Introduction to Deposits

Retail and Corporate deposits involve functionalities on different types of demand deposits and time deposits in both CNY and FCY currency for customers. The Deposits module supports the creation and operations related to demand and time deposits for customers.

Corporate Deposits

This functionality allows banks to manage Corporate deposits like demand deposits, time deposits, call deposits and agreement deposits. Also, this functionality enables banks to perform some special operations on Corporate deposits.

In the banking system, accepting deposits from customers is the foremost business of any bank. It is the most important source of credit funds available for the bank to lend, and on the other hand, customers keep depositing with banks to have safety for money and to earn interest. Further deposits can also be classified into many types based on the purpose and duration of the deposit.

Below are the common types of corporate deposits:

• Demand deposits: Corporate demand deposits refer to local currency or foreign currency deposits of corporate customers without savings terms to deposit and withdraw their funds at any time and earn interest on the deposit. It is mainly credited through deposits with cash or funds transfers. The following types of demand deposits products are created in order to meet the declaration requirement set by PBOC:
  • Primary Account.
  • General Account.
  • Current Account.
  • Temporary Account.
  • Multi-currency Account.
• Time deposits: Corporate term deposit refers to the deposit saved by corporate customers with temporarily idle funds and terms specified in the contract between the corporate customer and the bank, which means there is a fixed period for such deposits. The deposit is allowed only once at the opening time deposit account, and the bank prints a certificate of deposit for the customer. When the deposit is withdrawn upon maturity, the interest will be calculated following the interest rate agreed on the deposit date.
• Agreement deposit for a corporation: An agreement deposit is a type of corporate deposit, which is a deposit with an agreed savings amount in an account by a corporate customer. According to an agreement between the customer and the bank, the amount over the savings amount of such a settlement will be transferred by the bank into another corporate agreement account to accrue interest at a preferential interest rate.

Special operations on deposits - Using functionalities provided under special operations, banks are able to manage the interest accruals for the demand and time deposits by indicating whether to include frozen amount in interest accruals or not. Banks can also apply charges applied for the minimum account balance and the dormancy charges for dormant accounts. In the event of using corporate time deposits as the collateral for a loan, the customer needs to exchange this confirmation for certificate, the account confirmation will be stored in the bank. When the user performs a deposit receipt return transaction, the bank has to give back the account confirmation in exchange for the certificate.

Retail Deposits

The Retail Deposits functionality supports the creation and operations related to the demand, time and call deposits for retail customers. Also, this functionality enables banks to handle the adjustment of interest for partial withdrawals, the reversal of partial withdrawals and the deposits rollover for term deposit products.

Bank deposits are made to keep the amount at a banking institution, such as savings accounts. The account holder (bank customer who has an account with the bank) has the right to withdraw deposited funds, as set forth in the terms and conditions of the account.

There are different types of deposit accounts, which can be maintained by individuals with the bank, these are called Retail deposits i.e. the deposits, which individual customers maintain with the banks. Retail deposits here, refer to time deposits and demand deposits. Time deposits are money deposits at a banking institution that cannot be withdrawn for a fixed 'term' or period and demand deposits are the money deposits in a banking institution without any limit on deposits and withdrawals and no fixed term attached.

The rate of return is higher for time deposits than for demand deposits because the requirement that the deposit is held for a pre-specified term gives the bank the ability to invest it in a higher-gain financial product class.

The bank provides its customers who hold time deposits with a receipt for time deposits. This receipt is known as the Certificate of Deposit and has details like the duration for which the deposit is made, the amount of the deposit, the rate of interest etc. The bank provides its demand deposit holders and time deposit holders, with a Passbook facility. A Passbook is a paper book used to record bank transactions of the account.

The following items have been released as part of this functionality:

• The CNDEPO.PARAMETER application has been released as part of this module to configure the information required for the deposit interest payment, for both corporate and retail deposit products.
• The Withdraw Method field has been released as part of the AA.PRD.DES.ACCOUNT application to capture the withdrawal method for the individual customer, at the transaction level. The available options for this field are Password, Seal, Seal or Password.
• The CNDEPO.PARAMETER.OPEN (Deposits Parameter) enquiry has been released as part of this functionality to display all the record Ids for a given product.