Core Banking 20.2.3

User Guide

Copyright © FintechOS 2021. All rights reserved. CORE BANKING 20.2.3 USER GUIDE TOC

Overview 5 Banking Product Factory 5 Applications 5 Limit Management 7 Group Exposure Types 7 Customer Exposure Types 8 Validations 8 Calculation of Available Limit Amount 10 Limit Business Statuses 10 Adding Limits for Legal Entities in the FintechOS Portal 11 Group Management 17 Collateral 20 FTOS_CB_CollateralRegister Entity 20 Journey - FTOS_CB_CollateralRegister 21 FTOS_CB_CollateralRegister – After Insert - Event trigger 21 FTOS_CB_AfterUpdateCollateralRegister– After UPDATE - Event trigger 22 FTOS_CB_CollateralRegisterOwner Entity 22 Form - FTOS_CB_CollateralRegisterOwner – Default form 23 FTOS_CB_Contractcollateral Entity 23 Journey - FTOS_CB_Colntractcollateral 23 SERVER SCRIPTS 24

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Collateral Management 27 Registering a Collateral 28 Deposits 33 Banking Product Configuration 33 Main info 33 Details 34 Availability 36 Contract deposit configuration 37 Deposit interest calculation 38 Banking Contracts 42 1 Overview 43 1.1. Common Data 43 1.2. For a Product having Product Type = Account, Banking Product = Current Account 44 1.3. For a Product having Product Type = Deposit, Banking Product = Fixed Deposit 44 1.4. For a Product having Product Type = Term Account, Banking Product = Unsecured Loan or Secured Loan 45 1.5. For a Product having Product Type = Overdraft, Banking Product = Unsecured Overdraft or Secured Overdraft 47 2 Collaterals 48 3 Payments 50 3.1. Common Data 50 3.2. For a Product having Product Type = Term Loan Account, Banking Product = Unsecured Loan or Secured Loan or for a Product having Product Type = Overdraft, Banking Product = Unsecured Overdraft or Secured Overdraft 52 4 Contracts & Documents 52

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5 History 52 6 Accounting entries 53 Loan Contract Lifecycle 55 Transaction Types 58 Attributes: 60 Transaction Type Values: 60 Transaction Item Accounting Configurations: 61 Transaction Accounting Models: 61

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Overview

The Core Banking encapsulates the major banking processes and configurations needed to create and maintain banking products configured and tailored to the bank's offerings, configurations of transactions and set up of interest and commissions. It embeds the:

l Lead Management

l Collateral Management

l Deposits

l Banking Product.

These processes are configured in a FintechOS Portal. Afterwords, the configuration of a product is done through the automation processor.

Banking Product Factory

This is a powerful automation processor accessed in the FintechOS Studio that builds the products to be used in a digital journey, configures the interest, commissions and the lifecycle of a product. Those products are then introduced to a digital journey or in the case of Banking Product Factory for Enterprise it associated the products with the transactions. For more information, see Banking Product Factory.

Applications

The Core Banking can facilitate business processes, such as:

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l Digital onboarding

l Loan origination

l Product portfolio management

l Approval flows.

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Limit Management

The exposure is the risk a bank is taking on for writing the loan. Every time a bank grants any type of credit facility to a customer (a loan), they incur exposure to something or a number of somethings. Simply put the bank will monitor its exposure to various things, which could negatively affect the customer. The bank will use various algorithms to calculate their exposure to any of the above, but we will assume they simply add up their exposure. For the length of this page, when referring to a loan, it refers to all types of : unsecured loan, secured loan, overdraft, promissory note, working capital loan. In FintechOSCore Banking an exposure can be related to a group or to a customer. The approval of limits is subject to validation, depending on the type of customer. These validations are detailed below.

Group Exposure Types

l Total Exposure - the sum of (a) the aggregate principal amount of the Loans of a Lender

l Country Exposure - the limit placed by a bank on the number of loans that can be given to borrowers in a particular country. They are used to control the ' risk exposure to particular regions

l Company Exposure - the banks' exposure to a single non-banking financial company (NBFC)

l Product Type Exposure - the maximum amount of credit an institution extends to the group for a specific type of product.

l Product Exposure - the maximum amount of credit an institution will extend to the group for a specific product.

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l Exchange Exposure - the risk a company undertakes when making financial transactions in foreign currencies. All currencies can experience periods of high volatility which can adversely affect profit margins if suitable strategies are not in place to protect cash flow from sudden currency fluctuations.

Customer Exposure Types

l Total Exposure - the sum of (a) the aggregate principal amount of the Loans of a Lender.

l Product Type Exposure - the maximum amount of credit an institution will extend to the customer for a specific type of product.

l Product Exposure - the maximum amount of credit an institution will extend to the customer for a specific product.

l Exchange Exposure - the risk a company undertakes when making financial transactions in foreign currencies. All currencies can experience periods of high volatility which can adversely affect profit margins if suitable strategies are not in place to protect cash flow from sudden currency fluctuations.

Validations For Customers Not Belonging to Groups

Total Exposure is validated to be unique. Product Type Exposure is validated against the approved and active total exposure set on the customer. Product Exposure is validated against the Product Type Exposure if exists. If a Product Type Exposure does not exist, it will be validated against the Total Exposure.

