Summer Internship Project Report

at

eClerx Services Pvt. Ltd. Pune

Streamlining regional differences across different Loans Processes

-Shrey Chaurasia 2012175

Under the guidance of: From eClerx From GIM Mr. Arjun Gopal Prof. Amiya Sahu Senior Process Manager Assistant Professor (Finance) eClerx Services Pvt. Ltd. Pune Goa Institute of Management

CERTIFICATE OF PROJECT COMPLETION

This is to certify that Mr. Shreya Chaurasia, a student of the Post Graduate Diploma in Management

(PGDM), of Goa institute of Management, Goa has completed his summer project on

“Streamlining regional differences across different Loans Processes”

The Project was successfully completed under my guidance and supervision from the 8th April, 2013 to

7th June 2013. His hard work is deeply appreciated.

I wish him all the best for the future.

Mr Arjun Gopal

Senior Process Manager - Operations

Financial Services,

eClerx Services Pvt. Ltd., Pune

i

Acknowledgements

A project such as this, with a time limit of just 9-10 weeks involves a lot of focused work from

many people, all of whom deserve a large debt of gratitude from my side. Without their help

and support this project will never have been completed.

First and foremost, I would like to thank eClerx Services Pvt. Ltd. for providing me with the

opportunity to utilize my newly gained managerial knowledge on.

I am grateful to Mr. Arjun Gopal, Senior Process Manager for leading me through every step of

the way, Mr. Salil Tamboli, Assistant Process Manager, Financial Services for all the help in

comprehending the intricacies of what is a complicated set of operations.

I am very thankful to the entire C1-Loans team who despite their very busy schedules

accommodated my requests and gave me help for the entire duration.

We are all indebted to our teachers, but especially to Prof. Amiya Sahu, for his help and

feedback on how to approach this project. He has been of utmost help with his wealth of

suggestions and quick responses.

Last but not the least, there were many without whose help it would not have been possible to

carry out this project. I take this opportunity to thank them all for providing me with valuable

information that helped me carry out this project.

Shreya Chaurasia

2012175

PGDM (2012-14)

ii

EXECUTIVE SUMMARY

Purpose of Report

eClerx Services Pvt. Ltd. offers outsourcing services in the Financial Services vertical

where in the C1 area (for a multinational bank client) Loans processing is a big service provided

with a team of more than 50 analysts.

The Pune center processes Loans portfolio from three different cities each belonging to a

separate continent. Some activities done are similar while others are varied for different cities.

Standardizing and automating said activities helps in reducing time and improving accuracy in

these activities.

In banking, the back office includes a heavyweight IT processing system that handles position

keeping, clearance, and settlement.

My project involved studying these processes, drawing up process maps, identifying redundant

activities, if any, and scope for automation. Most of the findings are based on the trends

observed from error trends in the past 6 months, and primary data from analysts working on

the processes. This report encapsulates all the possibilities in streamlining differences in

different parts of C1-Loans and making them either faster on more efficient or both.

Main Findings and Conclusions

While most of the work is done on various applications (either client driven or developed by

eClerx itself), a large portion of the repetitive work is done manually giving rise to possibility of

manual errors. Of the errors reported in the past 12 months, majority are manual errors which

can be eliminated with better process checks.

I have identified two opportunities for automation in the Mortgage servicing area (External e-

mail tracker & GRM IPD) while scope for standardization in Volume recording procedure has

been pointed out. Sample templates for all of these processes have been provided after testing.

These will provide 100% accuracy and consume less time.

Apart from these I have also come up with process level checklists for 16 separate operations

performed in the Loans and Mortgage servicing area.

iii

Table of Contents

Certificate of Project Completion i

Acknowledgements ii

Executive Summary iii

Introduction 1

About the organization 1

Key Clients 2

Business Environment 3

Project Details and Methodology 4

Details of different teams and their activities 6

Work Products 7

Comparing different regions 9

Working Procedure 9

Recurring Errors & Process Checks 10

Volume Recording Procedure 11

Findings & Recommendations 12

Process Improvement Initiatives 13

External e-mail Tracker 13

GRM IPD Automation 14

Checklists 15

Process Maps 16

References 18

Annexure –I Jargons & Their definitions 19

Annexure –II Different Softwares Used 20

Introduction

About the organization

Eclerx is a Knowledge Process Outsourcing firm (KPO) which caters to the financial services industry and offers sales and marketing support (SMS) across retail, manufacturing and travel verticals. Incorporated in 2000, eClerx Services Limited (eClerx) is providing Data Analytics and Customized Process Solutions to its global enterprise clients. eClerx supports core and complex activities for its clients using proprietary processes and a scalable offshore delivery model

eClerx is an established player with a niche service offering, which is exhibited in its higher than average Compounded Annual Growth Rate (CAGR) of 37% over the past 3 years[1].

