T24 Induction Business - Customer
Welcome to the T24 Funds Transfer Course
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Here is the agenda of this course, we will start by stating the Learning Objectives
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These are the learning objectives of this course. We will learn what T24 Funds Transfer is used for how to use the Funds Transfer Application How to Capture Funds Transfer Transactions and Standing Order Transactions and finally discover enquiries
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The Funds Transfer Application is an Account-based application used to move funds between accounts. Movements can be between two customer accounts; two internal accounts; between a customer account and an internal account.
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We will start with a Product overview
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Funds Transfer is one of the account based applications in T24 that is used for moving funds both internally and externally. Internally, payments can be made to or from a Customer’s account or to or from an internal account. Some of the external types of payment include Cheques, Mail Payments, Banker’s Drafts, Clearing House Payments and international payments via Correspondents. Instructions can be entered manually or fed from other communications systems like Telex or Swift. The system is linked to all types of outputs, be it paper or wire, through the Delivery setup in T24. The application is designed to handle all types of currencies and to handle inward or outward payments. On a real time basis, the application updates the core limit setup whenever an account is debited or credited. All Contract applications in T24 generate a movement of funds, and do not require a Funds Transfer transaction to be processed separately.
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The Funds Transfer application is used to move funds between accounts within the T24 Bank and is also used to make and receive payments from other banks through Vostro and Nostro Accounts. The application is helpful to make and receive international payments as well. This module can be used to transfer between two accounts. The transfer can be between two customer accounts or two internal accounts 0r between a customer account and an internal account. This can also be used to move funds between a PL Head and an Account. However we cannot use this module for the transfer of funds between two PL Heads or for transfer to or from a Contract. The Core T24 Modules – LIMITS, ACCOUNT and DELIVERY are integrated with the Fund Transfer application. Account balances and cash flows are updated online
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We will now discover the static tables
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The CURRENCY table is used to indicate the currencies involved in the transaction and also to default the exchange rate, when applicable The FT.COMMISSION.TYPE table is used to indicate pre defined commission and charges to be collected for effecting a funds transfer. The commission could be collected from the Debit Account or from the Credit Account. The NOSTRO.ACCOUNT table is used to default the pre specified Nostro account to the Funds Transfer transaction that would require the use of a Nostro account. This table is maintained by currency by Banks for defaulting the suitable Nostro accounts for different applications. For the FUNDS.TRANSFER application, it is possible to specify different accounts for different types of transactions. For example, it is possible to set that for GBP transactions, if the transaction is of one type, then the Barclays Bank account should be defaulted and if the transaction is of another type, then the Grindlays Bank account should be defaulted.
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We will now go over the Account to Account Transfers
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Debit account identifies the account to be debited for the transaction. A Drop down of Customer and Internal account numbers will be available to the user. Debit Currency defines the currency of the account being debited. Debit Amount identifies the amount to be debited. Debit Value date identifies the date when the debit is to be processed. This date will affect interest calculations within the debit account. This date can be future dated.
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The Debit Narrative refers to the information that is to be printed on a debit advice. An example would be the instruction reference. Some of the fields in the Funds Transfer application are only used for certain types of transactions. The screens have been designed accordingly.
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The first workshop is based on an Account to Account Transfer
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Only 4 values are required, After input, you can validate the record. The other mandatory fields are filled in automatically.
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The treasury rate will be defaulted from the exchange rate of the currency. A customer specific spread can be input if needed. CUSTOMER.RATE refers to the final exchange rate applied to this transaction. This rate will be calculated by adding the customer spread to the Treasury Rate. If the Customer rate is entered, then the Customer spread will be calculated and defaulted with the difference between Treasury rate and the Customer Rate. When the treasury rate and customer spread details are null, then the customer rate can be input by the user.
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In this workshop, we are transferring funds between accounts in different currencies. We apply a spread to the treasury rate to arrive at a final rate for the customer.
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From the menu ‘Transfer between accounts’, we capture the transaction.
