TEMENOS T24
Islamic Banking
User Guide
Qard Hassan
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Qard Hassan
Table of Contents
Preface ...................................................................................................................................... 3
Overview ................................................................................................................................... 3
Prerequisites............................................................................................................................. 3
Getting Started ......................................................................................................................... 4
Qard Hassan – With Schedule........................................................................................ 4
Qard Hassan – Bullet payment ....................................................................................... 5
Qard Hassan – Customer Payment ............................................................................... 6
Amend – Qard Hassan Finance Contract ..................................................................... 6
Qard Hassan – Early Maturity ......................................................................................... 7
Enquires .................................................................................................................................... 8
Limits ......................................................................................................................................... 8
Delivery ..................................................................................................................................... 8
Services..................................................................................................................................... 8
Accounting Process................................................................................................................. 8
Troubleshooting ....................................................................................................................... 9
Glossary .................................................................................................................................... 9
Index .......................................................................................................................................... 9
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Qard Hassan
Preface
The scope of the user guide is to explain the functionalities/ workflow for Qard Hassan.
The reader needs to have the basic understanding in Islamic banking.
T24 - LD.LOANS.AND.DEPOSITS and T24 – Past due applications
Overview
Qard Hassan is a contract involving a finance with two parties on the basis of social
welfare. It also can fulfil a short-term need of the borrower. During the finance process,
the repayment amount must be the same as the amount borrowed. This means no
profit or riba must be applied to the finance contract.
The purpose of Qard Hassan is to
Help the needy fellow people, neighbours or families.
Establish better relationship among poor and the rich.
Mobilize wealth among all people in the society.
Facilitate the poor to create new jobs and business ventures by using their
merits, skills and expertise.
Reduce unemployment and poverty from society.
Reduce social and economic inequality.
Prerequisites
Product Type - IS.H.PRODUCT.TYPES, ISB
The description of the product is pre-defined as shown below.
Products - IS.H.PRODUCTS, ISB
The basic product parameters are pre-defined as shown below. Category can be
changed by the bank if required.
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Qard Hassan
Getting Started
Qard Hassan menu structure is displayed below.
Qard Hassan finance can be disbursed to the Customer by booking finance contract,
the repayments from customer can be scheduled or bullet type.
Qard Hassan – With Schedule
In the Transaction input screen, user has to input the Customer number, Amount, Value
date and Maturity date. The repayment account number is getting populated
automatically. If required user can modify the populated account number. While
committing the transaction it will allow the user to define the repayment schedules.
User can define the “Principal” repayment dates and amount.
If the finance is booked for Top-up purpose it can be done by providing details into the
Top up details tab. By default it will be set as “Fresh finance”. If required it can be set
as “Buy out” or “Refinance/ Top up”. If the financing type is set as “Refinance/ Top up”
then Old finance reference number needs to be inputted/ selected.
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Qard Hassan
User has to commit and authorize the sale transaction.
During authorization the below accounting entries are generated.
DR Qard Hassan Receivable
CR Customer Account/ Top up Refinance Account
Qard Hassan – Bullet payment
In the Transaction input screen, user has to input the Customer number, Amount, Value
date and Maturity date. The repayment account number is getting populated
automatically. If required user can modify the populated account number. There is no
need define the repayment schedules and it will be setup automatically for the Maturity
date as Bullet payment.
If the finance is booked for Top-up purpose it can be done by providing details into the
Top up details tab. By default it will be set as “Fresh finance”. If required it can be set
as “Buy out” or “Refinance/ Top up”. If the financing type is set as “Refinance/ Top up”
then Old finance reference number needs to be inputted.
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Qard Hassan
User has to commit and authorize the sale transaction.
During authorization the below accounting entries are generated.
DR Qard Hassan Receivable
CR Customer Account/ Top up refinance Account
Qard Hassan – Customer Payment
The purchase amount is transferred to the customer account by using this screen. It is
used for Refinance/ Top up finance contracts to disburse the Top up amount. User has
to input the customer number and asset purchase reference number. The debit
account number and payment amount are populated in the relevant fields. User can
make changes to the payment amount defaulted from the purchase contract. It can be
decreased and may be paid in more than one transaction. However it cannot be
increased more than what defined in the purchase contract.
During authorization below accounting entries are generated.
DR Top up Refinance Account
CR Customer account
Amend – Qard Hassan Finance Contract
It is possible to do below amendments to the Qard finance contract.
1) Maturity date change
2) Amend settlement account
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Qard Hassan
3) Early maturity
Maturity date change
User has to use the Transaction input screen and input the Finance contract reference
number. It will automatically populate values to the relevant fields. User can modify the
maturity date and re-input the new maturity date. The repayment schedule dates can
be amended if required.
Amend settlement account
User has to use the Transaction input screen and input the Finance contract reference
number. It will automatically populate values to the relevant fields. User can navigate
to this screen and modify the Principal, profit liquidation accounts.
Early maturity
User has to use the Transaction input screen and input the Finance contract reference
number. It will automatically populate values to the relevant fields. Maturity date can
be changed to Today’s date. During authorization the below accounting entries are
generated.
DR Customer Account
CR Qard Hassan Receivable
Qard Hassan – Early Maturity
This is mainly for performing early maturity of the old finance that was part of the re-
finance contract created.
User has to commit and authorize the early maturity transaction.
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Qard Hassan
Enquires
Not Applicable
Limits
Limits are not applicable for Qard Hassan Finance contracts.
Delivery
Refer to DELIVERY user guide for more information about delivery setup.
Services
Not Applicable
Accounting Process
Finance Contract
DR Qard Hassan Receivable
CR Customer Account/ Top up refinance Account
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Qard Hassan
Early Maturity
DR Customer Account
CR Qard Hassan Receivable
Troubleshooting
Not Applicable
Glossary
………..
Index
...............
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