Migration of manual Non Performing Loan accounts in to Live, NPL accounts operation and procedure for creation of New City Code in TBM

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1 ANDHRA PRAGATHI GRAMEENA BANK HEAD OFFICE : KADAPA Circular No: BC ITD Date : Migration of manual Non Performing Loan accounts in to Live, NPL accounts operation and procedure for creation of New City Code in TBM Attention of the branches/offices is invited to the captioned subject. Hither to, the branches are maintaining Non Performing Loan accounts in manual system. The software vendor has provided program to migrate manual Loan type (other than Overdraft, Pragathi Kisan Credit Card) NPL accounts into system. The branches should make live non-suit filed NPL accounts of Module Type 30 i.e, Loans and 31 i.e., Gold Loans (all accounts except Overdraft accounts and Pragathi Kisan Credit Card) in respective Parent account Product Code with account status as 11 i.e., NPA in Account Master with the existing Parent Account number. The procedure to bring manual NPA accounts of Module Type 30 i.e, Loans and 31 i.e, Gold Loans into live is given in Annexure I. The procedure for verification of accuracy of data entry is given in Annexure II. Branches should follow the procedure and verify the data entered for all loan products (whether the product contains NPA accounts or not) brought in to live either through conversion or manually and ensure that the data is accurate for all accounts. The procedure for operations in NPL accounts and revised Trial Balance concept is given in Annexure III. The procedure for creation of new City code to assign the same in Customer Master is given in Annexure IV. Branches are advised to go through the same and adopt the procedure without any deviation. The procedure to bring manual NPA accounts of Overdrafts, Pragathi Kisan Credit Card will be informed in due course. To avoid wrong data entry and confusion, while entering the outstanding balances, instead of bringing all the existing manual NPA accounts in to live at once, Branches should segregate the accounts basing on Parent account Product Code and bring the accounts in to live i.e., Product-wise in a phased manner. The software is provided to the IT Officers for trial run in selected branches and the observations of the IT Officers and the suggested remedies are as under. Cont 2

2 Circular No: BC ITD, Date : In case of loan accounts, which are brought into live but subsequently closed in the system as they were classified as NPAs, the system will not allow to open another account with same account number in Parent Loan Product. In such cases, branches should give three digit account number (instead of normal Four digits) after year number and record the same in Loan ledger for future reference. For example: for account number 325/2005. Further, all the Officers of the branch should diarise those account numbers for easy accessibility and guide the staff while operating the account. Whenever a credit (Loan) is offered for NPA account, if the branch enters the normal four digit loan account number, the system will not allow credit and prompts message as Account is Closed. Whenever such message appears, branches should identify the outstanding NPA account number of the Customer with F9 O (Alphabet O ) option and receive credit for that account. Branches should open all the other NPA accounts with four digits account number as in the case of normal accounts. Legal action initiated Loan accounts information shall be displayed separately in Trial balance report. The procedure for migration of Suit filed accounts will be informed separately. Branches now should migrate other accounts only to live The endeavor of the Bank is to classify NPAs for the year ended March 2009 through system process only. Hence the branches should invariably bring the existing manual accounts in to live immediately before 15 th March Clarifications required if any in this regard may be sought from Head Office, IT department through their respective Regional Offices. (B.ANANT RAO) GENERAL MANAGER Annexure-I to Circular No: BC ITD, Date :

3 ANNEXURE I Procedure to bring manual Non Performing Loan (Non Suit Filed) accounts of Module Type 30 i.e, Loans and Module Type 31 i.e., Gold Loans into live 1) Loading of NPA programs: Ensure that the NPA programs provided through CD namely New Program2012 are loaded and Unrealized Interest on NPAs is transferred to / 1 (INT ON NPAs MANUAL) from as per Circular BC-ITD dated Further ensure that new NPA programs provided through CD namely New Programs3101 are also loaded. 2) Classification of existing NPA accounts basing on Parent Product Code: Branches should initially segregate the existing manual accounts basing on Parent Account Product Code, tally the balances with General Ledger balance, Calculate Interest up to proposed live date for eligible accounts, tally the unrealized Interest on NPAs (account-wise Interest receivable) and proceed for creation of Master data entry. Branches should bring the accounts in to live in a phased manner basing on Parent Product Code. Initially select one product code, create Masters for all the accounts come under that product, enter outstanding balances through voucher entry program and proceed for another Product. Branches should note that the Parent Account Product shall be running in live for bringing the NPA accounts in to live under that Product. Among many different Products, if any Product is not running in live, the branches should not wait for bringing other NPA accounts in to live till the pending Product is brought in to live. The branches should bring all other accounts in to live immediately. After bringing the pending Product in to live, the manual NPA accounts of that Product shall be brought in to live one day later the Product brought in to live. 3) Modification of Parameters for Master Data entry: Since the account number of Parent Account pertains to previous years, branches should enter the account number manually while creating the Account Master. To accept manual entry of account number, branches should modify the Auto Generate Acct. No parameter as N (NO) in Product Master of relevant Product. The sequence in the menu to modify the Product Master is Params-->Products Maintenance-->Product Administration--> Product Master--> Modify Product Master Maintenance screen will be displayed. Branches should modify the Auto Generate Acct. No parameter value of respective Loan product of which the NPA accounts are going to be brought into live, as N (NO) and authorise the modification. Branches shall not modify the other parameter values of the screen at any instance. The model screen after modification of Auto Generate Acct. No parameter value as N (NO) for Pragathi Flexi Trade Loan product is given here below for ready reference. Cont 2 Annexure-I to Circular No: BC ITD, Date :