Eclerx is a provider of Core and Critical Data based process output with a Revenue run-

rate of USD 102MM. It has 55 enterprise customers of which 28 happen to be Fortune 500

companies [2]. An ISO 27001 certified organization[3] it is the winner of Most Admired

Knowledge Enterprise (MAKE) award in 2012. Founded in the year 2000 by Mr. Anjan Malik and

Mr. PD Mundra the company has deployment centers in Mumbai and Pune while executive and

sales offices in London, New York, Austin, Dublin, Philadelphia and Singapore.

Table 1: Business Verticals of eClerx

Product/ Segment Financial Services Sales & Marketing Services

Revenue Contribution ~45% ~55%

Service offering 1. Capacity planning, business analysis and process management 2. Trade life cycle management 3. Finance and accounting 4. Risk reporting and legal contract review

1. Web and ecommerce operations support 2. Data management services and business performance reporting 3. Competitive pricing and benchmarking 4. Quality compliance and governance

Geographic Presence: Serves clients in the US, UK and Asia-Pacific with service delivery from

centers in India

1

eClerx possesses strong domain focus, niche service offering and the resultant client

stickiness. This has enabled it to grow at a much faster pace than the industry in the past and is

expected to support its future growth as well. The grade factors in the company’s ability to

maintain its growth momentum even after the bankruptcy of one of its top clients during the

economic slowdown. eClerx is well-positioned to benefit from its association with marquee

clients in the high-growth analytical services segment, which is expected to grow at a three-

year CAGR of 23%. The grade is supported by the company’s focus on using technology to

improve its internal processes. The ensuing broader employee pyramid and lower average

employee cost have helped eClerx clock industry-leading EBITDA margin and RoE. Further, a

robust knowledge management and training system enables the company to manage attrition

and abets quick deployment of billable resources.

Key Clients: eClerx gets more than 75% of its revenue from its top 5 clients which are large

global investment banks in FS vertical and Retail, Travel, Hi-Tech manufacturing and Healthcare

companies for SMS vertical. Cost pressures lead to high demand of outsourcing to these firms

and eClerx has establishes itself as a top service provider in this respect. Major Indian

2

competitors are Wipro BPO, Infosys BPO, MNC Captives( For FS) and MuSigma, Accenture,

Capegemini, Wipro BPO for SMS.

Major risk factors for eClerx are the regulatory changes in US and Europe affecting

outsourcing advances in technology which may leave some of the outsourced processes

redundant, and the inability to retain talent at reasonable cost.

Business Environment:

India is a dominant player in the Global KPO market with ~70% market share. Global KPO

industry is expected to grow to US$17bn by FY2014E from US$9bn in FY2011, representing a

CAGR of ~24% over FY2011-14E. eClerx Services Limited (eClerx) being a niche player in the KPO

industry is well positioned to benefit from the growth in the Indian KPO industry.

eClerx has reported strong top-line CAGR of ~40% over FY2008-13 driven by robust organic

growth and supported by couple of small acquisitions. Over the last five years, eClerx has

consistently delivered industry leading growth (Fig 1 next page)

Fig 1, Faster growth of eClerx than peers in FY09-12.

eClerx, like most of the IT companies in India, has maintained a very clean balance sheet with

no debt. Moreover, strong top-line growth and consistent impressive EBIT margin has enabled

the company to maintain best in class ROE in the industry and has also aided it to increase its

free cash flows every year. Further, company has regularly paid dividends to the tune of 40-50%

of reported profits over the last 3-4 years.

0%

5%

10%

15%

20%

25%

30%

35%

40%

Aditya Birla Minacs

Genepact Infosys BPO Firstsource Wipro BPO Indian KPO Industry Average

Three Year CAGR

eClerx

3

Project details and Methodology

My project is under Mr. Arjun Gopal, Senior Process Manager, Financial Services, in C1-

area (for a particular multinational bank) Loans. Loans servicing is the ongoing process of

booking and maintenance of loan portfolio in accordance with the underlying documentation .

All bookings reflect the correct positions in the bank’s books and records by the end of business

day.