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Exchange Exposure is validated against Total Exposure. For a customer that belongs to a group, the validations are: Total Exposure is validated to be unique and it is validated against the Total Exposure set on the group When a group defines a Company Exposure, a Total Exposure is automatically created for that company. All the other limits are validated against their correspondent set on the customer’s group, if exists. If the correspondent does not exist, there are validated against total exposure from the group. The account limit currency will automatically be filled in with the group limit currency. For Groups

Total Exposure is validated to be unique. Product Type Exposure is validated against the approved and active Total Exposure set on the group. Product Exposure is validated against the Product Type Exposure if exists. If a Product Type exposure does not exist, it will be validated against the Total Exposure. Company Exposure is validated against the approved and active total exposure set on the group. Country Exposure is validated against the approved and active total exposure set on that group. Exchange Exposure is validated against Total Exposure. It is possible to define as many limits with the same Type (on Group or on Customer) as long as only one Limit (Type) = Approved. After setting the limits, the loan approval will be validated against those limits, as detailed below:

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l if there is not at least one limit set at the customer or group level, the approval of the loan will not be possible and an explicit error will be displayed.

l contract maturity date cannot exceed the limit’s expire date and an explicit error will be displayed.

l loan amount cannot exceed corresponding limit amount. If not, an explicit error will be displayed.

Calculation of Available Limit Amount

After loan approval, the available amount for each corresponding limit will be recalculated by substracting loan amount from limit amount. When calculating the group limit available amount, the application will take into account all group members. If the limit currency and loan currency are different, the application will automatically convert the loan amount using the current exchange rate. All group and customer limits are updated daily in accordance with the exchange rate. This is done via a job called ‘Daily Limit Recalculation’. After a loan is closed, the available limit amount will increase with that loan amount. If a customer that already has approved contracts becomes member of a group, all it’s active limits will be suspended. Same behavior is applied when excluding a customer from a group. If a customer is a child company for more than one company which are part of different groups, it should have impact in the available limit amount on the group to which it was first added, unless if it was already part of a group.

Limit Business Statuses

A limit has the following business statuses:

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l Draft

l Approved

l Closed

l Suspended.

IMPORTANT! For the limit to be applied, it must be in Approved status.

Adding Limits for Legal Entities in the FintechOS Portal

You can add limits and groups while defining customers using the Single Customer View -> Legal entity menu. The limit is taken into consideration when a contract is approved, and the limit is reset when the contract is closed. To add a limit, follow these steps:

1. Log into FintechOS Portal. In the main menu, navigate to Single Customer View -> Legal entity menu option. From the newly opened page you can add a new company or to modify an existing one. To access the limits and groups, once the legal entity has been created and saved in the database, you can access the Group & Limits tab.

2. Navigate to the Group & Limits tab.

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3. Two fields are displayed: the checkbox is Group and Account Limit Currency. If true, the checkbox marks the legal entity as being a group. The Account Limit Currency opens a drop-down to select the currency that will be used later on when creating limits. This currency acts as a reference for the limits added further on. Two sections are displayed below, Limits and Members. Members is relevant if the company is a group, because this is where the members of the group are added.

4. In the Limits section, the list of existing limits is displayed. To add a customer limit, click the Insert button.

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5. Fill in the following fields (valid for a legal entity and for a group): Field Data Type Description

Currency Lookup Select the currency for the limit in particular.

Select the type from the list as explained above:

l Total Exposure

l Product Type Exposure

l Product Exposure

l Exchange Exposure

l Exchange Exposure

l Country Exposure

l Company Exposure. Limit Type Option set

IMPORTANT! The correlation between the limits and group is important as the limits on the parent entity affect the child entities. If the legal entity is a group, two additional types of exposures are available country and company exposure.

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Field Data Type Description

Select from the list the period type:

l days Expire Option set l weeks Period Type

l months

l years.

Expire Whole Insert the number for the period, e.g. 4., i.e. 4 Period number months.

Expire Date Date Select a date when the limit will expire.

Review Date Date Select a date when the limit will be reviewed.

Limit Select the sum of money to be the limit for the Numeric Amount credit.

This field is auto-filled by the system with the Available remaining sum of money, e.g. if the total exposure Limit Numeric was $5 million, a credit was given for $3 million, $2 Amount million will be available.

If the legal entity is not a group, this field is read- Group Lookup only. If the legal entity is a group, the name of the group will be automatically filled in.

Depending on the type of exposure selected, each type may display additional fields:

Additional Data Type Description Fields

Exchange exposure

Exchange Lookup Select from the list the currency. currency limit

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Additional Data Type Description Fields

Product Exposure

Select from the list the product. From the total exposure amount, a user can set a limited amount Product Lookup to be given on a certain product. For example, for a corporate term loan to give only $2 million dollars while the total exposure is $3 million.

Product Type Exposure

Select from the list the type:

l

l term loan

l card Product type Option set l overdraft

l leasing

l mortgage

l credit card.

Product type Boolean If true, then the type is secured by an asset. is secured

Country Exposure

Select from the list the country where the limit will Country Lookup be available.

Company Limit

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Additional Data Type Description Fields

Select from the list of members the company for which the limit applies. For details on Groups, see "Group Management" on the next page.

Company Lookup

6. Click the Save and reload button. Repeat to add as many limits as needed.

IMPORTANT! For the same customer, only one limit exposure can be added.

In the Contracts section, the existing contracts for the banking products are displayed. To export the list, click on the Export button.

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Group Management

FintechOS Core Banking System allows users to define not only customers, but groups of customers as well. A corporate group or group of companies is a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control. To define a group, the user has to check the boolean Is group option in the Group&Limits tab. After the field is checked, the group name will be automatically populated with the customer’s name and the user has the possibility to insert a rating and a limit currency for that group.

New members of the group can be added by clicking on the Insert button from the ‘Members’ tab. If a member has other members associated with it, they will all be displayed in the same section. For a more clear picture of the group, the user can insert an ownership percent, determined by dividing the number of shares they own by the number of outstanding shares.