4 Branch code <<BIC CODE>> -2- Product PRAGATHI FLEXI TRADE LOAN Currency code INR INDIAN RUPEES Customer / Internal C CUSTOMER Voucher entry Level A ACCOUNT Acct. Open Level A ACCOUNT Module type 30 LOANS Type of Deposit Auto Generate Acct. No N No Auto Generate Sub.Acct.: N NO Min Bal-cheque Book Assets/Liability A ASSETS Min Bal- Non cheque Fin/Non Fin F FINANCIAL Conditional Asset GL Conditional Liability GL Reconciliation Type N None Implementation Date <<DATE>> Product Status 1 Normal/Operative Accrued Y/N N No Cash DR/CR Transfer DR/CR Clearing DR/CR Y Y Y Y N Y ALM Classification Main SUB Last DR Date <<DATE>> Last CR Date <<DATE>> Later ensure that the Product Masters of Unrealized Interest (14401 and 14901) on NPAs are as per Circular No BC-ITD dated The model screens of the products are given here below for ready reference. Branch Code Product Code UNREALISED INTEREST ON NPAs Currency Code INR INDIAN RUPEES Customer/Internal I Internal Voucher Entry Level P Product Account Open Level P Product Module Type 99 General Ledger Type of Deposit Auto Acct Generate No N No Auto Generate Sub Acct N No Min Bal-Check Book Asset/Liability L Liability Min Bal-Non Check Fin/Non-Fin F Financial Conditional Asset GL Conditional Liability GL Reconciliation Type N None Implementation Date <<DATE>> Product Status 1 Normal/Oper ative Accrued N No Cash DR/CR Transfer DR/CR Clearing N N Y Y N N ALM Classification Main Sub Last Dr Date Last Cr Date Branch Code Product Code UNREALISED INTEREST ON NPAs Currency Code INR INDIAN RUPEES Customer/Internal I Internal

5 Voucher Entry Level A ACCOUNT Account Open Level A ACCOUNT Module Type 971 Interest Receivable Type of Deposit Auto Acct Generate No N No Auto Generate Sub Acct N No Min Bal-Check Book Asset/Liability A ASSETS Min Bal-Non Check Fin/Non-Fin F Financial Conditional Asset GL Conditional Liability GL Reconciliation Type N None Implementation Date <<Date>> Product Status 1 Normal/Operative Accrued N No Cash DR/CR Transfer DR/CR Clearing N N Y Y N N ALM Classification Main Sub Last Dr Date Last Cr Date Cont 3 Annexure-I to Circular No: BC ITD, Date : Branches should ensure that the Loan parameters of the respective Product is as per Circular BC-ITD dated The sequence in the menu to verify the Loan parameters is Params-->Products Maintenance-->Product Administration--> Parameters Creation--> Loans --> Browse Loan Accounts Parameters Maintenance screen will be displayed. The first page of model screen for Pragathi Flexi Trade Loan product is given here below for ready reference. Branch Code Product PRAGATHI FLEXI TRADE LOANS Loan Type 2 CAPITALISED/NONINT REC) Equated Y/N Y YES Funded Y/N Y YES Interest Application Frequency M MONTHLY Grace Days Installment Product Calculation Type 1 On Slab Rates Grace Days Interest Round Off F Nearest 1.00 Min Days For Int 7 Min Amt For Int Penal Interest Rate 2.25 Max. Penal Int Rate Interest Tax NPA Penal Rate Default Transfer Batch TR-INT TRANSFER INTEREST Interest Credit Account Interest Receivable Account Interest Reserve Account Penal Charges Debit Account Penal Charges Credit Account Int Chrg Type T TOTAL #Months (ValueDate) DisIntRate YN N NO No of Days In Year 365 Max Sanc Limit Accept NPA Date Y YES Charge Full Month Interest in Closure N NO The next Page of the screen shall be as follows.

