Difference in MIS and SCSS interest in First installment after migration to Finacle

Difference in MIS and SCSS interest in First installment after migration to Finacle

When any office is migrated to CBS, while generating interest for the first quarter after migration, one day’s interest is deducted by Finacle from the due quarterly interest. This interest belong to the day of account opening given by Sanchay Post. This one day interest will be paid on the day of closure by Finacle. This is happening due to fundamental difference between Sanchay Post and Finacle. Sanchay Post  is paying interest for the day of account opening and not for the day of closure e.g account opened on 3.4.2013 will be matured in Sanchay Post on 3.4.2018. Sanchay Post will pay interest from 3.4.2013 to 2.4.2018 and payment will be made on 3.4.2018.In Finacle, with same example, interest will be calculated and paid from 4.4.2013 to 3.4.2018 and payment will be made on 3.4.2018. Total interest in both the cases will be same. When account is opened in Sanchay Post and closed in Finacle, one day’s interest will be paid extra. Therefore, this extra interest is being deducted in Finacle during first payment after migration

SCSS/MIS

In Sanchaya, rounding off was being done every quarter/month to the higher side of a rupee if interest is in 50 paisa or more but Finacle adjusts rounding off every quarter/month to restrict total interest to the actual rate of interest. Therefore, any extra interest already paid in Sanchay Post due to higher rounding off is also deducted during interest credit of first quarter/month after migration. 

For migrated MIS Accounts, Finacle is calculating interest on basis of number of days in a month from the date of opening of account.

Due to this, interest is not calculating equally for every month. This issue has been taken up with Infosys for correction. Till it is rectified, customer should be convinced that less interest credited/paid if any will be adjusted during next month.

Sanchay Post interest paid details can be known by invoking menu TIPM. Unpaid interest in Sanchay Post can be viewed in HIOT and interest calculated after migration can be viewed through HTDTRAN.

Sample Calculation of Interest in Finacle

1) Sanchay Post calculates interest from the date of opening till the date prior to maturity        date. Example account - 0123456789, Sanchay Post calculates interest 30/09/2009-               29/09/2014. No interest is paid for 30/09/2014. Finacle calculates interest from the next       day of opening till the date of maturity. In this case from 01/10/2009-30/09/2014. So, the      first interest payment of Rs.24/- is excess.

2) Sanchay Post rounds off the interest amount during every quarter; in this case Rs.2227.5 is rounded off as Rs.2228. Finacle does the rounding off / flooring off on such accounts on alternative quarters. Please view the Flow tab for this account for more clarity. 

3) For broken periods, Finacle calculates interest as follows (Eg. account-0123456789):

Quarterly amount / 3 => 2227.5/3 = 742.5

(Monthly amount / number of days in the month) * number of interest-eligible days => (742.5/31)*21 = 502.98 rounded off to 503.

4) This amount is also visible in the Flow tab of the account.

So, the interest amount depends not only on the principal amount but also on the date of opening and the number of days in the month.