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If a company also has subsidiary companies (sometimes referred to as a child company), these can be added by clicking Insert button from the Members tab. Therefore, a customer’s child companies will be displayed in the Members tab.

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For a more clear picture of parent companies, there is one more grid that can be used, called Holding Companies. Therefore, a customer’s parent companies will be displayed in the 'Holding Companies' grid. If a customer is a child company for more than one company that are part of different groups, it should have impact in the available limit amount on the group to which it was first added.

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Collateral

Collateral is an item of value that a lender can seize from a borrower if he or she fails to repay a loan according to the agreed terms. One common example is when you take out a mortgage. Normally, the bank will ask you to provide your home as collateral. This means that if you fail to meet the repayment terms of your mortgage, the bank has the right to take ownership of your home. The bank can then sell your home in order to recoup the money that it lent to you. Collateral acts as a guarantee that the lender will receive back the amount lent even if the borrower does not repay the loan as agreed. There are 2 types of collateral:

l Fixed deposit collateral

l Real estate collateral.

FTOS_CB_CollateralRegister Entity

FTOS_CB_CollateralRegister is the entity where all collaterals are held.

Property name Description name Collateral Name customerId Collateral customer Id Type of collateral. Here you can enter several types of collateral collateralTypeId from two categories: Cash Collateral and Real Estate marketValue Market value of collateral. – Only for Real Estate Collateral availableValue The collateral remaining value to be used The adjusted value of collateral after Evaluation – Only for Real adjustedValue Estate Collateral currencyId Collateral currency lastEvaluationDate Last Evaluation Date nextEvaluationDate Next Evaluation Date descriptionCollateral Description of collateral attachedFile Attached collateral files

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Property name Description bankAccountId Bank account Id - only for Cash Collaterals

Journey - FTOS_CB_CollateralRegister

This journey is used for CRUD operations for collateral registration. Inputs are displayed depending on the type of collateral (fixed deposit or property)(After Events – Step 1).

FTOS_CB_CollateralRegister – After Insert - Event trigger

if (collateralType.name === 'Fixed deposit') { var businessStatusId = getBusinessStatus("FTOS_CB_BankAccount", "Blocked"); changeBusinessStatus('FTOS_CB_BankAccount', data.bankAccountId, businessStatusId); }

After inserting a Fixed deposit collateral – the business status of associated Bank Account will be “Blocked”.

insert("FTOS_CB_CollateralRegisterOwner", { name: 'auto', collateralRegisterId: context.id, customerId: data.customerId });

The customer become Collateral Owner. A collateral can have many owners. They are found in the entity FTOS_CB_CollateralRegisterOwner

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FTOS_CB_AfterUpdateCollateralRegister– After UPDATE - Event trigger

if(validationOR){ var collateralType = getById('FTOS_CB_CollateralType', mergedValues.collateralTypeId); if (collateralType.name === 'Fixed deposit') { var businessStatusId = getBusinessStatus("FTOS_CB_ BankAccount", "Opened"); changeBusinessStatus('FTOS_CB_BankAccount', mergedValues.bankAccountId, businessStatusId); } } var validationAR = isBusinessStatusChange('Active', 'Released'); if(validationAR){ var collateralType = getById('FTOS_CB_CollateralType', mergedValues.collateralTypeId);

if (collateralType.name === 'Fixed deposit') { var businessStatusId = getBusinessStatus("FTOS_CB_ BankAccount", "Opened"); changeBusinessStatus('FTOS_CB_BankAccount', mergedValues.bankAccountId, businessStatusId); } }

If business status is changes from Owned to Released – the status for Bank account will be changed to Opened status (Only for fixed deposit collateral). If business status is changes from Active to Released – the status for Bank account will be changed to Opened status (Only for fixed deposit collateral).

FTOS_CB_CollateralRegisterOwner Entity

FTOS_CB_CollateralRegisterOwner is the entity where all collateral owners are held.

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Property name Description collateralRegisterId Collateral Register ID customerId Collateral customer Id

Form - FTOS_CB_CollateralRegisterOwner – Default form

This form is used for CRUD operations for collateral owners.

FTOS_CB_Contractcollateral Entity

Property name Description customerId Collateral customer Id contractId Contract Id collateralRegisterId Collateral Register Id coverValue Covered value in collateral currency coverPercent Collateral cover percent coverValueContractCurrency Covered value in contract currency

Journey - FTOS_CB_Colntractcollateral

This journey is used to add/delete a collateral to the contract. If a collateral has 2 or more owners, the owner who is other than the customer associated with the contract will become guarantor.

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SERVER SCRIPTS

l FTOS_CB_returnCollateralCoverValue

When selecting a collateral, the coverValue, coverPercent and coverValueContractCurrency are automatically calculated , at the endpoint call FTOS_CB_returnCollateralCoverValue.

var currentCollateral = GET_COLLATERAL_INFO;

if (currentCollateral[0].b_availableValue == 0){ throwException("You cannot add a collateral with available value = 0"); }

var availableValueCurrentCollateral = currentCollateral[0].b_ availableValue; var availableForContract = availableValueCurrentCollateral;

if (collateralCoverValue && collateralCoverValue > availableValueCurrentCollateral) { availableForContract = availableValueCurrentCollateral; }

if (collateralCoverValue && collateralCoverValue < availableValueCurrentCollateral) { availableForContract = collateralCoverValue; }

if (currentContract && currentContract.length > 0) { var contractCollateralPercent = currentContract[0].a_ collateralPercent; var contractCoverValue = currentContract[0].a_coverValue; //suma acoperita de pe contract

if (!contractCoverValue || contractCoverValue == null || contractCoverValue == "undefined") { contractCoverValue = 0; }