6 From Date <<DATE>> To Date <<DATE>> Status INTEREST PROVIDED Last Account <<AC NO>> No of Account <<NO OF ACs>> Un-Recov Exp A/C NPA Interest Receivable Account Reserve Account NPA Penal Interest Receivable Account Reserve Account NPA Other Charges Receivable Account Reserve Account Annexure-I to Circular No: BC ITD, Date : Cont 4 4) Recording Customer ID of Borrower and Savings Bank A/C Number of Surety: After ensuring that the Product Master and Loan Parameters are as furnished above, branches should make data entry by creating Account Master, Limit Master and all other relevant Masters like live account. Customer ID is the prerequisite for creation of Account Master for any Loan or Deposit Account. The Customer ID is unique. One Customer should have one Customer ID only and the same shall be assigned for all his/her accounts and other business transactions. All the Loan Customers are having Savings Bank accounts and a Customer ID has already generated for all Savings Bank account holders while converting the Data. The same Customer ID shall be assigned while creating Account Master for NPA accounts (The rule is same in case of other accounts also). If any Customer has more than One Customer ID, the Customer ID assigned to his/her Savings Bank account shall be treated as Correct one and the same shall be assigned for all his/her accounts. Branches should identify the Customer ID of the borrower with F9 A option basing on his Savings Bank account number and note the same in manual Loan ledgers with Sketch pen. While creating Loan Other Details Master, branches should assign the Surety details basing on his Savings Bank account number. Hence, branches should ensure that the Savings Bank Account number of the Surety is available in the Loan Ledger. If the same is not available, branches should verify the Loan file and other relevant records identify the Savings Bank Account number and note the same in Loan Ledger. 5) Master Data entry Branches should ensure that all required information is available in the manual loan ledgers and proceed for creation of Master Data entry starting from Account Master with Parent Loan account Number under respective Product. While entering Basic Details Master linked to account opening process, branches should enter NPA codes in relevant fields as explained under Point 6 here below. The sequence in the menu to create Account Master and other related Masters is Masters --> Account Master --> Customer Account --> Create The fields in the screens are self explanatory. The Other Branch Transfer Acct Y/N in second page of Account Master shall be Y for all the loan accounts. While making data entry, the model screen of second page of Account Master shall be as follows. In Relation with Director N Relation Facilities Check Book YN N Other Branch Acct. Y/N Y

7 Available PLR Link YN Y ATM Y/N N Charges Applicable MIS Codes TDS Y/N TDS Reason Code 99 NOT REQUIRED Statement Frequency N Send on Last Print Date Demat YN N Demat No N Service Charges N Minimum Balance Charges N Pass Book Charges N Inspection Charges Y Check Book Charges N Folio Charges N BIC Code SIC Code Cont 5 Annexure-I to Circular No: BC ITD, Date : ) Creation of Loan Basic Details Master for NPA accounts: Each field in Loan Basic Details Master has its own significance in generation statements/reports. The fields in the screen are self explanatory and the branches should enter data in all the fields invariably. In case of NPA accounts, branches should enter the following values in Asset Classn: field in first page of the screen. S.No. Account Status Asset Classn Code 1 Sub Standard 2 2 Doubtful up to 1 year 5 3 Doubtful from 1 year to 3 years 6 4 Doubtful above 5 years 7 5 Loss Assets 8 The values in the second page of the screen shall be as follows. NPA Frequency U User defined Asset Code <<Relevant Code>> with F2 option as above OverdueSinceDate <<O.D Date>> NPA SinceDate NPA Reason Code <<Relevant Reason>> with F2 option Remarks Remarks if any may be entered <<Date of NPA>> Branches should enter data in all the fields and all the screens namely Limit Master, Other Details Master, Basic Details Master etc,. After creation of all Masters and before proceeding for authorisation, branches should modify the Account Status as 11 ( NPA) for all accounts as stated below. 7) Modification of Account Status: The sequence in the menu to modify the Account Status in Account Master is Masters --> Account Master --> Customer Account --> Modify After modification, the first page of Account Master screen for Pragathi Flexi Trade Loan account shall be as follows.

8 Branch Code Account PRAGATHI FLEXI TRADE LOANS Customer No. 15 Customer ID HNW Cust. Cat Template Y/N N NO Template Account ID Account Name MR <<Customer Name>> Acct. Type 1 Normal Mode of Operation 1 SELF Account Status 11 NPA Minor Type Currency Code INR Ledger Annexure-I to Circular No: BC ITD, Date : Offset Rate. Mal. enal Interest Tax Freeze Type 1 NO FREEZE Reason User/Date pen <<user>> <<Date>> Closed Member Type Member No. Reason for Member Additional Information Date of Establishment / Date of Birth Pay in Account Drawing Power N/D/M N -6- Cont 6 After modifying the Account Status, branches should authorise all the accounts like live accounts. Ensure that data entry is completed for all the Loan accounts of respective product, Status is modified and the Masters are authorised. 8) Modification of Account Open Date in Account Master: While opening the Account, the branch has no option to enter the date of opening in Account Master and the system will automatically takes the date of data entry in Account Master as the account opening date. But in Limit Master the User has option to enter the Effective Date and Sanction Date which are the dates of opening of the Loan account. Since the branches should enter sanction date (old date) in Limit Master and has no option to enter the date in Account Master, there may be a conflict in Account opening date in data and it may lead to wrong information in generation of reports and some other functions. Hence, branches should equate the dates by executing Account Opening Date Updation Process program. The sequence in the menu to execute the Account Opening Date Updation Process program is Process Programs --> Loans --> Account OpeningDate Updation Account Opening Date Updation Process screen will be displayed. Execute the program initially in trial mode for respective Product, observe the account open date and disbursement date difference and execute the program in Apply mode. The program will modify and equate the Account opening dates of the accounts in Account Master. Branches should note that the program will update the date of opening of all accounts