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You can then select the list of Entries to authorise
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We will now explain what a draft issue is
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A draft is a cheque which is drawn on the bank. The customer would purchase a draft from the bank. Some suppliers prefer cheques that are drawn on a bank because they are perceived to be more secure than a customer’s personal cheque. Banks are deemed to be more credit worthy than individual customers. The chances that the draft will be unpaid due to insufficient funds are low. The customer can fund the draft by way of a debit to one of his accounts held with the bank. Alternatively, he could fund the draft by first depositing cash with the bank. The account where the cash is deposited would then be debited. The credit account, in this case, would be the Banks Cheque Account which is an internal account
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These are some of the fields used for a Draft Issuance
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In this workshop, we will issue a draft in Local Currency
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After selecting the menu ‘Draft issue in Local Currency’, fill in the required fields and validate the draft.
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Here, you can view the Debit Advice.
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When a bank issues a foreign currency demand draft, an MT 110 can also be generated. The MT110 is an advice of a cheque. The input is similar to that of a local currency demand draft, but requires additional details for the message.
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This message has the details of the cheque. It is used by the correspondent bank, where the T24 bank maintains its Nostro account, to verify that the cheque is genuine before paying the proceeds to the payee. The message also contains instructions for the receiving bank to act on. Bank to Bank information will be pasted in Tag 72 of SWIFT message.
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In this workshop, we will issue a Foreign Currency Draft with an MT110 message
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After you fill in the fields for the draft, commit it
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You can then see the cheque advice generated
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Our next topic is Outward Remittances
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A Fund Transfer is integrated with SWIFT messages for outward remittances. It may be MT 103; MT 110; or MT 200, This will be as per the SWIFT specifications from the respective transaction types. T24 generates SWIFT messages upon the validation of transactions and can be viewed even before committing or authorizing the transaction.
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The Funds Transfer module can facilitate the processing of funds transfers through Nostro accounts. This transfer can be between 2 Nostro accounts of the Bank or between a beneficiary and a Bank’s Nostro account.
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Charges on International remittances can be applied to the bank’s customer, the beneficiary or can be shared between the banks involved.
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We will now perform a workshop to create a Single Customer Credit Transfer with an MT103 message
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Here is the input screen to complete
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And here the message generated
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Banks may transfer funds between their different Nostro accounts. This may be in the different currencies and with different banks The System will generate an MT 200 for the transfer of funds for the banks own accounts.
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Here is a workshop about an MT200 transfer between Nostro accounts.
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Here is the input screen. Once complete, validate the input
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Here is the MT200 message
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Inward remittances can be handled in the FT module. The System is integrated with SWIFT messages. Hence, whenever a swift message is received for inward remittances, the FT Module will automatically create a transaction to capture the details. Details would include information like the currency, the amount, the credit account, the debit account and the value dates. A transaction is captured by the system and kept on hold for user intervention and authorisation. It can also be set up for ’Straight Through Processing’ for the automatic execution of the transaction. It is also possible to manually input the transaction for inward remittances.
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We will now discover the Funds Transfer enquiries we have at our disposal
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These are the 2 types of enquiries Local Draft Enquiries displays information on Local Drafts. We have enquiries on Issued Drafts, Cleared Drafts, Stopped Drafts and Cancelled Drafts Remittances Enquiries displays information on Outward and Inward Remittances, Foreign Drafts and Nostro Transfers
Note to the speaker: The path is : User Menu > Retail Operations > LCY Draft Issue / Account Transfer > Enquiries > Local Draft Enquiries. A Screen shot on the enquiry is pasted in slide 44
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Lets look at Local Draft Enquiries
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Lets look now at Remittances Enquiries
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We will now review the Standing Orders module
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Encompassed within the FUNDS.TRANSFER module is a fully operational submodule for effecting payments using Standing Orders. Single transfers involve a single debit and a single credit. An account can have multiple standing orders of different types. It includes the maintenance of a minimum or maximum balance whereby transfers occur into or out of the account when the balance goes beyond the specified boundary. Standing orders could be defined with fixed or periodic payments which can be effected from accounts. For example, a monthly payment of a fixed amount of rent can be set up. Payments for variable amounts such as telephone bills, can be set up as well. The module can be used to pay out interest amounts. This interest pay out can be to an internal or to an external account. Diary, which is a type of standing order, could be used for reminders. Diary caters to Operating Lease contracts and to the accrual of Standing Order amounts. Bulk transfers involving a single credit with multiple debits or a single debit with multiple credits can also be handled in standing orders. In addition to the STANDING.ORDER module, which is used for single standing orders, there are other applications which are used to pay many amounts with one compensating entry. These other modules are ‘Bulk Standing Orders’ and
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‘Funds Transfer BULK CREDIT’.
