Periodic Charges

Attribute level explanation of the Periodic Charges Product Condition is given below.

Currency

When the arrangement currency and charge currency are different, the system converts the charge amount to arrangement currency and then evaluates the charge against the arrangement currency that is defined in Periodic Charges Property.

Debit

Minimum charge amount can be specified for the associated Currency attribute. The AA.CHARGE.DETAILS is updated with the actual calculated charge amount and the charge amount that has been billed after applying Debit. If the user enters the currency, it is mandatory to enter either the maximum or minimum charge amount

Maximum Charge Amount

Maximum charge amount can be specified for the associated Currency attribute. The AA.CHARGE.DETAILS is updated with the actual calculated charge amount and the charge amount that has been billed after applying Maximum Charge Amount. If the user enters the currency, it is mandatory to enter the maximum or minimum charge amount.

Credit

The user can define the minimum charge amount to be paid for the Currency attribute, if the net charge amount is a Credit.

Max Chg Amount Cr

The user can define the maximum charge amount to be paid for the Currency attribute, if the net charge amount is a Credit.

Waive Charge

The Waive Charge attribute specifies if the entire periodic charge amount is to be waived off. Available values are:

• Yes—Entire periodic charge amount can be waived
• None—Periodic charge amount can be applied.

Handoff Charge

It allows the user to instruct the system to handover the charge to the settlement account by setting the value to Yes.

Free Charge

The Free Charge attribute is similar to the Charge Group attribute, but is associated with Free Txn Count attribute, so as to allow definition of number of free transaction per group.

Free Txn Count

This field defines the number of free transactions per group and accepts a valid number or value All, which denotes that all transactions pertaining to group are exempted. The system ensures to validate if the Free Txn Count attribute is defined for all Charge groups used in the Periodic Charge Property.

Charge

The user can specify the Charge Property associated with Charge Activity, which specifies the charge to be applied on schedule date.

There can be multiple activities attached to a Single Charge Property.

When an Activity is associated with charge, then the source type for the Charge Property is expected to be ACTIVITY and SOURCE CALC TYPE can be TXN.AMOUNT or COUNT.

• TXN.AMOUNT—Sum of transaction amount for the associated Activity in the given period.
• COUNT—Total number of times when the Activity has been triggered within schedule period.

If no Activity is specified then charge is calculated on base balance if defined in Product catalog.

Charge Group

Different charge groups can be defined in AA.CHARGE.GROUP virtual table, which is available as a drop down for user to select. Charge group can be defined only for those charges which are calculated based on activities.

Charge group can be left empty denoting charges that are not part of any specific group and free transaction count cannot be defined.

Activity

It allows the user to define an Activity on top of which the charge amount can be calculated. The Activity calculates the base amount on top of which charge is calculated.

Periodic charges allows Activity from multiple Product Lines only when the arrangement belongs to a Bundle and Property Control is enabled for this bundle.

Incl All Deferred Charges

This attribute indicates whether the deferred charges are to be made due on the scheduled date.

Deferred Charges

The user can use this multi value attribute to specify the Charge Properties that are deferred and to be made due.

It can be set either at the Product level or at the Arrangement level.

The system allows the user to adjust, override or waive the charge by providing a reason for a specific period of time after which the original charge can be restored.

• The Type attribute allows the user to select whether they are adjusting the final amount, overriding it with a different amount or waiving it altogether.
• The user has the option to,
  • Adjust either the Charge Amount or the Charge percentage value
    • The Type attribute is set to Adjust and either Adjust Amount or Adjust Percentage is used.
    • The Adj Percent or Adj Amount field is applicable only for Debit Charges and not for Credit Charges like Bonus.
  • Override the charge amount to the amount specified
    • The Type attribute is set to Override This option is used to specify the final charge amount by using the Adjust Override Amount attribute. In this case, the system overrides the calculated charge (including the Pricing Rules or discounts).
  • Waive the entire Charge
    • The Type attribute is set to Waive to waive the charges fully.
  • The Adj Amount attribute allows the user to specify the discount or mark up amount to be applied to the calculated charge amount. For example, for a debit charge, if the calculated charge amount is $100 and discount is $25, then the final charge amount is $75 that is, $100 - $25. For a credit charge, the final amount is $125.
  • Input is allowed only when the Type attribute is set to Adjust.
  • Mutually exclusive with the Adj Percent attribute.
  • If the amount specified is greater than the calculated charge amount, then the entire charge is discounted.

• The Adj Percent attribute allows the user to specify the percentage by which the calculated charge amount will have to be reduced or increased.
• • Input is allowed only when the Type attribute is set to Adjust.
  • Mutually exclusive with the Adj Percent attribute.
• The Override Amt attribute allows the user to specify the actual charge amount, that is, the amount specified here is the final charge amount and no calculation is performed based on the actual condition or discount rules. Input is allowed only when the Type attribute is set to Override. Percentage.
• The Adj Reason attribute lists the values from the AA ADJUSTMENT REASON virtual table (EB.LOOKUP). The reason for waiver or adjustment such as Valued Customer, Customer Retention is recorded here.
• The Expiry Date attribute allows the user to specify the date after which the adjustment or waiver or override in charge is not applicable. From this date, the arrangement resumes its charge processing as per Arrangement Condition (which is either the defaulted Product Condition or negotiated value with any pricing rule).
  • The System schedules <PL>-EXPIRE.ADJUSTMENT-CHARGE Activity for the expiry date to restore the original Charge Conditions.
  • In order to intimate the customer about the expiry of the Adjustment setup, the <PL>-EXPIRE.ADJUSTMENT-CHARGE Activity Class is configured in Activity messaging.
  The system does not update AA.CHARGE.DETAILS for Balance Maintenance Activity. When a bill is adjusted, it recorded in the adjustment details in AA.BILL.DETAILS and not in AA.CHARGE.DETAILS.

At the arrangement level, it is possible to change the value in the Incl All Deferred Charges attribute that defaults from the product level and specify the charge to be deferred in the Deferred Charges attribute.

• To make the deferred charges due, the Periodic Charges Property must be defined as part of the payment schedule and frequency. Payment Schedule defines the interest at which the deferred charges to be made due. Periodic charge must be a separate payment in payment schedule.
• Whenever a new arrangement is created, the system schedules the Issue Activity of periodic charges like any other Payment Schedule Activity. On the schedule date, the system checks for deferred charges, raise bills if any and the make due processing takes care of generating accounting entries.
• Periodic charges of Defer property type, can be set to generate the bills in advance in Payment Schedule. If it is not of Defer type, then the following override message is raised during arrangement creation: 'Bill Produced set for Periodic Charge Property'. Also if Defer type Periodic Charge is not set to issue bill in advance, the system raises an error.
• Periodic charges scheduled can also be extended and collected beyond the loan maturity or payment end date using the Extend Cycle field in the corresponding Payment Type. The periodic charge bills are generated till the arrangement moves to Pending Closure or Closed status.
  • The system raises an error if the loan’s maturity date has a defer type periodic charge’s due date (bill issued and made due on the maturity date) indicating Payment Type is not set as Extend Cycle. Thus system ensures that all deferred charges are made due till the loan is closed.

Consider a scenario where there are couple of charges deferred and yet to be made due. Now if the contract is pre-closed.

The AA.CHARGE.DETAILS stores the discount details and discount reason.

• Discount details offered are stored as part of associated multivalued set under the Activity ID.
• Benefit Type, Adjustment Reason and Adjustment amount are stored for each Charge Activity.