1. Bilateral Loans
  2. Disbursing a Loan
  3. Consolidating Re-Price Transactions

4.30 Consolidating Re-Price Transactions

You can consolidate one or more re-priced child contracts with a parent contract. This includes non-performing loans as well; however, it is essential that all the child contracts being merged have the same user-defined status. The consolidation can be done through the Re- Price Transaction (Consolidation Details) screen.

Note:

You can do reprice in this screen for non-bearing products only when Allow schedules for discounted check box is selected at the contract level. As part of consol reprice, the system posts the adjustment entries in BADJ event.

For parent contract, you need to select Allow schedules for discounted whereas for child contract can be either normal discounted or true discounted contracts.

Specify the User ID and Password, and login to Homepage.
  1. On the homepage, type OLDREPRC and click next arrow.
    The Consolidate Details screen is displayed.

    Note:

    The fields which are marked in asterisk red are mandatory fields.

    Figure 4-38 Consolidate Details


    Description of Figure 4-38 follows
    Description of "Figure 4-38 Consolidate Details"

  2. You can enter below details in this screen. For information on fields, refer to the field description table.

    Table 4-45 Consolidate Details

    Field Description
    Contract Ref. No. Select or enter the reference number of the contract with which various child contracts are being consolidated. When you enter the reference number, the following details are displayed for the parent contract:
    • User Reference Number
    • Counterparty
    • Currency
    • Outstanding principal amount
    The Merger Serial No. gives you the number of merger transactions carried out on the parent contract.
    Book Date This is the book date with which the re-pricing is processed.
    Value Date This is the value date with which the re-pricing is processed.
    In the Child Re-Price Transaction (Consolidation) section, you can enter details of the child contracts. Specify the following:

    Table 4-46 Child Re-Price Transaction (Consolidation)

    Field Description
    Contract Ref. No. Select the reference number of the child contract which is merged with the parent contract.

    Note:

    • The child contracts being merged should have the same maturity date and this date should be lesser than the maturity date of the parent contract.
    • For a consolidation, it is mandatory that the underlying commitments of a child contract are the same as that of the parent contract.
    • If there is an overdue schedule linked with a child contract, the system does not include the same during the merger.
    User Ref. No. The user reference number of the child contract is displayed here.
    Value Date The value date of the child contract is displayed here. This also the maturity date of the child contract.

    Note:

    For reprice consolidation, child contract is consolidated and available for consolidation on maturity date of child contract that is, Value date of reprice consolidation should be same as maturity date of child contracts.
    Amount The amount of the child contract which is re-priced and consolidated with the parent contract, is displayed here. This is the outstanding principal amount of the child contract. You are not allowed to change the same.
    Currency The currency of the child contract is displayed here. Only those child contracts with the same currency as the parent contract can be merged with the parent contract.

    Note:

    • When you enter a future dated re-pricing transaction, the system does not process any event (such as accrual, liquidation) linked to the child contract, till the re-pricing has been completed. The consolidation is done on the value date and not on the date that you enter the contract. Accounting entries are passed on the value date.
    • You are allowed to enter a back-value dated consolidation transaction.
    • Interest liquidation can happen on all child contracts before consolidation. You can only merge the outstanding principal amount with a parent contract. The principal amount is moved to the Re-Price Suspense GL you have specified. The interest amount of a child contract is adjusted with the customer involved in the child contract.
    Remarks You can enter remarks for the consolidation transaction you have entered, in the space provided.

    Note:

    • You cannot carry out a re-pricing (splitting) and a consolidation simultaneously.
    • The contra amounts (and the reserve amounts, if applicable) for the child loans is merged and made part of the parent loan, when you merge child contracts.
    • If the UDF RATE-VARIANCE is maintained as a non-zero value for a commitment contract to which the loan is linked, dual authorization is required.
    For more information, refer to Dual Authorization topic in this User Manual.

Parent topic: Disbursing a Loan