Loans Management in

SAP Banking Services

5.0

RKT Account Creation

02/2007
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Content

Introduction
2 Origination Interfaces

5
6
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Product Configurator

Account Creation

Conditions & Cash Flow

Insurance Management

Overview / Content

After completing this presentation, you will have an

overview about the content / elements of a loan account
in Loans Management in SAP Banking Services 5.0.

Origination

Product

Account

Conditions

Insurance

Interfaces

Configurator

Creation

& Cash Flow

Management

RKT Learning Map

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Terminology
Overview
Creating a Contract
Account Contract Features

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Terminology

Loan Contract
A formal contractual agreement established between a lending
institution and a borrower

Installment Loan
A solution that allows borrowers to repay a loan over a specific period of time, on
a payment schedule
For loans functionality, the SAP Banking Services 5.0 contains two logical sets of
accounts for a loan contract:

Loan Account Contains Master Data and Cash Flow details

Clearing Account Contains Payment Distribution details

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Terminology
Overview
Creating a Contract
Account Contract Features

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Contract: Overview
Contract Components:

Org. Unit

Product

Bank posting area

Bank country & key
Public holiday
calendar

Default values
Fixed values
Feature characteristics
Field selection

Contract

Business Partner
Account holder
Card holder
Correspondence Recipient

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Contract Framework
Central Contract Element

Other Contract Elements

- Product category

Business partner in the contract

- Product - Product version

- BP role

- Contract status

- BP number
General ledger

- Live from

- General ledger group

- Contract currency

- Netting group

- Public holiday calendars (three)

- Contract description

Posting control
- Posting control group
- Flag: Suppress check
- Flag: Processing account
Limits

Specialization "Account
- Bank country
- Bank key
- Account number
- Flag: No check digit calculation

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-Limit category
- Limit currency
Account settlement
Payment details
General attributes,

Outside World

- Flow data transferred from

Account Contract Overview

Business Partner
Shows the kind of business partner by category, role, data like name, birth date etc.

Correspondence Recipient
It determines the recipient by way of the business partners in the loan contract.
Condition Fixing
Describes a timeline for which conditions are not changed and what is the determination
date of the used conditions (This features belongs only to conditions that own the proper
condition determination settings).
Agreement
Describes the normally limited timeline of an agreement with the bank customer. In the
product settings is defined if and how the timeline can be changed. It contains other
information like the date of instruction of the customer or the end of the notice lock
period. The Agreement owns a status as well.

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Account Contract Overview

Payment Agreement
Describes the agreement of amounts to be paid by a customer.

Payment Details
Contains process related payment information e.g. direct debit.

Financial Conditions
A rule specifying which financial (exact debit interest rate, for example) or date-related
(quarterly settlement, for example) consequences result for banking transactions when
certain prerequisites are met (such as credit limit exceeded for X days, account of
product category Y). Conditions are normally part of a contractual agreement (condition
agreement) between the customer and the bank and are used by the bank as basis for
managing accounts and cards, for example.

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Account Contract Overview

Cash Flow
The movements of money into and out of a business during an accounting period. This
includes all receipts and payments of cash and is an indication of a company's financial
strength.
Billing
Billing (BL) is responsible for handle expected payment items for a corresponding
contract (e.g. loan account) and send this items on an also specified date to a due item
Management.
Insurance
The Insurance Handler allows to store information about insurances related to loan accounts.
The system collects the insurance premiums from the customer and disburses them to the
insurance companys. The Insurance Handler also allows to reconcile the insurance master data
with the Insurance Companies.

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Account Contract Overview

Settlement
The entire functionality with which the interest and charges are calculated in the context of the
periodic tasks for all due contracts in a certain settlement period. The resulting obligations
between the customer and the bank are posted.
Settlements can be carried out for the following contract specializations:
- Accounts
- Cards
- Account pools
- Card pools
- An appropriate settlement frequency can be set for all contracts of a product, or
individually for one contract.

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Terminology
Overview
Creating a Contract
Account Contract Features

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Account Contract: Create Contract

How to create a contract:
Go to Account Management
Account
Account Master Data
Create Account

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Account Contract: Create Contract

Initial Screen
Complete all the fields

Contract Manager specifies

the organizational unit that
is responsible for managing
the contract data.