9 (not only NPA) of the Product. Further, the branches should execute the program for all Products while bringing in to live. 9) Balancing of NPA Accounts: Branches should ensure that the Notional Interest is calculated up to date for respective NPA accounts and passed contra vouchers for Unrealized Interest on NPAs (i.e., debit for and credit for 14401). Cont 7 Annexure-I to Circular No: BC ITD, Date : Segregate the NPA accounts basing on Parent Loan Product Code and tally the account-wise book-balance and notional Interest. If the Book-balance is more than the actual disbursement made, the amount over and above the disbursement made shall be arrived account-wise. Branches should take balancing of NPA accounts basing on Parent Product Code of the Account in five columns namely Actual Disbursement made, Book Balance (Equal to or less than the actual disbursement made), Book Balance over and above the disbursed amount, Total Book-Balance and Notional Interest and tally the total of Book Balances with NPA balance and Notional Interest with Unrealized Interest on NPAs balance. 10) Modification of Loan Type Parameter to take care of Notional Interest creation: Branches should modify the Loan Type parameter value as 3 Capitalized/Intrec in Loan Accounts Parameter Maintenance screen and authorise to create account-wise Notional Interest record. The other parameter values in the screen shall not be modified at any instance. The menu sequence to modify the parameter is Params --> Product Maintenance --> Product Administration --> Parameter Creation --> Loans ---> Modify The first page of model screen after modification of the parameter for Pragathi Flexi Trade Loans shall be as follows. Branch Code Product PRAGATHI FLEXI TRADE LOANS Loan Type 3 Capitalized/Intrec Equated Y/N Y YES Funded Y/N Y YES Interest Application Frequency M MONTHLY Grace Days Installment Product Calculation Type 1 On Slab Rates Grace Days Interest Round Off F Nearest 1.00 Min Days For Int 7 Min Amt For Int Penal Interest Rate Max. Penal Int Rate Interest Tax NPA Penal Rate Default Transfer Batch TR-INT TRANSFER INTEREST Interest Credit Account Interest Receivable Account Interest Reserve Account Penal Charges Debit Account Penal Charges Credit Account Int Chrg Type T TOTAL #Months (ValueDate)

10 DisIntRate YN N NO No of Days In Year 365 Max Sanc Limit Accept NPA Date Y YES Charge Full Month Interest in Closure N NO 11) Outstanding Balances entry: The account level balances shall be entered for each account through Voucher Entry program BEFORE DAY-END in Transfer Batch with ACCTTRFR (ACCOUNT Annexure-I to Circular No: BC ITD, Date : Cont 8 TRANSFER) activity. The ACCTTRFR is a debit activity. Hence, initially punch the vouchers for all the NPA accounts to which Masters are created with ACCTTRFR activity in a single set. While entering the values in the screen The Value Date shall be the Current Date i.e, Date of entry The Principal Amount shall be the outstanding book-balance in case of accounts whose book-balance is equal or less than the actual disbursement made and it shall be the disbursed amount in case of accounts whose book-balance is more than the Disbursed amount. The Interest Amount shall be the up to date Notional Interest amount of relevant account. The Narration shall be To NPA Manual The Disbursed Amt shall be the Actual Disbursement made till date. Move on to OK button and press Space Bar. The system will generate the following debit vouchers. Balance entered in Principal Amount field will be debited to relevant product and the balance entered in Interest Amount field will be debited to (14901/----Product Code) Unrealized Interest on NPA accounts. In case of loan accounts whose book-balances are more than the Disbursed amount, the excess amount over and above the book-balance noted in Balancing Book shall be debited to respective loan account in the same set with PRNBALDR (LOAN PRINCIPAL CREDIT REVERSAL) activity. The Voucher narration while entering the value shall be NPA BOOK BALANCE. After ensuring that all the vouchers are punched for all accounts, branch should punch relevant credit vouchers. Credit total Book Balance amount to existing relevant NPA Product (Product Code to 16614). Branches should note that the amount shall not be more than the outstanding trial balance amount of the Product. Credit total of Notional Interest to / 1 (INT ON NPAs MANUAL). Branches should note that the amount shall not be more than the outstanding balance amount. After making Voucher entry authorise all the transactions. After punching all the vouchers branches should ensure that the Outstanding Balances

