This topic describes the systematic instructions to create penalty parameters configuration.

1. On Home screen, under Menu, click Retail Deposits. Under Retail Deposits, click Configurations.
2. Under Configurations, click Penalty Parameters Configuration, under Penalty Parameters Configuration, click Create Penalty Parameters Configuration.
   The Create Penalty Parameters Configuration screen displays.

   Figure 1-13 Create Penalty Parameters Configuration

   
   

   
   Description of "Figure 1-13 Create Penalty Parameters Configuration"

   
   
3. Specify the fields on Create Penalty Parameters Configuration screen.
   Click the Add button in the Add Penalty Days to Deposit Parameters. The Add Penalty Parameters screen displays.

   Figure 1-14 Add Penalty Parameters

   
   

   
   Description of "Figure 1-14 Add Penalty Parameters"

   
   

   For more information on fields, refer to the field description table below.

   Table 1-14 Create Penalty Parameters Configuration - Field Description

   Field	Description
   Deposit Term	Specify the tenor of the deposit in days.
   Penalty Period	Specify the penalty period to be considered for penalty calculation in days. For each specified deposit term, a penalty period can be configured and when there is a premature redemption of the deposit, the penalty is calculated basis the term of the deposit and the corresponding penalty days maintained for the deposit term in this maintenance.

   Example for penalty calculation based on the maintained parameters:

   Deposit Amount - $10,000

   The deposit rate for a 3 year CD is 3%

   Scenario: Customer has opened a 3 year CD of $10,000 on 01-Jan-2023. Maturity date for the same will be is 31-Dec-2026.

   Customer wishes to pre-close the CD after 6 months from the date of deposit that is 01-July-2023.

   Then the interest is calculated at the rate original rate of 3% for 6 months as per US requirements.

   Considering the below penalty configuration in the bank level:

   Table 1-15 Penalty Configuration

   Deposit Term	Penalty Period
   30 days	30 days
   90 days	60 days
   6 months	90 days
   1 year	180 days
   3 year	180 days
   5 year	360 days

   Penalty is calculated at the original CD rate of 3% for a period of180 days (6 months) since the CD tenor is 3 years in the example above.

   So, considering simple interest - Interest = (10000*(0.03/12)*6) = $150

   AND Penalty = (10000*(0.03/12))*6 = $150

   Therefore, in this case the final payout will be = Principal + Interest – Penalty = 10000 +150 – 150 = $10000.

   Note:

   The example does not take tax into consideration. For simplicity purposes, simple interest formula is used for calculating interest and penalty.

   1. Click the Add or Add Another button to include the penalty parameters in the Create Penalty Parameters Configuration screen.
4. After specifying all the details, click Save to complete the steps. Or, click Cancel to exit without saving.