7. Funds Transfer

Funds Transfer • TEMENOS EDUCATION CENTRE

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Copyright © 2005 TEMENOS HOLDINGS NV

FUNDS.TRANSFER (FT) is the part of Temenos T24 account based applications used to transfer funds from one account to another. These payments could be effected either internally from one ACCOUNT to another, or externally to another bank.

T24 Introduction Course (T2TIN) - FT

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Funds Transfer – Product overview

Customer Accounts

Account to Account transfer

Funds Transfer

Limits

Drafts, Bankers cheques

Internal Accounts

International remittances Delivery

Accounting

SWIFT messages Customer Advices

Outward FT Inward FT


Funds Transfer is one of the key applications within Temenos T24 for moving funds around the system internally or externally. Internally payments can be made to or from a Customer’s account or an internal account. Some of the external types of payment include Cheques, Mail Payment, Banker’s Draft, Clearing House Payments, international payments via Correspondent, etc. Note : Contract applications such as FOREX, Money Market, Mortgages also generate the movement of funds, and do not require a Funds Transfer transaction to be done separately.


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Introduction

• FT is used for – effecting payments internally between Accounts and PL items – moving funds externally for payments to and from other banks

• Module integrated with – Accounting – Limit – Delivery

• Real time update of Balances and Cash Flow


FT application integrates with several Temenos T24 core functionality such as, Accounting, Limit and Delivery, such that limits are checked online for each transaction and the accounting entries are passed on authorisation of transactions. FT also passes all the relevant details to the delivery module for processing. The Delivery system handles these payment types and process the messages as per its build, i.e. is the message to be sent by PRINT or SWIFT etc. In each case, a separate interface needs to be established and implemented to allow the data to flow through the correct system. The main process occurs in “Real Time”, throughout the day, with both Inward and Outward Payments being generated. Transfers may include conversion of currency between the debit and credit accounts which results in updation of account balances, limits and positions in Real Time. Standing Order payments are processed in batch job through overnight processing.


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Funds Transfer menu

• When user logs into T24, a User Menu is displayed • By clicking on Funds Transfer sub menu, we can access sub menus for – – – – –

Issuing Drafts Making Outward remittances Making Inward remittances Transfer between Accounts Authorising, Deleting and Reversing Funds Transfer transactions – Viewing Funds Transfer Advices and Messages – Funds Transfer related enquires

• Menus arranged to reflect business flow in Funds Transfer



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Static tables used in FUNDS TRANSFER

FT.COMMISSION.TYPE

CURRENCY

FUNDS TRANSFER

NOSTRO.ACCOUNT


CURRENCY is used to name the debit and credit currencies and also to default exchange rate if both are not local currency. FT.COMMISSION.TYPE is used to indicate pre defined commission to be collected for effecting funds transfer. The commission could be collected from the applicant or beneficiary NOSTRO.ACCOUNT is used to default pre specified Nostro account to FT transactions


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Input details for Transfer between Accounts

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This menu is used for transfers between Customer accounts, Internal accounts and PL categories in T24 Model Bank – Transfer could be between two Customer Accounts or two internal accounts or between a Customer Account and an Internal Account or between a Customer / Internal Account and a PL Category

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All mandatory fields required to be filled for transfer are grouped in a section called Transfer between Accounts – This version is designed to need only four Mandatory inputs DEBIT.ACCOUNT, CREDIT.ACCOUNT, DEBIT.AMOUNT and DEBIT.CURRENCY or CREDIT.AMOUNT and CREDIT.CURRENCY – Possible to do funds transfer between accounts if these fields are filled

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Fields can be filled up by – Suitable manual input or chosen from drop down available – Picking from drop down offered through Static tables



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• Id is in FTYYDDDNNNNN form • DEBIT.ACCT.NO (Debit Account in Model Bank) – Identifies the account to be debited for the transaction. – Drop down of all Customer and Internal account numbers available – Hot field. Auto launch context enquiry activated to show account balance as soon as Account number is indicated

