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Query Related To RD Account Force Closure Behavior (Doc ID 2718232.1)

Last updated on OCTOBER 14, 2020

Applies to:

Oracle FLEXCUBE Core Banking - Version 11.6.0.0.0 and later
Information in this document applies to any platform.

Goal

Goal: Need to have clarity on the account force closure and grace period feature w.r.t. RD account functionality.

Example Scenario:

The RD account gets forceclosed on the next monthend after number of non payment of <> number of installments. Currently the parameter is set as 5.

RD products defined are anniversary products. Consider below 2 RDs:
Acct1:  Installment due date is 4th of every month
Acct2:  Installment due date is 29th of every month.

Both accounts no installments are pais since May-2020. As per the value set for <> both accounts were force closed on 1-Oct-2020.


Due to which period for which these 2 accts remained active after the lat installment was paid is different. Thus customer with acct1 had 150 days to pay the installment to avoid force closure whereas customer with acct2 had only 125 days t pay the installment to avoid force closure. Also though both customer defaulted 5 installments, acct1 is being paid interest for 150 days from last instalment and acct2 is being paid for 125 days from last instalment.

Thus, accounts with instalment date earlier in the month are benefitted over the accts with installment dates later in the month.

Also in case of acct2, customer is losing on the grace period facility which is maintained as 5 days for RD products.

Solution

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In this Document
Goal
Solution


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