An Overview of T24 Loan

Operation

Prepared by
Sathish Kumar V

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Agenda

▸ Objective
▸ Introduction of Loan & Temenos “T24” Application
▸ Prerequisites Required for Loan Operation
▸ Parameters Involved in T24 Asset Life Cycle
▸ Loan Operation Process Flow

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Objective:
 To brief about the Functional and Application overview of Loan Operation
 Also, to provide the insights from the Banking domain in such a way it can be
correlated to similar application architecture
 Not intended to cover the complete Loan Operation and it functionalities.

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Introduction
Loan:
An arrangement in which a lender gives money or property to a borrower, and the
borrower agrees to return the property or repay the money, usually along with interest, at
some future point(s) in time. Usually, there is a predetermined time for repaying a loan,
and generally the lender has to bear the risk that the borrower may not repay a loan.

Temenos “T24”:
Temenos “T24” is Core Banking Application, which enables the Banks/Financial
Institutions to provide better customer service, and to offer more competitive products,
customized to the needs of specific market segments and individual customers.

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Loan Products:

Loan types vary because each loan has a specific intended use. They can vary by
length of time, by how interest rates are calculated, by when payments are due and by
a number of other variables.

 Term Loan (Individual & Corporate Loans)

 Project Loan
 Syndicated Loans

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Prerequisites Required
Below are the Prerequisites required to create a Loan in Temenos T24
System
 New / Existing Customer
 Valid Savings / Current Account for Repayment
 Limit Line / Credit Line

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Prerequisites Creation:

(I) Customer Creation Workflow in Temenos “T24”:

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Input all the mandatory fields and commit the record

Commit the Deal

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Enquire the Unauthorized record and Authorize the Customer

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 Authorize the Customer Deal

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(II) Creation of Accounts:

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Input all the mandatory fields and commit the record

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Enquire the Unauthorized record and Authorize the Account

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 Authorize the deal

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(III) Creation of Limit / Credit Line:

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Input all the mandatory fields and commit the record

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Enquire the Unauthorized record and Authorize the Limit Creation

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 Authorize the New Limit Deal

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Loan Initiation Process Flow:
Loan Initiation

Prerequisites
Creation

Customer
Accounts Limit Line
Individual/Corporate
Savings/Current

Loan Input

Authorization Rejected

Repayment Schedule Accounting Entries

Generated Raised

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Parameter Tables Involved for T24 Loan Creation:

Below are the T24 Parameters Tables which Factoring the

Loan Life Cycle

 LIMIT.PARAMETER : Values parametrized in this table, will

determine the Limit Line category should be used to create
Loan Product
 LD.PARAM : Values parametrized in this table, will influence
the Loan Product Min & Max Tenor, Min & Max Amount,
Interest Type
 LD.SCHEDULE.DEFINE : Loan Installment Schedule will get
generated the values parametrized in this table

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Key Fields which factoring the Loan Life Cycle:
Below are the Key fields, which impacting the entire Loan Life cycle:

(i) Tenor : Tenor denotes the life of the Loan Transaction, based on the Tenor
System will calculate the Repayment Schedules and Interest Amount

(ii) Interest Type : Based on the selection of this field, system will derive the
interest amount need to be paid by the customer at the time of repayment.
There are various Interest types can be used to create a Loan.
a. Fixed Rate
b. Periodic Automatic (Interest Rate subject to change based on the
market condition automatically by the system)
c. Periodic Manual (Interest Rate subject to change based on the
market condition by the User)

(iii) Repayment Type : Based on the value entered in this field system will
collect the Installment amount.
a. Bullet payment (Loan can be liquidated at one shot)
b. Arrears (System will collect the repayment amount as per the
schedule)

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Key Fields which factoring the Loan Life Cycle:

(iv) Repayment Mode : Values entered in this field will denotes, on what basis
the repayment will happen for the availed Loan Transaction.

a. Automatic (System will automatically debit the Customer Account

for the installment amount)
b. Manual (User will manually debit the Customer Account for the
installment amount based on the schedule which is generated at the time Loan
creation)

(v) Liquidation Account : System will debit the mapped Customer Account in
this field for Interest and Principle recovery.

a. Principle Liquidation Account (from which account Principle

Installment need to be recovered)
b. Interest Liquidation Account (from which account Interest amount
need to be recovered)

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Loan Creation in T24 System:

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Input all the mandatory fields and commit the record

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Authorize the Loan Deal:

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 System Generated Loan
Schedule post Authorization

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System Generated Account Entries post
Authorization

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 Thank You

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