maturity of a term agreement by setting the Prenotification of Maturity indicator and entering the appropriate Number of Days on the account maintenance screen.

The system calls BTE 11036 when you execute the Prenotification of Maturity-Term Deposit Accounts report.

Calling Process

The Call Fixed-Term Deposit Accounts report selects term agreements whose maturity date is on or before the current posting date. The system determines the maturity date based on whether you have enabled the Call on Working Days attribute for the product. The maturity date can be either of the following:

·        One posting day before the term end date if you have enabled the product attribute.

·        One calendar day before the term end date if you have not enabled the product attribute.

The report selects term agreements with the Fixed or In Postprocessing status.

The system balances the selected accounts for the entire term (excluding the term end date) and takes either of the following steps:

·        Transfers the contract amount to the disbursement reference account.

The interest amount is also transferred to the disbursement reference account if you do not specify a reference account for balancing.

·        Initiates a rollover according to the term agreement data.

The report updates the details for the next term agreement and computes the contract amount. The interest for the previous term agreement is also included in the contract amount if you have not specified a reference account for balancing.

For repayments (partial or full), the system creates a payment order to transfer the amount to the disbursement reference account. You can restrict the payment transaction activities that are allowed during the Fixing Phase of term agreements in Customizing for BCA. Specify the allowed payment transaction activities by choosing Account Management ® Basic Functions in Account Management ® Maintain Payment Transaction Settings for Deposit Banking ® Maintain Payment Transaction Activities for Term Products. The system correspondingly parks, posts, or rejects the payment order.

To notify customers about the matured term agreements, the system calls the BTE 11037 at the end of the Call Fixed-Term Deposit Accounts report.

Activities

...

       1.      You create term agreements on the account (see: Maintaining Term Agreements for Fixed-Term Deposits).

       2.      You schedule the reports in the end-of-day processing. You can restrict the selection by specifying the bank area, product, and account.

       3.      You can view the term agreements placed In Postprocessing by using the Postprocessing Fixed-Term Deposit Accounts report and then manually process them.