The Pune center processes Loans portfolio from three different cities each belonging to a

separate continent. Some activities done are similar while others are varied for different cities.

Standardizing and automating said activities helps in reducing time and improving accuracy in

these activities. Most of the process improvements activities are in terms of automation or

shortening an existing process. Another way to improve a process is to make it more accurate

or less prone to errors.

In banking, the back office includes a heavyweight IT processing system that handles position

keeping, clearance, and settlement.

In investment firms, the back office includes the administrative functions that support the

trading of securities, including record keeping, trade confirmation, trade settlement, and

regulatory compliance, this is where eclerx provides its clients with excellent value.

Methodology: My project involves studying these processes, drawing up process maps,

identifying redundant activities, if any, and scope for automation. I will also be looking at all

KPIs and their method of reporting to see where maximum errors are.

The portfolios subject to order are maintained in client specific Loan software. All bookings are

made in this system to reflect the correct positions in the bank’s books and records by the end

of business day.

Cash team provides support by investigating the outstanding break items, preparing month-end

reports for controlling purposes, applying and kicking back un-identified funds.

Most of the loans in question are syndicated loans, where multiple lenders provide the amount

to a borrower to hedge against risk of over-exposure and one of the bank acts as an agent.

4

$

$

$

Syndicated Loans

Loans area is organized as shown below:

There are two types of syndicated loan facilities available, namely Revolve and Term loans. In

revolve facility loans, the loan amount is fixed and that committed amount is kept for the

borrower but all the amount isn’t taken at once rather according to requirement parts of the

Lender 2

Lender 3

Agent Borrower

C1-Loans

European City American City Loans 2012- Collection of other

processes

Mortgage servicing

Par Closing EU

Letter of Credit

Loan servicing &

Booking

Cash reconciliation

& investigation

Agency- Loans where

our client is the agent

Loan servicing &

Booking

Cash reconciliation

& investigation

Lender 1

Par Closing NA

Utilities Team

Asia Pacific Loans

5

committed amount are withdrawn from the lenders. Such loans can be based on LIBOR or a

base rate as agreed on a credit agreement. Changes in the rate or swap between LIBOR to base

rate or vice versa are possible.

In term loans, the entire committed amount is transferred to the borrower at the time of

drafting of the credit agreement and the loan is amortized over a fixed period.

Details of different teams and their activities are:

LC: Letter of Credit is like a guarantee where if a lender is not able to provide funds to a

borrower, the borrower can draw upon the LC and the issuing bank will need to provide the

amount covered under the contract. The borrower has to pay an LC fee for opening and

maintaining a Letter of Credit.

eClerx also generates reports to check any LCs which are no longer valid are up for renewal.

Utilities team builds and maintains customer accounts and ensures that correct remittance

instructions are added in the Loan Software. This team also does the initial Know-Your-

Customer (KYC) and Anti-Money Laundering (AML) checks for all new accounts. For the

residential, commercial and collateral functions, eClerx prepares daily, weekly and monthly

reports to ensure that cashflows coming in and going out match with the client’s internal

systems.

MSMS team works to maintain the loans portfolio for mortgage services in accordance with the

underlying documentation. Deals are maintained in various spreadsheets and also booked in

the Loan software. All relevant details are updated in separate spreadsheets maintained for

each quarterly loan accrual cycle. Various receivables and payables are also executed.

Par Closing team is responsible for monitoring the daily trade closing tracker. Team reviews the

closing packs received via e-mail and then update the relevant details in Loan Software, thus

effectively enriching the trade circles in the software.

Agency (Servicing & Trade NY) team acts in loans where our client is the agent (Syndicated and

Bilateral deals). The servicing function processes activities like repricing, drawdowns,

paydowns, interest and principal payment. Instead of receiving notices, this team sends out

notices regarding deals.

Note: The Loan software is a third party software application used to process transactions in

commercial lending business by the client. It is used to manage all lending transactions from a

single platform where all loan modules are integrated and share the same database.

6

Work Products

Sr No. Activity Input Output

1 Drawdown Client Share, Rates, Effective date Funds released to the borrower

2 Rollover Client Share, Rates, Rollover date

Loans and facility rolled over to the next date

3 Interest Client Share, Effective Date Interest payments added to facility details

4 Paydown Client Share, Effective Date Principal payments added to facility details

5 Fees Payment accruals, cash taken in Fees payments added to facility details

6 TAPs account & Wires Data in an e-mail Account credited/ Wire built

7 LC Letters & Reports Information received from controls team/ reports, raw excel files

LCs drafted, Reports generated.