Click this button to

continue, after
inserting all details

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Account Contract: Create Contract

Basic Data
Enter the Contract Purpose and a Contract Currency

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Account Contract: Create Contract

Agreement

2 Specify the Start of

Term date in the popup window, the
duration of agreement
and the Period Unit
3

3
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Create a new
agreement

Click to continue

Account Contract: Create Contract

Condition Fixing
The Condition Fixing entry occurs as a result of the agreement creation

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Account Contract: Create Contract

Payment Agreement
Enter the Installment Amount, Installment Agreement Start, Installment with Interest
(yes/no) and the term of the contract.

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Account Contract: Create Contract

Payment Agreement
Enter the Installment Amount, Installment Agreement Start, Installment with Interest
(yes/no) and the term of the contract.

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Account Contract: Create Contract

Billing
The Billing involves the determination of expected payment items at a specific date during
a regular cycle (the bill period).

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Account Contract: Create Contract

Limits
Set capital limit amount

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Account Contract: Create Contract

Additional contract details can be defined on each page of the Create account
Section. Finally save the contract details.

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Terminology
Overview
Creating a Contract
Account Contract Features

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Account Contract: Change Contract

Change Contract
System attributes:
Can not be changed manually as they are set by the system
Order attributes:
You can only change these attributes using processes or orders
(status -> account closure, for example). Orders take account of the
mutual dependencies of the functions affected by the operation
Changeable attributes:
These attributes are always changeable (but you can exclude them from
being changed)

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Account Contract: Change Documents

All changes to the account master data are logged

The way the change documents are displayed is determined dynamically from the timedependent master data of the account contract

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Conditions Model in AM
The respective account product is the link between the conditions and the account
contract
You use condition groups to apply values to standard conditions and assign them
to the account product
You store individual conditions in the account contract

Product

Settlement

Transaction

Event

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Debit interest: 11%

Overdraft interest: 5%
...
Value date: 0 Days
ATM withdrawal: 0.10
...
Account closure: 3.00
Lock EC card: 5.00
...

Account Contract: Individual Conditions

Individual Conditions
These apply for one account contract only and depend on
the standard conditions stored for the product.
They replace the standard conditions. If the time period for individual
conditions is restricted, the standard conditions apply after the validity period
expires.
You can store them at any time in the contract.
The account product must permit the assignment of individual conditions.

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Account Contract: Events

Business-related events for the contract are listed in an overview in

the account master data
Every event refers to a certain time during the "life cycle" of an account
contract

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Event

Description

Date

Time

Author

0001

Contract Start

01/01/2001

11:01:41

F002345

0002

Last Change

03/25/2002

22:45:03

G343445

0003

Product Change

03/25/2002

22:45:03

G343445

Account Contract: Bank Statement

Any number of agreements:

-

With different time periods

With different bank statement recipients

Options for creating bank statements:

-

Self-service "on request" (bank statement printer)

Periodically

Both periodically and at bank statement printer

Compulsory bank statement based on a defined period

Event-controlled bank statement (for an account closure, for example)
1 - n bank statement recipients per agreement (1 original / n duplicates)
Balance confirmation as per legal requirement (at least once per calendar year)

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Account Contract: Features and Locks

You can define locks separately for features and transaction

type groups/media
You can set a lock directly in the account master record or using
Posting Lock Management
You can set locks corresponding to certain amount intervals
You can store which features the contract processing staff can activate or deactivate
You can store if locks are possible
You make the restriction in the product

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Account Contract: Condition Fixing

This represents the duration for which the Commitment capital and
the conditions assigned to a contract takes effect
The following data must be entered during loan contract creation:

Start of term
Term

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Account Contract: Payment Details

Payment Instructions can be stored on the loan contract level.

The following details must be entered on the loan contract:

Payment details type

Bank country key
Bank key
Bank Account number
Account holder Name

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Account Contract: Insurance Link

The purpose of the Insurance Link is to display the insurance policies

linked to a Loan.
The following details are displayed on the loan contract:
Insurance company name
Insurance policy number
A business partner in the role Payer / Policy Holder must exist

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