rd loan in finacle : RD Loan Processing in Finacle Guide

To process a Recurring Deposit (RD) Loan in Finacle, follow these structured steps. Note that exact transaction codes or menus may vary depending on your bank’s configuration, so consult internal guidelines if needed.

Key Steps to Process an RD Loan in Finacle

1. Verify RD Eligibility
   • Ensure the RD account is active and meets the bank’s criteria (e.g., minimum tenure completed, sufficient balance).
   • Check the loan-to-value (LTV) ratio (e.g., up to 90% of RD balance).
2. Create the Loan Account
   • Use transaction code CCL (Create Customer Loan) or a bank-specific code.
   • Input details:
     • Loan product type (e.g., “Loan Against RD”).
     • Loan amount, interest rate, tenure, repayment schedule.
     • Link the RD account as collateral.
3. Hypothecate the RD (Assign Collateral)
   • Use the HACSP (Hypothecation Against Term Deposit) transaction.
     • Specify the RD account number and loan account number.
     • Enter hypothecation details (amount, terms).
4. Disburse the Loan
   • Use LADISB (Loan Account Disbursement) or a similar transaction.
   • Credit funds to the customer’s linked account.
5. Documentation & Validation
   • Upload signed agreements (e.g., hypothecation deed) to Finacle’s document tracking system.
   • Confirm regulatory checks (e.g., KYC) are complete.
6. Post-Disbursement Actions
   • Monitor repayments via LATR (Loan Account Transaction) or repayment schedules.
   • Use HARCL to release the RD hypothecation once the loan is repaid.

Important Notes

• Transaction Codes:
  • HACSP: Assign collateral.
  • HARCL: Release collateral after repayment.
  • CCL/LADISB: Loan setup and disbursement.
• Interest & Repayment:
  • Loan interest is typically higher than the RD’s earned interest.
  • Repayment failure may trigger RD liquidation.
• Troubleshooting:
  • Ensure the RD is not marked for premature closure.
  • Validate loan-RD linkage in Finacle.

Best Practices

• Test the process in a UAT environment first.
• Confirm bank-specific policies (e.g., maximum loan tenure).
• Use Finacle’s Inquiry menus (e.g., LAI for loan details) for verification.

For detailed workflows, refer to your bank’s Finacle SOP or contact technical support.