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var contractAmount = currentContract[0].a_amountDue; var calculatedContractCoverValue = contractAmount * contractCollateralPercent / 100;

var fromDate = systemDate.SystemInvariantDate(); var exchRate = parseFloat(exchangeRate(fromDate, currentCollateral[0].b_currencyId, currentContract[0].a_ currencyId).toFixed(6));

if (exchRate && exchRate > 1) { exchRate = parseFloat(exchRate).toFixed(2); }

var availableValueInContractCurrency = parseFloat (availableForContract * exchRate).toFixed(2);;

if (contractCoverValue < calculatedContractCoverValue) { if ((calculatedContractCoverValue - contractCoverValue) >= availableValueInContractCurrency) { var coverPercentCollateral = parseFloat (availableValueInContractCurrency / calculatedContractCoverValue * 100).toFixed(2);; result = { coverValue: availableForContract, coverPercent: parseFloat(coverPercentCollateral), rate: exchRate, coverValueInContractCurrency: availableValueInContractCurrency }

} else { var coverValueCollateral = calculatedContractCoverValue - contractCoverValue; var coverPercentCollateral = coverValueCollateral / calculatedContractCoverValue * 100; result = { coverValue: parseFloat (coverValueCollateral / exchRate).toFixed(2), coverPercent: parseFloat(coverPercentCollateral), rate: exchRate, coverValueInContractCurrency: coverValueCollateral }; } } else { result = { coverValue: 0, coverPercent: 0, rate: 0, coverValueInContractCurrency: 0 } } }

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l FTOS_CB_insertContractCollateral

After adding a collateral to the contract, Contract Cover Value is automatically calculated. Contract approval can only be done if Cover Value = Financed Amount * Product Collateral Cover Percent / 100. Product Collateral Cover Percent is set on the product.

l FTOS_CB_UpdateContractCollateral

If a collateral has 2 or more owners, the owner who is other than the customer associated with the contract, will become guarantor.

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Collateral Management

Collateral management is the method of granting, verifying and managing collateral transactions in order to reduce credit risk in unsecured financial transactions. Collateral management is an essential and integral part of any financial institution's risk and regulatory compliance framework. Collateral it is used to provide security against the possibility of payment default by the opposing party in a transaction. Types of collateral: There is a wide range of possible collaterals used to hedge credit exposure with various degrees of risk:

l Cash Collateral like Fixed Deposit, Stocks, etc.

l Real estate: Property, Land

l Other: metals, commodities, etc.

In FintechOS Banking System, Collateral Management configuration starts with guarantee types. These can be set by logging in FintechOS Studio and selecting ‘Option Sets’ from the ‘Admin Section’ in the main menu. You can search using the FTOS_BP_ GuaranteeTypes name. By default there are two types of guarantees defined that should cover most of the business requirements:

l Real Estate

l Cash Collateral.

Going further, these types of guarantees will be used in defining the types of collateral. In FintechOS System there is a large range of predefined collaterals, but new types of collaterals can be inserted in ‘FTOS_CB_CollateralType’ entity:

l Predefined collaterals for Cash Collateral guarantee: Fixed Deposit, Stock, Bonds.

l Predefined collaterals for Real Estate guarantee: Land and Property.

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When a collateral type is defined, the user can set an adjustment percent. This can also be viewed as the haircut applied for that collateral. Further, when a collateral is linked to a secured loan contract, it’s market value will be automatically adjusted by the system using the adjustment percent.

Registering a Collateral

In order to register a collateral, follow the path:

1. From the main menu, navigate to the Banking Contracts > Collateral Register.

2. The page Lista de Collateral Register opens. A collateral can be added by clicking on the Insert button from this section or one can be added directly from the legal entity by clicking on the Insert button from Collateral Register section:

The attributes of a Collateral are:

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Field Description

Name Name of the collateral.

Collateral Type Fixed Deposit / Property / Stock / Land / Bonds / Other.

It can be different from the Currency of the Contract on which Currency is used as guarantee.

The value of the Collateral, which is taken into consideration in Market Value calculation.

The percent that should be covered by the Collateral is set in Adjusted Value Banking Product, Collateral Cover Percent.

If the Collateral is used to cover other loans, here is Available Value automatically calculated the remaining value.

Next Evaluation

Date

Last Evaluation

Date Description Insert a suggestive description.

CONTRACT COLLATERAL The list is automatically generated. It shows the Contracts where the current Collateral is used as guarantee.

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COLLATERAL OWNERS To add other Collateral Owners is should be specified if other registered Customers that partially own the Collateral. The other owners are considered guarantors of the Contract, and they should consent on this. Collaterals can be also added from Customer form:

If a Real Estate collateral is registered, the user has the possibility to insert the last evaluation date and the next evaluation date. Only after a collateral is registered, it can be used for covering a secured loan contract. To add a collateral to a secured contract, the user has to go to the Collaterals tab. In this section, the user can insert one or more collaterals in order to have the contract covered.

IMPORTANT! Notice that the field ‘Product collateral coverage percent’ is read-only, and set with the value defined in Banking Product.

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After clicking on the Insert button, a window containing the list of collaterals specific to the selected customer will open. The fields Cover value percent and Cover value in contract currency will be automatically populated.

There is one more optional tab that can be defined called Contract Guarantors. This can be used if the user wants to add a collateral that is not owned by the customer. If a guarantor is added on the loan contract, the user can use the collaterals owned by the guarantors in order to cover the contract risk. A collateral registered can be attached to multiple contracts if the contracts total amount does not exceed the collateral available amount.