8 Trades to be booked in Loans Software

Excel sheets downloaded which shows the number of deals to be executed on a particular day

Sheet updated & sent to client

All trades booked in Loans software.

7

Comparing Different regions

The comparison has been done on few factors

1. Working Procedure

2. Recurring errors and Process checks against them

3. Volume recording Procedure.

Working Procedure:

Europe & Asia Pacific: This team handles smaller volumes of process requests than North America. They

use the Workflow Tool. This is an application developed by eClerx for loans processing in 2010.

All the process requests (Scheduled and Unscheduled) are uploaded on it, and team leader assigns

every team member activities to be performed. Status for each request is visible on it. No request

passes through to the client before it is audited by another team member after being processed. This

100% internal auditing helps ensure that very few errors are passed onto the clients. All details

regarding each deal and the analyst who processed it can be drawn from this application.

North America: This team handles much larger volumes of process requests than Europe team (5833 Vs.

1347 in May 2013). The work flow tool fails on such large volumes. So this team saves all process

request faxes (Sent as scanned copies) on a network folder. Any member on the team is free to process

any of these notices. After processing these notices are saved on a separate folder marked DONE. After

this the team member goes on a spreadsheet and enters the details of the deal processed (Currency,

Company name, Agent Bank Name, His/Her own name etc) manually. There is no internal audit

performed.

Recurring Errors:

List of recurring errors in the European region:

1. Cash flow off by more than threshold.

2. Processed with incorrect effective date.

3. Incorrect rate for Credit Default Swap pricing change.

4. Selecting the Wrong borrower.

5. Matloc commentary not updated.

6. Borrowing/Drawdown processed past cut-off

7. Request not processed/escalated.

8

Looking at the repeated errors, while most are manual errors, the bottom two can be improved by

better process checks to ensure that all requests are processed within the given timeline.

Process checks:

Most of the KPIs demand servicing accuracy, Cash reconciliation accuracy of 99.5% or higher, But there

are two KPIs which are spelled out as the number of drawdowns missed/processed past cut off (within 1

Hrs of receiving the request) as absolute numbers and Number of Unscheduled activities not performed

within 2 hrs of receiving the request. Rigorous process checks are required to ensure such high accuracy

but also fast enough so that such deadlines are met.

Process checks for Europe region

Activity Mode of check Frequency Person responsible Drawdown Mail is sent Every 1 Hr Servicing Analyst

WIP Filters in application Screenshot is sent Every 2 Hr APM

Matloc Comments Mail is sent Daily EOD Analyst

Scheduled Activity Roster and Loans Software matching

Mail is sent Daily APM

Suspense Funds Mail is sent Every 2 Hr Cash Team

PDIF Comments update Mail is sent Daily Cash Team

On testing the accuracy of these process checks, I analyzed the drawdown mails (Because they are

directly defined in a KPI). The process check was instituted from 6th March, 2013. So, by 3rd June, 2013

63 working days had passed.

The expected number of hourly drawdown update mails = 63*8=504

Actual number of hourly drawdown update mails sent = 328.

Fig 2, Number of Drawdown update mails every day.

1

3

6

13

11

15

76

1

0

2

4

6

8

10

12

14

16

1 2 3 4 5 6 7 8 9

Drawdown update mails

Number of mails sent in a day

No. of days

9

Clearly this shows that drawdown update mails are quite often missed increasing the possibility of a

missed drawdown request.

List of recurring errors in the North America region:

1. Cash flow off by more than threshold.

2. Processed with incorrect effective date.

3. Incorrect rate for Credit Default Swap pricing change.

4. Matloc commentary not updated.

5. Fax incorrectly saved.

6. Borrowing/Drawdown processed past cut-off

7. Unscheduled activity not processed.

Clearly the bottom three can be improved by better process checks.

Process checks for NA Region.

Since this team doesn’t use Work flow tool, Scheduled activity Roster contains only those activities that

are lined up at the start of the day. Unscheduled activities are simply not entered in the SAR.

Similar to Europe Drawdown mails are sent every hour and a single checklist is sent every 4 hours that

contains all the below mentioned items

Auditor Komal

Drawdown mails sent Y

SAR & Loans Software comparison Y

Matloc comments Y

Weekly cash report NA

PDIF Comments WIP

All Faxes renamed Y

WIP Filters in Loans Software WIP

As pointed out in the boxes, these process checks are still letting a few errors reach the clients. Since

there is no internal audit done, there exists a larger chance of errors being passed on to the clients.

