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Function documentationTerm Agreement Administration

 

You can use this function to specify term agreement details that are used by and control processes such as collection, fixing, and calling. The function also determines when correspondence must be initiated for term agreements.

Prerequisites

You have enabled the Term Agreements feature for the product on which the account is based. You enable this feature for products in Customizing for Bank Customer Accounts (BCA) by choosing Start of the navigation path Master Data Next navigation step Product Definition Next navigation step Product Next navigation step Create Product End of the navigation path or Start of the navigation path Change Product End of the navigation path.

You have also made the required settings and defined default values for the Term Agreements feature.

Features

Term and Non Working Days

You can compute the term end date or the term duration by choosing Calculate Term/End of Term.

If the computed term end date of the last rollover is a non-working day, you can choose to change the term end date. If you change the term end date, the system checks that the changed term duration falls within the minimum and maximum term duration.

Original Term

The system uses the original term duration to compute the rollover term for an identical rollover. If the field Original Term Duration is empty, the system uses the term duration of the current term to compute the rollover term for an identical rollover.

Account Closure at Term End

You can specify that the closure process must be initiated at the term end of the last rollover. If you choose Close Account on Term End Date, the system updates the planned account closure date with the term end date of the last rollover.

Reference Accounts for Collection and Disbursement

You can choose either an internal or an external account as a reference account. You can replicate the reference account for collection as the reference account for disbursement by choosing Copy Reference Account (Copy Reference Account)

. In the same way, you can also replicate the reference account for disbursement as the reference account for collection.

Manual Collection

To enable manual collection, make the required settings in Customizing for Bank Customer Accounts (IS-B-BCA), by choosing Start of the navigation path Account Management Next navigation step Basic Functions in Account Management Next navigation step Maintain Payment Transaction Settings for Deposit Banking Next navigation step Posting Day Shift for Amount Collection End of the navigation path.

You can choose Collect (Collect) to manually collect the difference between the account balance and the contract amount from the collection reference account. If the account balance is less than the contract amount, the system collects the difference amount from the collection reference account. If the account balance is more than the contract amount, the system disburses the difference amount to the disbursement reference account.

You can manually collect the collection amount as follows:

  • After you specify a collection reference account and save the account

  • Until a payment order is generated by the collection process

Correspondence

You can specify when the system must initiate correspondence to the customer. For more information, see Correspondence.

Rollovers

You can specify that the term agreement must be renewed on maturity by maintaining the rollover data.

Automatic Update of Rollover Data

When a term agreement is rolled over, the system automatically updates the following information based on the rollover data that you have defined:

  • Contract amount (including any increase/decrease that you specify)

  • Term start

  • Term end

  • Term duration

The system also updates the status of the term agreement to Created.

History

The system displays all details of term agreements that were called.

Term and Contract Amount Range

To manage term agreements for a particular fixed term deposit account, you can define the following:

  • The range of terms (minimum and maximum term) that each term agreement for the account can have

  • The range of contract amounts (minimum and maximum contract amount) that each term agreement for the account can have

    You can define a default value for the minimum contract amount in Customizing for Bank Customer Accounts (IS-B-BCA), by choosing Start of the navigation path Master Data Next navigation step Product Definition Next navigation step Product Next navigation step Maintain Minimum Deposit Next navigation step Maintain Minimum Deposit for Products End of the navigation path or Start of the navigation path Maintain Minimum Deposit (Period-Dependent) End of the navigation path.

Activities

Maintain Term Agreement Data

You maintain term agreement data on the Term Agreement: Current Term and Term Agreement: Other Terms tab pages on the account master record.

Change a Term Agreement That is Fixed

You can change the term duration, term end date, and contract amount after a term agreement is fixed by choosing Change Term from the application toolbar.

Example Example

To disburse the contract amount before the term end date, you can change the term end date and execute the fixing and calling reports.

End of the example.

When you change the above-mentioned term agreement values, the system performs the following activities:

  • Changes the status of the term agreement to In Correction Mode

  • Confirms that the new contract amount falls between the minimum and maximum deposit range

  • Confirms that the new contract duration (term) falls between the minimum and maximum duration

  • Confirms that the new term end date is on or after the current posting date. In addition, the term end date must be before the planned account closure date.

  • Updates the rollover data if you change the term duration or term end date

You must fix the corrected term agreement once again after executing the collection process as required. For more information, see Fixed-Term Deposit Control.

Delete a Term Agreement

You can delete term agreements that have the status In Postprocessing During Collection.

Note Note

You can delete term agreements with the following statuses if you specify that message 1FA 506 must be a warning in the Customizing for BCA:

  • In Correction Mode

  • In Postprocessing During Fixing

  • Created

  • Fixed Based on Posting Date

You define the message control settings by choosing Tools -> Change Message Control.

End of the note.

To delete a term agreement, perform the following activities:

  1. Delete any of the following values:

    • Contract amount

    • Term start date

    • Term end date

    • Term duration

  2. Confirm the deletion when saving the account.

More Information

For more information, see Condition and Condition Fixing for Fixed-Term Deposit Accounts.