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If the collateral is in a different currency then the contract currency, the exchange rate should be automatically applied in order to have the available amount correctly calculated. Further, there is a job ‘Daily recalculation of Collaterals’ that runs daily in order to recalculate the available amount for each collateral.

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Deposits

A is a bank account maintained by a financial institution in which a customer can deposit and withdraw money. Deposit accounts can be current accounts/ transactional accounts, savings accounts, deposit collateral accounts or term deposits accounts.

Banking Product Configuration

As it was previously detailed in Banking Product documentation, the core banking system allows the user to configure a wide range of products, among which is the deposit account.

Main info

To setup a term deposit account banking product, the user will need the following configuration:

Field Details Product type Bank Account Class Corporate SubClass Bank Account Category Corporate SubCategory Term Deposit or Fix Deposit Collateral.

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Details

Most of the product features can be found in Details tab:

Bank Account type: the user can select one of the bank account types described in the following photograph. Each bank account type will have different configuration and behavior, but these won’t be impacted by the values selected in the bank account type list. This information will be useful in grouping the bank accounts and for General Ledger records. The products that have the 'Product Type' set to 'Fix Deposit Account' can be registered in Collateral Register in order to become a guarantee for a secured loan banking product.

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Auto RollOver : the user has the possibility to check/ uncheck this field on the banking product configuration. If it’s unchecked, the deposit will be automatically closed at maturity date. If this field is checked, the deposit account will be automatically renewed at maturity date in exactly the same conditions. Interest is capitalized: if this field is not checked on the banking product, the interest will be payed in the casa account specified on the contract. If the field is checked, then the interest will be added over the deposit amount, so that on the next payment date the customer will receive the interest applied on both interest and deposit amount. Allow Negociated IR : if the field is unchecked, the ‘Total Interest Rate’ from the contract will be automatically completed with the value configured on the banking product and it will be read-only, so that the user cannot change the value. If the field is checked, the ‘Total Interest rate’ from the banking contract will be automatically completed with the value configured on the banking product, but it will be editable, so that the user to be able to change this value and insert the negotiated one. Allow Top Ups: if this field is checked, the top up transaction will be automatically loaded in ‘Associated Transactions’ section, which means that the customer is allowed to make top ups after opening the account. If the field is unchecked, the transaction will not be available in ‘Associated Transactions’ section, so the customer is not able to top ups after the opening. If 'Allow Top Ups’ is checked and the customer tops up the account, at the next maturity date he will receive the interest for the initial amount up until the top up date, plus the interest for the full amount (initial amount + top up amount) proportional from top up to payment date. Allow withdraws: if this field is checked, the withdraw transaction will be automatically loaded in ‘Associated Transactions’ section, which means the customer is allowed to make withdraws after opening the account. If the field is not checked, the ‘Withdraw’ and ‘Transfer between my bank accounts’ transactions will not be available in ‘Associated Transactions’ section, so the customer will not be allowed to make withdraws or transfers after opening the account. In order to have access to the funds the customer will have to liquidate the deposit. In this case the interest will not be paid.

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Availability

In Availability tab the user can configure the currency, period type, minimum/ maximum period, minimum/ maximum amount, Self Bank Account for Transactions and Availability Rules. The currency will be automatically loaded on the contract and it cannot be changed. There are also some validation rules implemented on the deposit contract based on a deposit banking product:

l the period must be between the minimum and maximum values set on the banking product

l the amount must be between the minimum and maximum values set on the banking product.

In Interest&Commissions tab, the interest can be configured and it will be automatically loaded on the contract. In Associated Transactions tab, contains the transactions types that can be executed on a deposit contract:

l Top Up, Withdraw and Transfer between my bank accounts transactions- only if Allow Top Ups and Allow Withdraws fields from Details section are checked.

l Deposit Liquidation : represents the way to close the deposit account, so the entire amount will be transferred in the current account and the deposit account will be closed. If the liquidation occurs at the maturity date, the interest will also be paid. If the liquidation occurs in any other day except the maturity date, the customer will receive the sight interest (if a sight interest is configured).

l Early Termination Deposit and Payment Deposit: automatic transactions that are generated by the system. It is not mandatory to define them, but is considered best practice to do so, in order to have a better traceability of the events that can occur.

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Contract deposit configuration

On the Contract level, there are also some particularities that should be taken into account. When opening a deposit contract, the Customer CASA account from Overview tab is a mandatory field. The available values displayed in the lookup list represent all the customer’s accounts in the same currency. The selected current account will be debited with the deposit amount. If there are not enough funds in the Casa account, a specific message will be displayed when trying to approve the contract. The same current account will be used for interest payment if the deposit is without capitalization and will be automatically credited with the deposit amount if the deposit was open without auto rollover.

Field Details Activation There is a validation when approving the contract, so the activation can not date be in the past or future. Deposit There is a validation when approving the contract, so the amount must be amount between the min and max values set on the banking product.

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Field Details Select between:

l Monthly, Interest payment l Yearly, type l Daily,

l Quarterly. Product Only the interest set on the Banking Product can be selected. interest This field is displayed only if a sight interest is configured on the banking Interest for product and it is editable only if Allow negociated IR field is checked on the sight Banking Product. Total Interest If the interest rate is displayed, this field is editable only if Allow negociated Rate IR field is checked on the Banking Product. It represents the number of periods. It is auto-completed with the maximum Contract period set on the banking product, but it can be changed as long as it period remains between the min and max limits set on the banking product. Maturity It is automatically calculated, based on the contract period, contract period date type and activation date.

Payment due date represents the date on which the interest payment will be made. The field is auto-completed with the current date, but it can be changed. This field is not displayed for a contract deposit with interest payment type on maturity date and allows only values between 1 and 31. In the tab Fees&Commissions the commissions configured on the banking product will be displayed, but are not processed by the system at this moment, this functionality will be available at a later date.