• DEBIT.CURRENCY – Defines Currency of the account being debited

• DEBIT.AMOUNT – Amount to be debited

• DEBIT.VALUE.DATE – Identifies the date when the debit is to be given value for Interest purposes in debit account


Explanation of Id Number format: FTYYDDDNNNNN where: Application indicator - FT for the Funds Transfer Application YY Last two digits of year when transaction is processed DDD Julian day number within year when the F.T. is processed NNNNN Sequence number To avoid the necessity to input the complete Reference Number, the User has the facility to input only the sequence number of the transaction to access any transaction which has been input that day. The Application will automatically generate the seven first digits and append them to the front of the sequence number in order to retrieve the requested transaction. Access to any Funds Transfer transaction from a previous day requires the input of the day number and sequence number, the system will automatically generate the first 4 characters, assuming that the current year is applicable.


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• DEBIT.THEIR.REF (Debit Narrative in Model Bank) – If information is to be printed on debit advice like instruction reference

• ORDERING.CUST (Ordered by) – Identifies the Customer who is ordering the transaction – Mandatory if transfer is not from Customer account

• CREDIT.ACCT.NO (Credit Account) – Identifies the account to be credited for the transaction. – Drop down of all Customer and Internal account numbers available. Hot field and auto launch of enquiry to show balance

• CREDIT.CURRENCY and CREDIT.AMOUNT – Credit account currency and amount – Can be defined only if DEBIT.CURRENCY and DEBIT.AMOUNT not input earlier


CREDIT.CURRENCY and CREDIT.AMOUNT cannot be input if DEBIT.CURRENCY and DEBIT.AMOUNT are already defined


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• CREDIT.VALUE.DATE – Identifies the date when the credit is to be given value for Interest purposes in credit account

• CREDIT.THEIR.REF (Credit Narrative in Model Bank) – Information / data to be printed on the Credit Advice

• If Debit and Credit Currencies are different for a transaction, then system uses exchange rate based on CURRENCY table • CUSTOMER.SPREAD – Customer exchange spread applicable for this transaction can be indicated

• CUSTOMER.RATE – Identifies the final rate for the transaction – Obtained by adding Customer Spread to the treasury rate to generate a final rate for the transaction


CUSTOMER.RATE: Identifies the final exchange rate applied to this transaction. This Rate will be derived from the addition of the Treasury Rate and the Customer Spread. In case the Treasury Rate and Customer spread is null then allows to input exchange rate in Customer Rate. If Customer rate is entered, then Customer spread will be calculated and defaulted with the difference between Treasury rate and Customer Rate


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Workshop - 1

• Using Account Transfer sub menu - Transfer between Accounts sub menu, effect a funds transfer for USD 1000 – Debit Account Number 14613 DELL COMPUTER USD account – Credit Account Number 22039 BOEING USD account – Accept overrides, if any, and commit the record – Get the record authorised – View your FT record. Through context sensitive enquiries – Contract enquiries, view List of entries (authorised). Drill down to look at the individual accounting entries



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Workshop – 1 Solution



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Workshop - 2

• Using Account Transfer sub menu - Transfer between Accounts sub menu, effect a funds transfer for GBP 1000 – Debit Account Number 14613 DELL COMPUTER USD account – Credit Account Number 14796 BOEING GBP account – Customer spread 0.025 – Accept overrides, if any, and commit the record – View your FT record. Through context sensitive enquiries – Contract enquiries, view List of entries (unauthorised). – Get the record authorised. Through context sensitive enquiries – Delivery information – Outward delivery messages, view the debit and credit advices



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Input details for Draft Issue in Local Currency

• Drafts in USD, local currency in Model Bank, can be issued by filling five mandatory fields in Issue Draft (Local Currency) section • BEN.CUSTOMER (Beneficiary in Model Bank) – Is a free text multi value field to indicate in whose favour the draft is to be drawn – Can also indicate an existing Customer by Mnemonic or Id

• DEBIT.ACCOUNT to denote the Customer’s account to be debited for draft issue. Draft issue charges also collected from this account • CREDIT.AMOUNT (Draft Amount), DFT.CCY.UNIT (Draft CCY Unit), CREDIT.THEIR.REF (Draft Number) to indicate the amount of draft, decimal unit name and draft number respectively



