Introduction to Overdraft Accounts

The banks can provide overdraft facility for an account automatically at the time of account opening. It is also possible to attach the limit manually to an existing account. The banks monitor these limits online and enhance or reduce it manually.

Ageing the overdraft facility, provides the ability to count the number of days and the number of times an account has been overdrawn in a period. The system generates notifications in the event of overdrawing and collects charges, if specified.

The system supports income suspension of overdraft accounts by suspending the debit interest and charges calculated after a specified number of days. During suspension, the accruals are posted to suspended balance types instead of posting to the Profit and Loss(PL) statement. When the suspension is resumed, all the entries posted under the suspense account are reversed to the PL statement. The suspension can be marked both automatically or manually.

Overdrawn accounts can be migrated from legacy and the ageing process can be continued in Temenos' system. Read the Migration of Overdrawn Accounts section of Limit Property Class user guide for more information.