Deposit interest calculation

The interest calculation depends on the both contract and banking product configuration Interest Payment Type is set to maturity.

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If the deposit is liquidated at maturity date, which means that the customer will receive the total interest accumulated for the period during which the deposit was made or the sight interest if other transactions like transfer or withdraw occurred in the period between activation and maturity date. If the deposit is liquidated before maturity date, the customer will receive only the sight interest and only if a sight interest is configured on the banking product. If there is no sight interest configured, the customer will receive only the initial amount. If a withdraw or transfer transaction occurs during deposit lifecycle (possible if the boolean Allow withdraws is checked on the banking product configuration), the sight interest will be paid (if there is a sight deposit configured on the banking product) calculated taking into account the amount and the period of time the funds were in the account. If one or more top up transactions occurs during the deposit lifecycle (possible is the boolean Allow top ups is checked on the banking product configuration), the total interest rate will be paid, calculated taking into account the amount and the period of time the fund were in the account. Interest Payment Type is set to any other value except maturity date. If the interest payment type is set to monthly, yearly, daily or quarterly then the interest will be calculated and paid taking into account this periodicity, on the date specified in the deposit contract. If the deposit reaches maturity, the total interest rate would have been paid according to the periodicity and the date specified on the contract, in the Casa account or in the deposit account, depends on how the deposit banking product is configured. If the deposit contract doesn’t reach the maturity because it is liquidated in advance, but one or more interest payments were already made, the system will recover the interest paid from the deposit amount. The interest recover will also be made if the deposit contract reaches maturity, but during the deposit lifecycle, at least one withdraw or transfer transaction was made (possible if ‘Allow withdraws’ is checked on the banking product configuration). If the DepositAggregateItemValues system parameter is set to No, the system will recover the entire interest paid until that moment and then the sight interest from the beginning until the transaction date will be paid (if a sight interest is configured on the banking product).

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If the DepositAggregateItemValues system parameter is set to Yes, the system will recover the difference between the paid interest and the sight interest that should be paid (if there is a sight interest configured on the banking product). The interest to recover will affect the deposit amount or the interest amount, depending on the deposit configuration: with interest capitalization or not, with interest payment on the maturity date or on a specific interval. If the deposit is without capitalization, which means the interest is paid in the CASA Account, in case a withdraw transaction occurs, the interest already paid will be recovered from the deposit amount.

For example, if a deposit is open for a period of 3 months with a monthly interest payment and the customer orders a withdraw after the first month, the interest already paid in the Casa Acc will be recovered from the deposit amount. If the deposit is with capitalization, the interest will be paid in the deposit account, so in case a withdraw will occur, the interest will be recovered from the deposit amount containing the initial value+the interest already paid, which means the initial amount will not be affected. All the transactions, bank account operations and payment detailed above are displayed in Payments tab.

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All the deposit versions are displayed in History tab representing the previous renewals of the deposit contract.

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Banking Contracts

Any agreement between a bank and customer regarding the usage of a banking product is documented legally with a contract.

1. Open the FintechOS Portal. From the main menu, click on Banking Contracts.

2. Double-click on Contracts child menu item.

3. Fill in the following fields:

Field Details Select from the option set:

Customer type l legal person

l natural person.

Customer Select from the list the name of the customer.

Product type Select from the list the product type.

Banking product Select from the list the name of the product.

IMPORTANT! When inserting a new contract, the user has to choose a product type, so that the list of banking products from the chosen type to be loaded. After saving the Contract, all sections of the Contract becomes visible and can be completed.

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4. Click the Save and reload button.

1 Overview

1.1. Common Data

Customer: selected previously Banking Product: selected previously Currency: it is taken from Product Main Bank Account: when approving the contract, this account it is created automatically for the bank defined as default (use Core Banking Operational → Bank menu). In order to generate the Account Number, there should be defined a rule for each client implementation (example: branch code + incremental sequence number) Activation Date: is completed by default with System Date (that can be changed from Control Panel → System Date)

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1.2. For a Product having Product Type = Bank Account, Banking Product = Current Account

GENERAL INFO Customer Casa Account: current account that is used in relation with currently selected Product (i.e. if the selected product is a Deposit Account, then it should be specified a Current Account where to put the money). Product Interest: can be selected an Interest defined per Product (see also Interests) Total Interest Rate: it is completed with the default value from selected “Product Interest”, but it can be filled-in or updated manually. The reason for updating the percent is that it can be negotiable. REPAYMENT OVERVIEW Contract Period: value is taken from Product (Maximum Period from Product Availability), but it can be changed Contract Period Type: value is taken from Product, and it cannot be changed Maturity Date: calculated as Activation Date + Contract Period FEES & COMMISIONS there are loaded those fees and commissions that have “Automatic Load on Contract” set to true (see Fees & Commissions).