11 under existing NPA products and OR / 1 (INT ON NPAs MANUAL) shall not become as CREDIT balance at any instance and the outstanding balances under and is same in trial balance report. 12) Verification of Account Level Balances and ensuring correctness: After completion of voucher entry, authorisation and confirmation of above, branches should ensure that the account level balances and Interest amount is entered correctly. For Cont 9 Annexure-I to Circular No: BC ITD, Date : ensuring the same branches should run latest balances for loans program with selected status option as 11 i.e., NPA, take printout, verify the account level outstanding and Interest amount with the values of Balancing book and ensure that all the values are tallied. If the branches find any difference, pass relevant rectification vouchers and ensure that the values are properly entered. The menu sequence to generate latest balance report is Reports --> Balancing Reports --> Latest Balances --> Latest Balance Loans The model screen while running the program for Pragathi Flexi Trade Loans shall be as follows. Product Code Pragathi Flexi Trade Loans All/Select/Range A ALL Spec. Acct. No From Acct. No To Acct. No All/Selected/Range Ledger A ALL Selected Ledger From Ledger To Ledger All/Spec Acct Type A ALL Spec. Acct. Type All/Spec. Status S SELECTED Specific Status 11 NPA Skip Zero Balances Y YES Skip Closed Accounts Y YES AFTER ENSURING THAT THE ACCOUNT LEVEL BALANCES ARE PROPERLY UPDATED, BRANCHES SHOULD INVARIABLY MODIFY THE LOAN TYPE AS 2 (CAPITALISED/NON INTREC), WHICH IS THE ORIGINAL STATUS, IN LOAN PARAMETERS SCREEN AND AUTHORISE THE MODIFICATION. The other parameter values of the screen shall not be modified. The menu sequence to modify the parameter is Params --> Product Maintenance --> Product Administration --> Parameter Creation --> Loans ---> Modify The first page of model screen after modification of the parameter for Pragathi Flexi Trade Loans shall be as follows.

12 Branch Code Product PRAGATHI FLEXI TRADE LOANS Loan Type 2 CAPITALISED/NO NINTREC) Equated Y/N Y YES Funded Y/N Y YES Interest Application Frequency M MONTHLY Grace Days Installment Product Calculation Type 1 On Slab Rates Cont 10 Annexure-I to Circular No: BC ITD, Date : Grace Days Interest Round Off F Nearest 1.00 Min Days For Int 7 Min Amt For Int Penal Interest Rate Max. Penal Int Rate Interest Tax NPA Penal Rate Default Transfer Batch TR-INT TRANSFER INTEREST Interest Credit Account Interest Receivable Account Interest Reserve Account Penal Charges Debit Account Penal Charges Credit Account Int Chrg Type T TOTAL #Months (ValueDate) DisIntRate YN N NO No of Days In Year 365 Max Sanc Limit Accept NPA Date Y YES Charge Full Month Interest in Closure N NO IMPORTANT NOTE: If the branch did not modify the Loan Type to its original status as above, the Interest functions of Standard accounts will be corrupted. Hence, branches should be more cautious and modify the parameter invariably. 13) Verification of End of Day Process : Whenever credits are received for NPA accounts, the credit received shall be appropriated in sequence to Pending Charges, Unrealised Interest and Book-Balance. Whenever there is a credit to the Unrealised Interest portion, the amount shall be credited to Interest on Loans account and pass contra vouchers to Unrealised Interest Products. To effect the above transactions certain parameters shall be created in End of Day Procedure program. The Parameters are already created in the branches. The branches should verify the data in below furnished menu path with Browse option and ensure that the parameters are already available. If the branch did not find the parameters, it should create the parameters as furnished below. The sequence in the menu to create the End of Day Parameters is NPA --> End of Day Process --> Create End of the Day Procedure screen will be displayed. The parameter values in the screen for Pragathi Flexi Trade Loans (16031) shall be as follows.