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Input details for Draft Issue in Local Currency

• System defaulted fields – Internal Account Number to be credited for issuing drafts in CREDIT.ACCT.NO field (Drawn on Acct field) • USD150050001 Managers’ Checks

– DEBIT PLUS CHARGES option in COMMISSION.CODE field • This indicates that the debit account should be debited with draft amount and draft issue charges amount. • If charges are to be waived, User can change this to WAIVE

– In COMMISSION.TYPE field it defaults DDCOMM, a FT.COMMISSION.TYPE record already set up • System calculates commission automatically and defaults value in COMMISSION.AMOUNT field (Commission Amt) • Instead, User can input Currency and Amount of charges – in local or debit or credit currency. After committing input, System indicates the amount in debit currency in COMMISSION.AMOUNT field


COMMISSION.CODE: D = Debit plus Commission The Debit plus Commission value will indicate that, for outgoing payments, the complete transfer amount will be remitted to the receiver bank and the commissions amount will be collected from our ordering Customer. C = Credit less Commission The Credit less Commission value will indicate that, for outgoing payments, the amount of commission will be deducted from the Transfer Amount which is remitted to the receiver bank. W = Waive Commission The Waive Commission value will indicate that no commission is to be applied on this transaction. Any input in the fields Commission Type and Commission Amount will consequently be refused.


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Workshop - 3

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Using Issue Draft sub menu - Issue Draft in Local Currency sub menu, issue a Draft in Local Currency for USD 100,000.25 Cents – Use Savings account of Individual Customer in USD as debit account – Indicate Beneficiary’s name as John Peter and Payment details as Invoice 1234 and Draft Number as A123456 – Accept overrides and commit the record. Do not authorise

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Using Account menu - Enquiry sub menu - Today’s Account Balance sub menu look at the Account Balance Summary –Today

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Now get the record authorised and view the above enquiry once again to note the changes to Ledger and Cleared balances

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Using Enquiry menu -Today’s FT transactions sub menu - Local currency drafts issued sub menu, look at details of local currency drafts issued



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Input details for Draft Issue in Foreign Currency

• Issuing Draft in Foreign Currency is similar to issuing Draft in Local Currency, but with an additional mandatory input • CREDIT.CURRENCY field (Draft Currency in Model Bank) is now an additional mandatory field – User input required to indicate the currency of draft

• CREDIT.ACCT.NO (Drawn on Account field) now defaults the Nostro account meant for FT for the draft currency – User can change this to any other Nostro account


CREDIT.ACCT.NO (Drawn on Account field in Model Bank) has been provided with drop down enquiry of Nostro banks with whom necessary arrangements have been made with for issuing foreign currency draft


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Workshop – 4

• Using Issue Draft sub menu - Issue Draft in Foreign Currency sub menu, issue a Draft for GBP 1000 by debiting Savings Account of your Individual Customer in USD set up earlier – Indicate Beneficiary’s name as David Peter and Payment details as Invoice 654 and Draft Number as B123456 – Input Customer rate of 1.65 for this draft

• Get the record authorised. • View your FT record. Through context sensitive enquiries – Contract enquiries - view List of entries (authorised). Drill down to look at the individual accounting entries • Using FT Advices / Messages Sub menu, look at the delivery message produced as Debit advice



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Issuing Drafts - MT 110 Advice of cheque Draft / Banker’s Cheque

Michael Dell

Instruction

Draft / Banker’s Cheque

T24 Bank MT110

Draft / Banker’s Cheque

Payment

Mr Frank Bishop

Our GBP Nostro account with Barclays London Copyright © 2005 TEMENOS HOLDINGS NV


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Input details for Draft issue – with MT110