1.3. For a Product having Product Type = Deposit, Banking Product = Fixed Deposit

GENERAL INFO Customer Casa Account: will display the current accounts that have the same currency as the contract. The selected Casa Account will be debited for constituting the deposit account. Also, the selected Casa account will be used for transferring the interest if the banking product is without capitalization. Deposit amount

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INTEREST RATE Interest payment type: Monthly / Maturity / Yearly / Daily / Quarterly Product Interest: the user has the possibility to choose one of the interests configured on the banking product Interest for Sight: the field will be displayed only if a sight interest is configured on the banking product. If a sight interest is configured, the percentage of this interest will be also displayed and it will be applied only if a withdrawal, transfer or liquidation before maturity operations are made before maturity Total Interest Rate: will be automatically completed with the value set on the banking product, but it can be also editable only if the banking product has ‘Allow negotiated IR’ field checked REPAYMENT OVERVIEW Contract Period: automatically completed with the maximum period set on the banking product, but it can be changed with any value between min period and max period from banking product Maturity Date: automatically calculated Payment due date: automatically completed with the current date, but it can be changed with any value between 1 and 31, representing the date on which the interest will be paid

1.4. For a Product having Product Type = Term Loan Account, Banking Product = Unsecured Loan or Secured Loan

GENERAL INFO Customer Casa Account: current account which will be used for collecting the installment and which will be credited when the disbursement will be made Financed Amount: actual amount of credit INTEREST RATE Product Interest: can be selected an Interest defined per Product (see also Interests). Penalty interests cannot be selected here.

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Total Interest Rate: it is calculated as the sum of Reference Rate and Margin Reference Rate Date Margin: it is taken from Interest Type definition Reference Rate: it is taken from Interest Type definition and depending on the Reference Rate Date REPAYMENT OVERVIEW Schedule Type: schedule types are described here: Defining Payment Schedule Types Periodicity Type: time interval for Payment Schedule. Possible values are set on the Banking Product . If the periodicity is set to Once, then the payment will happen one time, at loan maturity. Contract Period: the number of periods (Contract Period Type) for Contract Contract Period Type: automatically completed with the value set on the banking product MaturityDate: calculated based on Contract Period, Contract Period Type (Months etc.) and Repayment Due Day (which gives the exact day of month to put the Maturity Day) Repayment Due Day: the day of month for Repayment. If it is set to 31, then the system will take the last day of months. Installment Method (Actual Month / Next Months): based on this the first installment is set into the current month or in the next month Number of installments: it is calculated based on previously defined values Principal Grace Period (Months): It will be displayed only if the banking product allows a principal grace period. The value inserted in this field should be between min and maximum grace period set on the banking product. Interest Grace Period (Months): It will be displayed only if the banking product allows a principal grace period. The value inserted in this field should be between min and maximum grace period set on the banking product. Principal Value: it appears if Schedule Type is Loan Equal Installments. By default Principal Value is calculated, but can be changed manually. If it is changed, the last Installment will compensate the difference

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Installment Value: it appears if Schedule Type is Loan Equal Installments. It can be also changed. FEES & COMMISSIONS Are loaded these fees and commissions that have “Automatic Load on Contract” set to true (see Fees & Commissions).

1.5. For a Product having Product Type = Overdraft, Banking Product = Unsecured Overdraft or Secured Overdraft

GENERAL INFO Customer Casa Account: current account where to put the money at Disbursement and from where to take the money at payment Financed Amount: actual amount of credit INTEREST RATE Product Interest: can be selected an Interest defined per Product (see also Interests). Penalty interests cannot be selected here. Total Interest Rate: it is calculated as the sum of Reference Rate and Margin Reference Rate Date Margin: it is taken from Interest Type definition Reference Rate: it is taken from Interest Type definition and depending on the Reference Rate Date REPAYMENT OVERVIEW Schedule Type: schedule types are described here: Defining Payment Schedule Types Contract Period: the number of periods (Contract Period Type) for Contract Contract Period Type: automatically completed with the value set on the banking product MaturityDate: calculated based on Contract Period, Contract Period Type (Months etc.) and Repayment Due Day (which gives the exact day of month to put the Maturity Day)

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Repayment Due Day: set to 31, meaning the last day of the month Number of installments: it is calculated based on previously defined values Principal Grace Period (Months): It will be displayed only if the banking product allows a principal grace period. The value inserted in this field should be between min and maximum grace period set on the banking product. Interest Grace Period (Months): It will be displayed only if the banking product allows a principal grace period. The value inserted in this field should be between min and maximum grace period set on the banking product. Principal Value: equal to financed amount FEES & COMMISSIONS Are loaded these fees and commissions that have “Automatic Load on Contract” set to true (see Fees & Commissions).

2 Collaterals

This tab appears on a Contract only if the Product is secured, and it is used to set Collaterals as guarantees. Collaterals should be previously defined (see Collateral management ). Information specified for a Collateral.

1. Click on the Insert button from the grid Contract Collateral.

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2. Fill in the fields:

Field Details

Contract Current contract.

Customer Current customer.

Collateral Register A collateral registered to the current customer.

Cover Value Percent Percent set in Banking Product, Collateral Cover Percent.

Cover Value The value that will be taken from Collateral.

Cover Value in Value converted at the rate defined in the system. Contract Currency

CONTRACT If there are more owners of the Collateral, then these GUARANTORS owners will appear automatically there.

CONTRACT The list of Collaterals registered per Contract. COLLATERAL

3. Click the Save and close button.

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3 Payments

3.1. Common Data

1. Click the Insert button from the Transactions grid.

2. The page Adaugare Contract Transactions opens. Fill in the fields:

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TRANSACTIONS: transactions that can be added here should be previously defined (Transaction Types) and associated with the Product (Banking Product). A grid with older transactions is displayed.

1. Click the Save and reload button.

BANK ACCOUNT OPERATIONS: the list is automatically populated when new operations are recorded. PAYMENTS: the list is automatically populated when new payments are recorded.