13 Branch Code <<BR CODE>> System will automatically Pick. Need not be entered manually. Account INT ON NPA PRAGATHI FLEXI TRADE Voucher Type C CREDIT DR Account UNREALISED INTEREST ON NPAs CR Account INTEREST ON ADVANCES Cont 11 Annexure-I to Circular No: BC ITD, Date : Except the parent loan Product code, all the other parameters are same for remaining loan Products. 14) Modification of Customer Rating: After bringing the NPA accounts in to live the rating of the Customers shall be brought under NPA category to effect NPA features for future business transactions. For assigning the NPA status to respective Customer ID, the Customer Master shall be modified accordingly. Since the Customer ID is created from converted data, many fields in the Master are blank and require data entry. Branches should enter relevant data in all the fields with special reference to Area and City fields in the first screen of the Customer Master. The value in the Area field shall be the branch location and the value in the City field shall be the residential village of the Customer. If any village code is not available in lookup screen of City field, branches should initially create a new village code for respective village as per procedure given in Annexure IV of this circular and later assign the village name in Customer Master. Since village-wise information like defaulter list etc., are generating basing on the values available in City field, branches should ensure that the value in City field for all Customers has correct value and shall not be blank. The sequence in the menu to modify the Customer Rating and up date the Customer Master is Masters --> Customer Master Creation --> Modify Customer Master maintenance screen will be displayed. Branches should fill blank fields with relevant values and fill the Rating field in first screen with the following values basing on status of respective NPA account. The rating values shall be as follows. S.No NPA account status Rating 1 Sub Standard 92 2 Doubtful up to 1 year 93 3 Doubtful from 1 to 3 years 94 4 Doubtful above 3 years 95 5 Loss Assets 96 After modifying the Customer with relevant values, branch should authorise the Customer Master invariably.

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15 Annexure-II to Circular No: BC ITD, Date : ANNEXURE II Verification of Data entry accuracy: After bringing the manual accounts in to live, branches should verify the accuracy of data entry through the programs furnished here below. Branches should verify the accuracy of data entry for all the manual accounts of the product brought in to live including the NPA accounts. A) Verification of Any Day Balances: Branch should run the program after day-end for Current Date or during business hours also for earlier days. For verification of any day balances report after bringing the NPA accounts of specified Product in to live, branches should make day-end and run Any Day Balances for Loans program. The menu sequence to view the balances is Reports --> Balancing Reports --> Any Day Balances --> Any Day Balance Loans Any Day Balance for Loan Account screen will be displayed. Branches should run the program twice with different Status options. Initially run the program for accounts of all Status and ensure that the Balances are tallied. The model screen while running the program for accounts of all Status for Pragathi Flexi Trade Loans shall be as follows. Product Code Pragathi Flexi Trade Loans All/Select/Range A ALL Sel. Acct. No From Acct. No To Acct. No Date for Bal <<Latest Day-end Date>> Skip Zero Bal N NO Skip Closed A/C N NO Balance Filter Balance Amt. All/Spec A/c Type A ALL Spec A/c Type All/Spec. Status A ALL Acct Status Verify the information generated in the report using Arrow key, move to the end of the report and ensure that the Difference field in summary of the report is blank. After ensuring that the Balances are tallied, branches should run the program for NPA accounts of the product with selected Status option for Acct. Status 11 i.e., NPA. The model screen while running the program for NPA accounts for Pragathi Flexi Trade Loans shall be as follows. Cont 2

16 Annexure-II to Circular No: BC ITD, Date : Product Code Pragathi Flexi Trade Loans All/Select/Range A ALL Sel. Acct. No From Acct. No To Acct. No Date for Bal <<Latest Day-end Date>> Skip Zero Bal N NO Skip Closed A/C N NO Balance Filter Balance Amt. All/Spec A/c Type A ALL Spec A/c Type All/Spec. Status S SELECTED Acct. Status. 11 NPA Verify the information generated in the report using Arrow key, move to the end of the report and ensure that the value in Total Required Principle Outstanding field is the total Book-Balance value of NPA accounts of the Product, the value in Total Interest Rec. Outstanding field is the Notional Interest value and the value in Total Outstanding field is the sum of Principle and Notional Interest value. If the branch finds any difference, identify the accounts having difference and pass relevant rectification slips during immediate next business session. B) Verification of Tallying of Accounts of the Product: After ensuring that the Any Day balances are tallied, Branches should run All OK Statement program for the Product and ensure that the account is tallied. The menu sequence to view All OK statement is Statements --> Monthly Reports --> Tallying of Accounts --> Loans All OK Statement for Loan Account (Any Day) screen will be displayed. Run the program with selected Product Code option. The model screen while running the program for Pragathi Flexi Trade Loans shall be as follows. From Branch Code To Branch Code Date for Balances <<Branch Code>> <<Branch Code>> <<Latest Day-end Date>> All/Specific PrdCd S SELECTED Product Code Pragathi Flexi Trade Loans Print Details (YN) N NO Skip Zero Balances (YN) Cont 3