• This sub menu enables a Bank to issue a MT 110 SWIFT Advice when a draft is issued. It is similar to issuing Draft in Foreign Currency • Additional fields are for generating MT 110 SWIFT Advice • SEND.TO.PARTY (MT110 Sent to in Model Bank) is defaulted with a value of CRCUST to indicate that the message is for the Bank on whom the draft is drawn • BK.TO.BK.OUT (Bank to Bank Info) is an optional field. Input in the field is used in Tag 72 of MT 110. – Input should begin with a /, and a valid code word pre-defined in SWIFT.CODE.WORDS and end with /. – Multivalue field and hence subsequent lines to begin with // • /REC/PLEASE PAY THE DRAFT AS INSTRUCTED • //IF OTHERWISE IN ORDER



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Workshop – 5

• Using Issue Draft sub menu - Draft Issue –with MT110 sub menu, issue a Draft with MT110 for GBP 1000 by debiting Savings Account of your Individual Customer in USD – Indicate Beneficiary’s name as John Mathew – Draft Number as C123456 – Bank to Bank information - /REC/PLEASE PAY THE DRAFT AS INSTRUCTED, IF OTHERWISE IN ORDER

• Get the record authorised • Using FT Advices / Messages Sub menu, look at the MT 110 message • Using Enquiries menu - Today’s FT Transactions sub menu Foreign Currency Drafts Issued sub menu, look at foreign currency drafts issued today



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Outward remittances - MT 103 Single customer credit transfer Debit advice

Michael Dell

Instruction

T24 Bank MT103

Payment

Mr Frank Bishop

Our GBP Nostro account with Barclays London Copyright © 2005 TEMENOS HOLDINGS NV


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Input details for Outward Remittance (MT103)

• Outward Remittance (MT103– Single Customer Credit Transfer) sub menu enables to effect an outward remittance by issuing a MT 103 SWIFT advice • Inputting details is split into 2 sections (tabs / versions) to facilitate Navigation – All mandatory fields for effecting a transfer are in first section called Outward Remittance (MT103) while those for sending MT 103 are in second section called MT 103 details

• Filling Outward Remittance (MT103) section is similar to issuing Foreign currency draft, but with additional fields



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Input details for Outward Remittance (MT103)

• BEN.OUR.CHARGES (Charges for in Model Bank) gets a default value of SHA, while other options are BEN and OUR – Value signifies who will bear the charges – Beneficiary or Our ordering customer or both in their respective sides – COMMISSION.FOR field is filled by System as SENDER or RECEIVER

• COMMISSION.CODE, gets a default value of DEBIT PLUS CHARGES – Option available to waive or credit less charges also

• COMMISSION.TYPE field gets a default value of OUTREMITCHG now, a FT.COMMISSION.TYPE record already set up – Instead of allowing the System to calculate the amount, User can input Currency and Amount of charges


BEN.OUR.CHARGES: The value entered here is used to signify who will be responsible for charges. There are three permissible values - BEN, OUR and SHA. BEN: All transaction charges are to be borne by the beneficiary customer. OUR: All transaction charges are to be borne by the ordering customer. SHA: Transaction charges on the Sender's side are to be borne by the ordering customer and transaction charges on the Receiver's side are to be borne by the beneficiary customer


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Input details for Outward Remittance (MT103) •

The second section, MT103 details, is meant to record details of SWIFT Message MT103 – Details filled up in previous section, and relevant to SWIFT MT 103 message are automatically defaulted into this section – Additionally, intermediary bank, if any, can be indicated in this section

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SEND.TO.PARTY (SWIFT MT103 Sent to field in Model Bank) is defaulted with a value of CRCUST to indicate that the message is for remitting Bank BK.TO.BK.OUT (Bank to Bank Info) field is used in Tag 72 of MT 103. – Input should begin with a /, and a valid code word pre-defined in SWIFT.CODE.WORDS and end with /. – Multivalue field and hence subsequent lines to begin with // • /REC/PLEASE REMIT THE INDICATED AMOUNT VALUE TODAY



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Workshop – 6

• Using Outward Remittances sub menu - Outward Remittance (MT103) sub menu, effect Outward remittance of GBP 10,000 as requested by the Individual Customer opened earlier – Choose • Debit account as Savings account of Individual customer in GBP • Credit Account as 23701 BARCLAYS BANK