3. After a transaction is registered, it will be displayed in Transactions grid section.

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3.2. For a Product having Product Type = Term Loan Account, Banking Product = Unsecured Loan or Secured Loan or for a Product having Product Type = Overdraft, Banking Product = Unsecured Overdraft or Secured Overdraft

CONTRACT REPAYMENT SCHEDULE: the repayment schedule will be displayed in this section after a disbursement is made CONTRACT REPAYMENT SCHEDULE VERSIONS: there are displayed the old versions of payment schedule REPAYMENT NOTIFICATIONS: there are displayed the notified payments (installments, fees & commissions, penalties). The payment notification is made through ‘Generate Notifications’ job, part of the ‘End of day’ job. PENALTIES: there are displayed the calculated penalties

4 Contracts & Documents

In this section can be saved documents related tot he contract.

5 History

A contract may have multiple History versions, which are displayed in this section.

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6 Accounting entries

Daily Accrual on Contract: It was created and can be used for testing purpose. The user can run accrual and provisions for a selected period. After running the report, the records containing daily accrual and daily provisions will be displayed in the grid.

Accounting Totals on Contract: It provides an overview of the total amounts specified in accounting records. The accounting entries are generated by the ‘GenerateAccEntryEOD' daily job . The job runs automatically at the end of day.

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Accounting Entries: It reflects the accounting for the transactions related to the loan contract. The accounting entries are generated by the ‘GenerateAccEntryEOD' daily job. The job runs automatically at the end of day.

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Loan Contract Lifecycle

FintechOS Banking System allows for creating new versions for an existing contract. A contract version can have three version statuses:

l Contract Version Draft

l Approved

l Contract Version Closed.

A contract can have only one Draft version, one Current version but may have multiple History versions. These can be seen in ‘History’ section from the contract:

A new version of a contract can be easily added by clicking on the ‘Insert’ button from the contract. The changes that can be made to a new version of an unsecured/ secured loan contract are:

l The Financed Amount can either be increased or decreased. The amount can be decreased with a number less than or equal to the Available amount. Financed amount can be increased up to the maximum value specified on the banking product.

l Customer Casa Account attached to the loan contract can be changed to any other active account belonging to the customer.

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l Product Interest can be changed to any other type set on the banking product.

l Schedule type can be changed with ant other type set on the banking product.

l Contract period cannot exceed the maximum set on the banking product.

l Repayment due date can be changed with any value between 1-31.

l Grace Period can be changed up to the maximum number of months set on the banking product.

l After any of the above changes, in order to approve the new version of contract, it will be necessary to recalculate the Contract Repayment Schedule.

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The changes that can be made to a new version of an overdraft contract are:

l The Financed Amount can either be increased or decreased. The amount can be decreased with a number less than or equal to the Available amount. Financed amount can be increased up to the maximum value specified on the banking product.

l Customer Casa Account attached to the loan contract can be changed to any other active account belonging to the customer.

l Product Interest can be changed to any other type set on the banking product.

l Schedule type can be changed with ant other type set on the banking product.

l Contract period cannot exceed the maximum set on the banking product.

l Interest Grace Period can be changed up to the maximum number of months set on the banking product.

After any of the above changes, in order to approve the new version of contract, it will be necessary to recalculate the Contract Repayment Schedule.

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Transaction Types

In order to define Banking Products, you should define Transaction Types that can be then associated with Products. For more information, see Banking Product Factory. The following Transaction Types are predefined:

l Accruals and Provisions: funds set aside to cover future expenses. A provision is aimed at covering a probable future expense, or reduction in the value of an asset. An accrual is a type of provision where revenue or expenses are recorded when a transaction occurs rather than when payment is received or made.

l Deposit Liquidation: represents the way of closing the deposit account, so the entire amount is transferred in the current account and the deposit account is closed. If the liquidation occurs at the maturity date, the interest will also be paid. If the liquidation occurs on any other day except the maturity date, the customer will receive the sight interest (if a sight interest is configured).

l Disbursement: the actual delivery of funds from a bank account or other funds. It is a payment made by a company in cash or cash equivalents during a set time period, such as a quarter or year.

l Early Repayment: is the early return of funds previously borrowed from a lender.

l Early Termination Deposit: applicable when a deposit is terminated before schedule.

l Loan Contract: binding contract between two or more parties to formalize a loan process.

l Overdraft Payment: an amount of money that a customer with a bank account is temporarily allowed to owe to the bank.

l Payment Deposit: an amount of money paid into an account as part of a payment schedule.

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l Repayment: the act of paying back money previously borrowed from a lender.

l Repayment Notification: a notification sent for when a repayment is received.

l Revert Disbursement: the act of reverting the payment of money.

l Top Up Account: to add more money to the account before the value drains down to zero.

l Withdraw: removing funds from a bank account, savings plan, pension, or trust.

To edit Transaction Types, navigate to Admin Configuration -> Transaction Type:

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Attributes:

l Transaction Operation Type: methods that should be called in case of Disbursement / Payment / RecoverDebt / RepaymentContract.

l Name

l Transaction Code

l Is Automatic Transaction: if set to true, it cannot be selected manually for a transaction.

l Is System Transaction: used when there's a need of a transaction for the sole purpose of generating accounting entries (accruals, provisions).

l Generates Accounting Entry: should be set to true for automatically generating accounting entries.

l SourceEntityId: source entity from where values are taken when generating accounting entries.

Transaction Type Values:

l Value Type Name

l Transaction Type

l Type.

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Transaction Item Accounting Configurations:

l Accounting System

l Accounting Scope

l Chart Account

l Operational Item

l Currency

l Take From Banking Product.

Transaction Accounting Models:

l Transaction Type

l Accounting System

l Line Condition

l Debit Account Rule

l Credit Account Rule

l Debit Customer Rule

l Credit Customer Rule

l Accounting Entry Value Rule

l currencyRule

l Item Rule

l DescriptionRule

l EntityId Rule

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l Transaction Id Rule

l Transaction Detail Rule

l Transaction Value Type.

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