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The Standing Orders module is integrated into Funds Transfer module and every Standing Order will generate a Funds Transfer transaction within the Funds Transfer application.
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These are some of the fields available for input
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Balance Management allows for the maintenance of an account at a certain minimum or maximum balance. The shortfall would come from another account and any excess would be transferred to another account.
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These workshops are meant to capture Standing Orders. The first workshop is about moving in funds from another account for maintaining a minimum balance and the second workshop is for moving funds out to another account when a specified maximum balance is surpassed.
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This workshop solution is for moving in funds from another account when the balance in the account goes below 1000 USD
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This workshop solution is for moving funds out to another account when the balance in the account goes above USD 500
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It is in this screen we can set-up the maximum balance
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Standing Orders can be set to transfer a specified amount at a specified frequency form one account to another. Note that a Standing Order will generate a Funds Transfer transaction. This transaction will be executed subject to availability of funds in the Debit account and that no posting restrictions exist that could prevent such a transfer. In case of any problems encountered, the Funds Transfer will be kept on hold for manual intervention.
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We will now perform a transfer of a fixed amount.
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Here is the screen to be used for this workshop. It displays the fields to be completed before validation.
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Standing Orders is also linked to the Direct Debit module. This is used when other parties have been pre-authorized to take payments from a customer’s account.
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When a Standing Order is captured, it simply records the details of the Direct Debit mandate. While the standing order is in this passive state, no accounting entries are processed. Once the standing order is put into action, accounting entries get processed. If direct debits are received from another bank, then the accounting entries are either passed manually or go through a suitable interface. The direct debit mandate can be used for verification with the transaction.
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Using the Standing Orders module, the Bank can maintain a Diary of events to be performed in an account. An example would be the scheduling a meeting with a customer. As it is only recording a Diary of events and not processing any financial transactions, entries are not generated.
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We will now explain how bulk standing orders are managed
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BULK STO helps in moving funds from one account to multiple accounts. An example would be a company’s payroll when one debit is applied to the Corporate customer account and a credit is made to the account of each employee. The module can also process multiple debits to a single credit.
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BULK.STO is the application that allows standing orders with one debit to multiple credits It is similar to the regular payment type of a standing order. The bulking is processed during COB The module SINGLE.BULK.STO is used for online processing
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In this workshop, we will setup a bulk standing order
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This is how we proceed
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We can use Bulk Debits when we need to collect funds from several accounts.
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Bulk credits are also possible as a single credit for many contra debits. A Funds Transfer can be generated to collect funds from many accounts and credit one single account. For example, insurance payments can be collected from many customer accounts and credited to the account of the insurance company.
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Finally, we will look at the available enquiries for standing orders.
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The available Standing Orders Enquiries include enquiries: •
Unexecuted
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Executed Today
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By Account
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By Type
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Reversed
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Diary Actions
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Direct Debits
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Lets look at STO Enquiries Here we see Unexecuted STOs – FT on Hold
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1) False 2) True 3) True 4) True 5) True 6) False
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In this course, we have learnt about the features of the Funds Transfer application, its types, What Standing Orders are used for, The different types of Standing Orders and the enquiries available
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