Unscheduled Activities?

Recurring Errors

10

Volume Recording:

Different teams use different ways to record the volumes of requests processed. This raw data is then

used to prepare many reports like Resource utilization, Productivity and accuracy reports.

Mortgage servicing uses a spreadsheet template where every member of the team inputs their

daily volumes (Just the number of requests processed, no details). The formula then used is

Quantity X Average Handling time = Resource Utilization

Loans Europe team use an extract out of the Work Flow tool to get the details. A pivot table is

then drawn from that data to do all the calculations.

Cash teams of both Europe and NA use similar templates for recording the volumes of activities

performed. Most of it is done manually but the final calculation is automated.

Loans NA uses the most cumbersome procedure. After every process request being executed

the analyst opens a spreadsheet where he/she manually enters all the details of the deal. This

setup provides good details for Deal-Analyst mapping, so that when an error is reported the

analyst can be traced back. However, this isn’t a customer requirement.

As is clearly visible, every team does this differently and there exists no standardization.

11

Findings and Recommendations:

Drawdown reminder mails have been ineffective in ensuring timely drawdown processing. I

believe the reason behind this is the shared responsibility between the entire team. Cash team

assigns people responsible for Suspense funds mail every day and they haven’t missed a single

mail. Similarly, the mails sent by APM for WIP filters have been prompt as well. Hence I

recommend that this check should be performed by the APM shared with one senior analyst to

check every 40-45 minutes the status of open drawdown requests and send a mail.

Unscheduled activity request (especially same day processing requests) are not added in the

SAR but saved in the folder to be processed by the NA team just like the scheduled activity

request notices. The major reason behind missing unscheduled activities is that they either are

just not saved (14 out of 37 times in the past 12 months) or saved in the wrong date folder (23

out of 37 times).

A check can be instituted to count the number of request mails in the shared mailbox and

compared against the shared folder on the network (Sum of processed & yet to be processed

notices). If they don’t match, some unscheduled notice has been missed or saved in some wrong

folder.

Faxes are named according to the deals and their codes by manually typing. This being tedious

work obviously incites errors. In Europe, most of this is annulled by internal audit but no such

thing is performed in NA region. I recommend, random audits (1 every 15-20 mins or 1 out of

every 20 faxes). This will not provide 100% accuracy but may prevent some errors and the time

for this will be provided by the new volume recording template that has been recommended.

A sample template for Volume and then RU, productivity calculations has been prepared. It only

needs the volume of activities processed as input (not details). All the other calculations have

been automated. The RU & productivity reports will be automatically generated. This will lose

the deal-analyst mapping. However, right now that data isn’t being utilized.

There exists however, a scope for manipulation of inputs by analysts. But, daily checks at EOD

against actual volumes processed can protect from such behavior.

Process improvement initiatives:

1. External e-mail Tracker : Due to the large volume of e-mail communications with clients,

agents, control and agency teams. eClerx has a system of manually tracking all external e-mails

sent on a spreadsheet so that erroneous ones(Containing wrong calculation or details can be

tracked) which also contain the auditors name.

Right now this tracker is being updated manually, which apart from being slow is also inefficient

because there is still the possibility that an external mail might be sent without logging in this

tracker.

I have prepared a template which will take data from outlook sent folders of team members(

simple Copy-Paste) and then an already applied formula will indicate the external e-mails. This

template will also register the age(in days) of mails, which can be used for chasing (regarding

funds) different borrowers or agents as this activity has varied protocols based on the number

of days of delayed payments.

Apart from reducing efforts this will also make sure there are no missed external mails.

This is sample of that template is filled with dummy data. But the nature and age aspects of the

template are visible. Chasers are certain mails sent to external parties asking them for funds.

There are different protocols for different number of days. Such a format will identify different

stages in such chasers.

2. Mortgage servicing team receives funds from its deals on different days but to prepare a

quarterly report (GRM IPD) the file downloaded has a look as shown below

S. No. Deal Name Agent Mnemonic Amount Status Instruction

1 Imperial CB7C 3,421.00 Cancelled Pay Cash

2 Gnessstac CBIK 5,879,345 Settled Receive Cash

3 Royal IFTG 45,876.21 Settled Pay Cash

4 Benndars CZAR 32,789.59 Settled Pay Cash

5 Ghorrynnd CMO8 4,971.48 Cancelled Pay Cash

6 NJPP CBMT 11,987,340 Settled Receive Cash

7 JPNB CVHF 1,832,764.43 Settled Pay Cash

Each Agent Mnemonic is repeated multiple times over a few thousand rows. Analysts have to

use sort in Excel to find for each Agent the sum of amount column for just the settled

transaction and then take the difference between pay and receive cash. Manually doing this

takes a lot of time.

