Arrangement Architecture

By Harsha & Ramesh

AA

Arrangement is an agreement between the bank and interested

 party to provide an agreed service. AA
AA module provides ability to
create and manage arrangements for customers.
When a financial arrangement is created, !" will generate an
Account record, which maintains all activities. his account will
 be used for AA
AA from start to end.
#sers can create their own $roducts by using the
%omponents provided by emenos, and these components can be
reused across many $roducts.
AA was first introduced in R version
AA

AA is a ' tiered $roduct (rganisation

$roduct )ines defined by emenos,
$roduct *roups & $roducts defined by #sers.

$roduct )ines in AA+

)ending
nternet -ervices
Accounts
eposits
AA / $roduct )ines, $roduct *roups & $roducts
$roduct )ines 0%AR-1

$roduct *roups
AA / $roduct )ines, $roduct *roups & $roducts
AA / $roduct

2very product is an assembly of many components.

23+ )244* / we have components like

erm Amount, $ayment Rules, )imit,
$eriodic Rules, Accounting, nterest, etc.
hese components are serviced in AA.
AA 5 %omponent, Attributes & Action
%omponents or Property Class+ 0re/useable1
%ars+ 2ngine, ransmission, Wheels
)ending+ erm Amount, nterest, %harges
ifferent %ars may have different engines but they have common
characteristics 0fuel ype, Acceleration, op -peed1. hese are
Attributes
hey also have common behaviour 0engine /start, stop,
accelerate1 or Actions

A Component having Attributes & Actions is

called a Property Class
AA 5 $roperty %lass

Interest

$rincipal $enalty
nterest nterest

ype+ 6i3ed ype+ 6i3ed

Rate+ 7.889 Rate+ .889

 4amed ype or %opy of a $roperty %lass is called a PROPERTY

#sers can create new $R($2R2- of the e3isting $roperty %lass
$roperty %lass can only be created by emenos
Temenos Maintained

Propert
$roduct $roperty y Class
)ines %lass Attribut
es

$roduct
$roperty
*roups

$roduct
$roducts $roperty %onditions

User Maintained
All Share common attributes
AA )ending in a nutshell

• Arrangement is agreement between bank & customer as per agreed terms

& conditions.

• Arrangement conditions are defaulted from the pre/defined )oan product

conditions.

• %hanges to original product conditions can be done with tracked or non/

tracked option.

• Arrangements can be negotiated or amended at contract or account level.

 AA )ending 5 $roduct (verview
Constant

Linear %i$ed
Periodic
Repayment
Seasonal %loatin&

AA Loans User e!ined Periodic

Mi$ed
"ullet
Repayment
Le#el "and

Schedules
Simulation '
Re#erse
Repay
Repayment Interest
Schedule Schedule
AA )ending 5 -tatic ables

PERO#C!NTE
CUSTOMER CURRENCY 
REST

BASC! COUNTRY 
AA LOANS
NTEREST

NTEREST!
CATEGORY  "OL#AY 
BASS
AA )ending 5 :andatory 6ields
• Auto IDs are generated on:
 – Attempt to do arrangement: New Arrangement ID
 – Commit arrangement activity: Arrangement ID & Loan Account ID

• Customer : Primary Owner or orrower

 – !sed to initiate the arrangement
 – All customer record details are related on entry o" Customer
ID#mnemonics
 – Co$owner% guarantor details can be attached later in the main AA !I or
AAPA'()'OL* table

• Currency : Currency o" Arrangement

 – Currency speci+c conditions de+ned in C!''*NC) table are attached
 – alances are maintained in this currency
 – Interest and charges are calculated based on this currency conditions
 – Once the AA is processed the currency can not be amended
AA )ending 5 :andatory 6ields
• 2ffective ate + ate to process AA
 – efault +-ystem dates
 – #ser 2ntry+ $ast or future date
 – $rincipal isbursement & nterest capitali;ation are processed based on this date.

• Amount + %ommitment amount

 – Appears on the main AA # as the arrangement activity initiation is committed.
 – enotes the total amount that can be given to the specified customer.
 –  & : can be used in 2dit 6ield to denote thousand or million.

• erm + )oan $eriod

 – efault <alue+ erm specified in product condition
 – #ser nput+ %an be given in no of ays=Weeks=:onths=>ears if negotiation is allowed.

• Repayment 6re?uency + 6re?uency of loan=installment repay

 – efault <alue+ Repayment 6re?uency specified in product condition
 – #ser nput+ %an be given in no of ays=Weeks=:onths=>ears if negotiation is allowed.
AA )ending 5 (ptional 6ields
• Accounts officer + $rimary (fficer for loan
 – (ther officers can be defined.
 – Roles like Application approval, collection & disbursement can be specified for the
officers defined.
• )imits + -anctioned limit of the customer for the product
 – ):. R2662R24%2 can be specified in the )imit section. -o that the A%%(#4
level limit definition is mapped. While doing other activities, like disbursement to the
account, limit can control the amount to be disbursed.
 – -uitable overrides are generated if limit is e3ceeded or no limit reference is specified.
• Repayments + )oan repayment types
 – efault value+ Repayment option in main product definition
 – #ser efined value+
• ype+ Annuity=%onstant, )inear, Actual and #ser defined
• :ethod+ ue, %apitali;ation
• 6re?uency+ aily, :onthly, >early (4 nth ay of Week, :onth, >ear 
• $roperty+ Account, %apital/nt
AA lending 5 Arrangement Activities
• Activities are operations that are applied to Arrangements. -ome of the activities
are +
 – isbursement
 – Repayment
 – :ake ue %harges
 – nterest
 – Accruals
• $rocess e3ecution happens on activity launch. -ome of the processes are +
 – Balance #pdate
 – nterest calculation
 – Repayment -cheduling
 – Accounting
• #pdate arrangement
 – isbursements, $ayment updates, %harges + (nline update
 – nterest Accruals, notices+ %(B update
• Additional functionalities
 – %harges, (verrides, 4otice
• Activity )og
 – Bills ssued, :ade ue, $aid
 – Activity )og is displayed in the order of most recent activity first.
AA )ending 5 isbursement Activity
• isbursement is release of funds to customer on account of his=her arrangement with
the !" bank.