17 Annexure-II to Circular No: BC ITD, Date : Verify the information generated in the report using Arrow key and ensure that the Jotting Balance and GL Balance for the Product are same and the values displayed under Interest As per A/C and Interest As per Int. Pay are also same. If the branch finds any difference, identify the reason and pass rectification slips during immediate next business session. C) Verification of Limit Master: Branches should verify the accuracy of data entered in Limit Master with special reference to Interest rates. The menu sequence to generate the Limit Master details is Statements --> Reference Reports --> Loans --> Masters Listing --> Limit Master Limit Listing for Given Rate of Interest screen will be displayed. The model screen to generate the report for Pragathi Flexi Trade Loans shall be as follows. Product Pragathi Flexi Trade Loans All/Selected/Range A ALL Specific A/C From Account To Account All/Selected/Range Rate A ALL Specific Int Rate From Int Rate To Int Rate Date <<Current Date>> Ensure that the information displayed in the report is correct. If the branches find any wrong information, the Limit Master for that account shall be modified accordingly, authorise and again run the above program and ensure accuracy. D) Verification of Surety Details: Branches should verify the accuracy of data entered in Other Details Master. The menu sequence to generate Surety details is Statements --> Reference Reports --> Loans --> Masters Listing --> Surety Master Loan Other Details screen will be displayed. The model screen to generate the report for Pragathi Flexi Trade Loans shall be as follows. Product Pragathi Flexi Trade Loans All/Sel/Range A ALL Sel. Account From Account To Account Skip Closed Accts YN Y YES Cont.4

18 Annexure-II to Circular No: BC ITD, Date : Ensure that all the outstanding accounts are covered in the report and the information displayed in the report is correct. If the branches did not find any outstanding account or finds any wrong information, the Other Details Master for those accounts shall be created / modified accordingly, authorise and again run the above program and ensure accuracy. E) Verification of Basic Details: Branches should verify the accuracy of data entered in Basic Details Master. The menu sequence to generate Basic details is Statements --> Reference Reports --> Loans --> Masters Listing --> Basic Details Loan Basic Details screen will be displayed. The model screen to generate the report for Pragathi Flexi Trade Loans shall be as follows. Product Pragathi Flexi Trade Loans All/Selected/Range A ALL Selected Acct From Acct To Acct Skip Closed Accts Y YES Ensure that all the outstanding accounts are covered in the report and the information displayed in the report is correct. If the branches did not find any outstanding accounts or finds any wrong information, the Basic Details Master for those accounts shall be created / modified accordingly, authorise and again run the above program and ensure accuracy. F) Verification of Security Details: Branches should verify the accuracy of data entered in Security Details Master. The menu sequence to generate Surety details is Statements --> Reference Reports --> Loans --> Masters Listing --> Securities Master Loan Security Details screen will be displayed. The model screen to generate the report for Pragathi Flexi Trade Loans shall be as follows. Product Pragathi Flexi Trade Loans All/Sel/Range A ALL Sel. Account From Account To Account Skip Closed Accts YN Y YES Ensure that all the outstanding accounts are covered in the report and the information displayed in the report is correct. If the branches did not find any outstanding account or finds any wrong information, the Loan Security Details Master for those accounts shall be created / modified accordingly, authorise and again run the above program and ensure accuracy. Cont 5

19 G) Verification of Document Details: Branches should verify the accuracy of data entered in Documents Master for Loans. The menu sequence to generate Document details is Statements --> Reference Reports --> Loans --> Masters Listing --> Documents Master Documents Master for Loans screen will be displayed. The model screen to generate the report for Pragathi Flexi Trade Loans shall be as follows. Product Pragathi Flexi Trade Loans All/Sel/Range A ALL Sel. Account From Account To Account Skip Closed Accts YN Y YES Ensure that all the outstanding accounts are covered in the report and the information displayed in the report is correct. If the branches did not find any outstanding accounts or finds any wrong information, the Documents Master for Loans for those accounts shall be created / modified accordingly, authorise and again run the above program and ensure accuracy. Since each screen and each field of every screen has its own importance for functionality and generation of reports, branches should not leave any field blank or skip any screen. Further, the branches should verify the accuracy of data entry for all Loan Products (even though the Product did not contain NPA accounts) as per points (A) to (F) whether they are converted from erst-while software or brought into live from manual system and rectify if any information is found wrong or create relevant Masters if any Master is not created and ensure that all the relevant masters are available and all the fields are properly filled. Annexure-II to Circular No: BC ITD, Date : ooo-