– Indicate • Beneficiary as NESTLE U.K • Bank to bank information as /REC/PLEASE CREDIT AMOUNT VALUE DATE TODAY

• Accept the overrides and get the record authorised • Using FT Advices / Messages sub menu, look at the MT 103



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Inward remittance

• Inward remittance instructions received can also be handled through FT, manually or through suitable interface. • If interfaced, then, system can create a record in INAU status • This is opposite process of Outward remittance • These transfers may be received in sending bank’s Vostro account with us or our Nostro account with them • Hence, two sub menus are available to handle inward remittances – Inward Remittance thru’ Vostro Accounts – Inward Remittance thru’ Nostro Accounts



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Input details for Inward Remittance thru Vostro Accounts

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There are four mandatory fields – DEBIT.ACCOUNT • Drop down of Vostro accounts are available for input

– DEBIT.CURRENCY – DEBIT.AMOUNT – CREDIT. ACCOUNT • Drop down of all accounts are available

• Other fields are optional or get default value – Commission code of CREDIT LESS CHARGES defaulted • Can be waived or made as DEBIT PLUS CHARGES if so instructed

– Commission type INREMITCHG is defaulted • Can be multivalued to include more pre defined charges from FT.COMMISSION.TYPE or COMMISSION.AMOUNT field can be manually fed with Currency and commission amount



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Workshop – 7

• Using Inward Remittances (thru Vostro Accounts) sub menu – Credit USD 10,000 to the Savings account of Individual customer in USD – Choose • Vostro Account 23779 BANK OF NEWYORK, USD VOSTRO • Currency as USD

– Commit the data and get the record authorised – Using context sensitive enquiry, look at the accounting entries passed



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Input details for Inward remittance thru Nostro Accounts

• Similar to Inward remittances through VOSTRO Account • DEBIT.ACCOUNT field now has a drop down of Nostro accounts • ORDERED.BY field could have a free text or can have any valid Customer Id – As it is a multi value field, it can be used to enter details (name and address) of the Customer who actually originated the transaction – Input made in this field will be printed on advices



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Workshop – 8

• Using Inward Remittances (thru Nostro Accounts) sub menu – Credit GBP 10,000 to the Savings Account of Individual Customer in USD – Choose Nostro Account 23701 BARCLAYS BANK, UK GBP NOSTRO A/C – Indicate ordered by customer as Glaxo London and Customer spread of 0.015

• Commit the data and get the record authorised – Using context sensitive enquiry, look at the accounting entries passed – Using Enquiry menu - Today’s FT transactions sub menu Inward remittances sub menu, look at the Inward remittances executed today



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Workshop – 9

• Use Limits menu – Enquiries sub menu – Liab sub menu and view the liabilities vis-à-vis limits granted to your Individual customer. – Drill down to view details of overdrawal shown in each savings account – Observe that Limits were not attached to these savings accounts and hence, when overrides were approved, System has allowed them and created default limits

• Use Limits menu – Enquiries sub menu – Customer Position sub menu and view the Customer position of your Individual customer



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FT links Currency

Customer

Charges and Commission

Limits Delivery Accounting Customer Accounts

FUNDS TRANSFER Account - Account Drafts

Internal Accounts Remittances Profit & Loss


In Funds transfer, account to account transfer or issue of drafts or making remittances are carried out. Next to Customer, Account is central to all other applications in T24. We have used different types of Customer accounts including Nostro and Vostro. FT can make use of Internal accounts and PL categories also We have used Internal accounts for Issuing drafts. As soon as a transaction is committed in FT, System checks for account balances, limit if any sanctioned and availability thereof, and if need be, shows overrides about non availability of adequate balances. If override is duly approved, then over drawal in account is allowed. However, it maintains details of amount overdrawn.


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Summary

• You have gained understanding of some important features of Funds Transfer application. • You have seen how to this application is integrated with – Core - Customer, Account, Limits, Delivery, Accounting and – Other static tables like CURRENCY

• You have also seen standard enquiries of FT



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7. Funds Transfer

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