• isbursement can be single or multiple based on product condition.

• isbursement can happen in the arrangement currency or some other currency.

 – 23change Rate is fetched from %#RR24%> table.

• :ode of isbursement+
 –o customer account by 6unds ransfer application. AA account no is used as
debit account.
 –%ash disbursement by eller application

• isbursement can trigger associated processes. -ome of the processes are+

 – %harge generation
AA )ending 5 Repayment -chedule
• Repayment schedule is defined with the following attributes+
 – $ayment ype + %onstant=Annuity, )inear, Bullet payment of principal, #ser
defined
 – :ethod+ ue, capitali;e
 – 6re?uency+ 2very aily=Weekly=:onthly=>early 5(n Week=ay=month=year 
 – $roperty+ Account, $rincipal/nt
• $ossible to set differently for $rincipal & nterest
• Repayment Amount
 – Automatically calculated based on term amount, term, interest rate &
fre?uency
 – Residual amount is also indicated
 – Repayment amount can also be set manually for all or part of the schedule
•  4on/Business ay ad@ustment can be done through the following options+
 – 6orward
 – Backward
 – %alendar 
• efault value of repayment schedule is the schedule defined for product.
• :anual change is allowed if negotiation is allowed.
AA )ending / Repayment

• Repayment is payment of interest, capital, $enal nterest, %harges or all to

arrangement )oan account.
• Repayment can happen in the arrangement currency or some other currency.
 – 23change Rate is fetched from %#RR24%> table.
• + :ode of Repayment
 – 6rom customer account by 6unds ransfer application
 – %ash Repayment by eller application
• Repayment can trigger associated processes. -ome of the processes are+
 – #pdate of $rincipal & nterest outstanding
 – Receipt generation
• Repayment rules can be defined while defining the arrangement. -ome of the rules
are +
 – Apply by order of balance + 23 / %harges  nterest  $rincipal
 – Apply by ates+ 23 / (ldest first or oldest last
 – Ad/hoc=23cess payments over and above dues+ 23 5 eep as current balance
AA )ending 5 Revolving = 4on/Revolving
• Arrangement can be revolving or non/revolving.
 – Revolving+ Repayment of principal restores commitment amount.
 –  4on/Revolving+ Repayment of principal does not restore the commitment
amount.
• Revolving arrangement can have two options+
 – $ayment (ption+ Any payment will increase available credit limit.
• 6ully revolving %redit facility
 – $repayment (ption+ (nly prepayment or ad/hoc payment not against any due
increases the credit limit and payment against due does not reinstate the
available amount.

f Revolving is set to 4( & once a repayment is made to the Arrangement, further

disbursements will not be possible.
AA )ending / $ayoff 

• $ayoff is repayment when bills are settled in part or in e3cess.

• $ayment rules are defined to payoff dues in a specific order+
 – Bills age wise with every bill in order of+
• $enalty nterest
• 6ees
• $rincipal nterest
• $rincipal ue
 – Remaining amount is used to ad@ust %urrent $rincipal not yet due.
• Associated charges can be linked
• Repayment schedule is recalculated for e3cess payments
AA )ending / )imit

• )imit can be specified at arrangement level.

• f the ):.R2662R24%2 in AA.ARRA4*2:24.A%<> is filled, the
system checks for any secured or unsecured limit created for the )imit product for
the specified customer.
• f no limit record is found by system, error message would be thrown to create a
limit for the product & %ustomer.
• f limit specified for the customer covers the transaction amount in arrangement
activity, the transaction is accepted or else an override message is generated.
• When limit is not specified at arrangement level, override is generated during
disbursement
• )imit could be set e3clusively for a single arrangement or it could be set for
multiple arrangements.
AA )ending 5 (verdue :anagement
• (verdue is the treatment of bills if they are not paid in time.
• here are different status of (verdue bills. Bill aging can take either of the two basis+
 – By 4umber of days +
• elin?uent + first C days after due date for Dst bill overdue
• *race+ 7th to D8th day
•  4on Accrual Basis 04AB1+ DDth onwards
 – By 4umber of bills +
• elin?uent + first ! Bills
• *race+ #p to "th bills
•  4on Accrual Basis 04AB1+ Cth bill onwards
• Associated activities are set for every status change+
 – %haser 4otice generation at predefined fre?uency
 – Accrual of charges
 – Amounts can be moved to status balance+ %urrent  elin?uent  4AB Balance
AA )ending 5 (verdue :anagement
• (verdue posts receivables to $ & ).
• $ayment tolerance can also be set to allow overdue beyond a set amount or 9 of dues.
• -uspension of (ver dues +
 – -uspend Activity stops further accrual posting to $ & ).
 – -uspend (ver dues reverses unpaid accruals from $ & ) and stops posting.
-ubse?uent %hanges to Arrangement

• %ustomer
 – $rimary owner can not be changed
 – Addition=eletion=%hange possible for @oint owners
• %ategory
• isbursement
• %harge Activities
• nterest type, calculation type, periodic reset
• )imit Reference
• $ayment fre?uency
• erm amount and period
hank >ou