20 Annexure-III to Circular No: BC ITD, Date : ANNEXURE III Procedure for operation of Non Performing Loan Accounts Periodic Interest Application: As and when the Interest application program is invoked for Parent Loan Product, the Interest record of NPL accounts will be get updated and the system will pass automatically relevant contra vouchers for Unrealised Interest on NPAs Product. Debiting Charges: During the process of recovery, branches will incur some expenses which shall not be debited to the NPA account, but the expenditure should be linked to the account and the amount shall be recovered as and when the credits are received. While paying the costs, branches should invoke the following two functions through voucher entry in TRANSFER batch. Function One Enter respective Loan account number in Acct Id and move to Activity field. Select LNPACHDR (NPA CHARGES DEBIT) activity and punch voucher for required amount with the nature of transaction details in Narration field. System will pass contra entries to NFA (Non Financial Account) and mark the expenditure in Pending Charges status with the Account. The Credit and Debit entries will reflect in Statement of Account of the respective Loan account. Function Two: Now the branch should make payment by debiting relevant Expenditure account say General Charges etc. Recoveries in NPA Accounts: The amount of recovery of NPA accounts shall be appropriated initially to Pending Charges, Unrealised Interest and finally to Book-Balance. Hence whenever a credit is offered to the NPA account, branches should initially identify the outstanding pending charges amount of that account through the below mentioned menu path. NPA --> Pending NPA Charges Charges View for an Account screen will be displayed. Enter branch numeric code in LBr Code field and relevant account number in Account Id. field and press Enter key. Charge Type, Charges Prvd (i.e,. Provided), Charges Paid, relevant dates will be displayed. Note the difference between the Charges Provided and Paid amount which is the Pending Charges amount. Proceed to credit the recovery to the loan account as follows. Cont 2

21 Annexure-III to Circular No: BC ITD, Date : ) If the proposed credit is less than Pending Charges Amount: Initially, branch should book the pending charges amount to the extent of proposed credit only to the loan account through Voucher entry in TRANSFER batch. Enter respective Loan account number in Acct Id and move to Activity field. Select LNPACHCR (NPA CHARGES CREDIT) activity and punch voucher to the extent of proposed credit amount and the Cr. Acct. Id (Credit Account ID) shall be the account from which the Cost is paid or Misc. Account. The system will pass the following contra vouchers. Debit : Loan Account Credit: Respective Credit Account. After booking the Charges amount as furnished above the branches should punch relevant recovery voucher to the Loan account with INSTLPAY activity. 2) If the proposed credit is equal or more than Pending Charges Amount: The procedure is same as above but the branch should book the entire pending Charges amount to the Loan account with LNPACHCR (NPA CHARGES CREDIT) activity. 3) If no amount is outstanding under pending Charges: The branch should punch the credit voucher directly to the loan account with INSTLPAY activity as in case of non NPA accounts. Whenever a credit voucher is punched to the NPA account which has outstanding Unrealised Interest amount, the system will credit an amount equal to the Interest to Unrealised Interest Product (14901 / <<Product Code) and balance if any to main loan account. During Day-End process the system will credit an amount equal to total NPA Interest recovery of the day to Interest on Advances ( ) Product by debiting Unrealised Interest on NPAs (19401). Branch should ensure the same by verifying Scroll Print, Day Book and Trial balance of the day. 4) Closure of NPA Account: The procedure is same as that of non NPA accounts. But the branch should initially book pending charges amount if any to the loan account with LNPACHCR (NPA CHARGES CREDIT) activity and later proceed for account closure. Revised Trial Balance Concept: Since the NPA accounts are merging with Parent Loan, the outstanding balance shown against Parent Loan product in normal Trial Balance report should contain the sum of both the normal accounts and NPA accounts Outstanding balances i.e., The Outstanding Product amount Parent Loan will be raised to the extent of respective NPA balances and the NPA balances will be reduced to the same extent. To facilitate the branch to segregate the NPA accounts outstanding balance from normal accounts a new program is developed and the same is replaced the existing Trial Balance report generation program. The program will consolidate the outstanding balances of accounts having NPA status (i.e., 11), move the balance to NON PERFORMING LOANS - OTHERS (16601) by reducing the amounts from Parent Loan Products. Cont 3

22 The menu sequence to generate the revised Trial Balance report is same as the existing i.e., Statements --> Daily Reports --> After Day End --> Trial Balance Statements --> Weekly Reports --> Trial Balance Branches should generate the report through above referred sequence only for record purpose and to submit Regional Office. The existing Trial Balance report generation program is moved to the following sequence for reference in case of need. Statements --> Reference Reports --> Trial Balance Report Merging NPA A/Cs Annexure-III to Circular No: BC ITD, Date : ooooo-

23 Annexure - IV to Circular No: BC ITD, Date : Annexure IV Creation of New City Code to assign in Customer Master As and when the branches are proposed to join a new customer whose residential village name is not in the look up screen of City field, branches should invariably create new code for the village and assign the same in Customer Master. The same is in case of modification of Customer Master also. Before proceeding for creation of new City code, branches should assign a three digit alpha code (in Capitals) for the village (Generally first three letters of the Village. If those letters are already assigned for any village, branch should assign alternative letters available in the village name). The sequence in the menu to create the new City code is Admin --> Location Masters --> Place Master --> Create Place Master screen will be displayed. Enter newly assigned code in Place Code field, Village description in Place Name field and relevant values in remaining fields and click OK button. The model screen for creation new code for Mydukur village shall be as follows. Place Code Place Name MYD MYDUKUR State Description AP ANDHRA PRADESH Local or Foreign L LOCAL Country Code IN INDIA -ooooo-