I have introduced an automatic way of doing this by using SUMIFS() formula in excel. This

automation is another effort saving measure. It will save about 40-50 minutes every month. It

has been tested against last month’s numbers and was 100% accurate.

3. For the next step, I have prepared checklists for various activities across all processes in

Global loans servicing because there exists a knowledge gap among different team members

(there exists a high attrition rate). There are always some new team members. These are not

very detailed checklists (Called click-level checklists) but rather short overview type of

checklists, which point out what should be done, and before each step what should be checked.

These can be uploaded on the WF tool and each step checked while being performed. This kind

of checklist brings uniformity in working procedure and avoids mistakes.

The titles of checklists are

Audit request checklist, Creating scheduled SAFE mission Checklist, Interest payment checklist,

IPD Spreadsheet rollover checklist, Repricing checklist etc. The working procedure however, is

confidential so they can’t be shown here.

Process Maps:

1. Loans servicing:

Leader

Analyst

eClerx

Auditor

Client Auditor

Administrator to select

comment from dropdown and

transaction

Browse & create

hyperlink to the notice

Yes Activity to

be

processed?

?

Analyst to create the

Scheduled/unscheduled activity

on receiving the notice

Team lead generates

Scheduled Activity Report

from Loans software

Is analyst

able to

process the

activity?

Select status as ‘Approved & released’

Yes

Select status as ‘needs approval’

Activity to appear on client auditor screen

No Is the processed

activity correct?

Out of scope

No processing required

Administrator to process the activity

& select ‘Yes’ and ‘Transaction

processed’ and activity appears on

auditor’s screen

15

2. Mortgage Servicing

Calculate the interest for all participants

Check the rent account to see if there are

enough funds?

Notify the Asset

Management Team

Is

Rent>Interest

Payable?

Yes No

Notify the Borrower Asset

management team to pay

the difference to rent

account.

Interest passed onto Tranching Account

If R-I>0, surplus is returned

Distribute interest payments to

junior lenders

References.

1. http://en.wikipedia.org/wiki/Back_office 2. Independent Equity Research – eClerx Pvt. Ltd. by CRISIL Research 2012-13 3. eClerx –Initiating Coeverage – 2013 report by Reliance securities 4. http://www.indianotes.com/buy/eClerx-Services-Q4FY13-32-revenue-growth/182512/13240056.00/C

5. All the processes and related data has been what I have observed while at eClerx Pvt. Ltd.

Annexure - I

Meanings of some jargon:

Trade/Ticket: A business transaction where a lender buys into/increases exposure or sells

out/reduces exposure to a syndicated loan. Thus such deals and lender’s position in them are

actively traded.

Paydown: Part/full payment of a loan

Drawdown: Creating a new loan under existing facility, sending out funds to borrower.

Repricing: Pricing loan and related payments on new LIBOR as per credit agreement

Commitment: The committed amount earmarked for a particular loan to a borrower

irrespective of when they are released to the borrower. It signifies the maximum borrowing

limit for the borrower.

Conversion: Converting a LIBOR to base-rate loan or vice-versa.

Swap: Financial instruments for converting a fixed rate loan into a fixed rate loan or vice versa.

Tranching account: An intermediary bank account for channeling funds to all lenders when

payment is received from borrower, due to different syndicate participants in a syndicated

loan.

Annexure -II

Different softwares used

Loans Software: It is a deal processing system. It is a front-to-back commercial loan processing

system that covers all stages of a loan. It transforms the complexities within the loan cycle into

a streamlined controlled process and provides the client visibility into loan cycles.

Settlement Software: It is an application which delivers real time information related to

settlements. Manual settlements of unapplied funds against open receives is done in it.

Investigation of unexpected funds or clearing of unsettled transactions is done by the cash

team on this application

Cash Software: It is the cash reconciliation system used to reconcile external correspondent

bank statements against internal ledger postings. All Loan software cash flows will be processed

through this software. It is software where manual matching of statements Vs. Ledgers is done.

Kickback of unidentified funds is also done on this application.