... once upon a time ... a long long time ago ...

Small satchets of happenings from pockets of my life, as lapses of memories rewind to the particular place, moment and time ... realities of life
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Friday, May 23, 2008

Banking was Manual (Month-End Interest Calculation)

The busiest day in the Current Account Department (in a branch) is the last day of the month. One of the important task to do was to calculate monthly interest and get it debited (there was no such thing as a 'credit interest' then), to the account. All Current Account Department staff are aware of this and it is expected that we have no other plans, except to 'slave' for the bank, especially for the night. But the 'overtime money' is good!

As the last day of the month may also be a working operational day, we must take through the normal process of serving customers, postings to ledgers, balancing and closing for the day. When all the day's operation is done, we will then start to calculate interest that is to be charged to our borrowing customers. Interest calculation is done by all designated staff, "manually". First we convert the monthly interest rate into a 'interest factor', by getting the sum of the interest rate calculated against the number of days in the month. This is cutting short the 'constant' multiplying and dividing for all accounts to be calculated. Manually, based on the operation postings on the ledger card, we add the 'daily amount outstanding' in each account and a 'product' is derived - depending on the amount and number of days it remained in the 'red'. The product is then multiplied to the 'interest factor' which will give you the 'interest chargeable' for the month. All these calculation is done on the adding machine with rollers. There is an 'Interest Calculating Machine' - where you turned the knob to get the product total, depending on the number of days and what amount the account stays in the 'red' (still manually handled). The calculated figures with the 'calculated interest' printed are torn out of the adding machine and stapled to the respective 'ledger card'. An officer will go through each and every one ledger card account with the calculated interest and if found to be correct, will authorised it for posting into the individual account.

Painstakingly, the respective clerical staff handling the respective 'ledger' will then post the respective interest chargeable into the respective account. Once all individual interest amount have been posted, the individual ledger cards will have to be summed up again and balanced against the total sum of the calculated interest to ensure that interest posted are of the correct amount and it is posted into the correct account. If it takes too long, we can have KFC dinner (the only fast food restaurant then) or supper before coming back to continue our job into the wee hours of the morning.

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