Booking Re-Price Transactions

4.29 Booking Re-Price Transactions

You have the option of re-pricing fixed rate contracts to floating rate contracts and vice-versa. When you enter a contract under a product that allows re-pricing, (for which you have selected the Reprice Product check box in the Loans and Deposits – Product Preferences screen) you have to do using the Re-price Transaction screens. Such products are not available for contract booking through the Loan and Commitment - Contract Input screen.

Note:

You cannot carry out a re-pricing (splitting) and a consolidation simultaneously.

When you re-price a contract, the amount is taken from the parent contract into the Re-Price Suspense GL that you have specified in the Preference screen (Branch Parameters – Detail View).

The status of the parent contract remains Active if there are outstanding dues. The parent contract is liquidated if both principal and interest dues are completely settled.You can reprice a transaction (or part amount) into a new transaction or multiple transactions through the Renewal or Split Detail screen. You can also renew non-performing loans using this 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 split reprice, the system posts the adjustment entries in BADJ event.

Specify the User ID and Password, and login to Homepage.

On the homepage, type OLDREPRS and click next arrow.
The Renewal or Split Detail screen is displayed.

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

Figure 4-37 Renewal or Split Detail

Description of "Figure 4-37 Renewal or Split Detail"

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

Table 4-41 Renewal or Split Details

Fields	Description
Contract Ref. No.	Select or enter the reference number of the contract to be re-priced. When you enter the reference number, the following details are displayed for the parent contract: User Reference Number Counterparty Currency Outstanding principal amount The Split Serial No. gives you the number of split transactions carried out on the parent contract till date. Note: Only those contracts with no overdue schedules can be re-priced.
Product	The product code linked to the contract reference number is displayed here.
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.
Liquidate Principal and Interest	Select this box to indicate the outstanding principal or interest amount is to be liquidated for the parent contract at the time of re-pricing. Note: This check box is selected by the system if the total amount of the child contracts is greater than the outstanding principal balance.
Capitalize Interest	Select this check box to indicate if the interest due has to be capitalized to the child contract. Capitalization of Interest including the overdue interest is calculated into the child contract on the maturity date. Note: If Capitalization of Interest is applicable, then Transfer Parent Main Interest and Liquidate principal & Interest is not applicable. Capitalization of interest is allowed in case of single split reprice (One to One) only.
Prepayment Schedule Processing	Indicate the type of payment schedule processing that you want to maintain. You can select one of the following options: FIFO LIFO

Yo can also specify the following details in this screen.

Transfer Unamortized Fee (FAS91 Accrual)

Select this check box to transfer the unamortized fee of the contract to child contract. The amount is amortized over the tenor of the child contract. Amortization starts from EOD of the Application date.

During the transfer, system checks if the unamortized fee component has selected for both Discount Accrual and Apply for Re-price before transferring the amount from parent contract to child. An error message throws up otherwise and system does not save the transaction.

The unamortized amount which is available for transferring gets displayed in the Unamortized FAS91 Fee field. Discount accrual for the transferred amount is impacted as per the child contract.

During Reprice transaction, SPTI event is triggered in the parent contract.

Accounting Role	Dr. / Cr.	Amount Tag
EIMDISC_PARENT_RIA	Dr.	EIMDISC_TRFR
Wash Account GL	Cr.	EIMDISC_TRFR

The entries triggered for fee as part of INIT in the child contract for inheriting the unamortized fee are given below:

Accounting Role	Dr. / Cr.	Amount Tag
Wash Account GL	Dr.	Component_TRIN
EIMDISC_CHILD_RIA	Cr.	Component_TRIN

Note:

Discounted Accrual is applicable only for Fixed Maturity type of Loans.
Discount Accrual is applicable only for Advance type of User Input fees.
In case of split reprice to many contracts, partial reprice or merge reprice, transfer of fees is not allowed.
The transfer of fees accrued based on Yield Accrual is for the whole contract and not at the component level.
If a child contract has inherited a discount accrual component and it itself has a discount accrual component, then a subsequent liquidation of the fees impacts the total yield accrual.
For calculating the IRR, the main interest component, principal and fee (if marked for discount accrual) are to be considered as Cash flow.

Transfer of Unamortized Fee (Straight Line Method)

The system displays the unamortized fee amount which is accrued based on the straight line method. The system triggers the event SPTI as part of re-price in the parent contract. The system posts only the accounting entries for the transferred of unamortized fee from parent to child contract:

Accounting Role	Dr. / Cr.	Amount Tag
ComponentPARENT_RIA	Dr.	Component_TRFR
Wash Account GL	Cr.	Component_TRFR

The following are the entries triggered for fee as part of INIT in the child contract for inheriting the unamortized fee are:

Accounting Role	Dr. / Cr.	Amount Tag
Wash Account GL	Dr.	Component_TRIN
ComponentCHILD_RIA	Cr.	Component_TRIN

Note:

Component PARENT refers to each component available at the Parent Product.
Component CHILD refers to the components which have Apply for reprice flag selected at the child product level.

Parent topic: Disbursing a Loan