In a structured finance business scenario, your bank may encounter a situation wherein you agree upon a commitment and allow the customer to borrow/repay any amount any number of times within a pre-defined period. At the end of the period, you can consolidate the unsettled loans into a single loan and agree upon a payment schedule. This is referred to as Lock-in. Till the lock-in takes place, the unsettled amount as of a given date is not predictable as the customer might return a loan or borrow an additional amount. Therefore, Oracle Lending uses only the Straight-line method of accrual for such contracts. However, after lockin takes place, you can instruct the system to accrue the fee amount based on yield basis method.

If you want to change the method of accrual from Straight-line method to Yield Basis method after lock-in, it is advisable to transfer the fee amount from the commitment contract to the loan contract. This is because, in Oracle Lending, status control is available only for loans. If you want to track the fee amount (that is if you do not want status control), you can change the accrual method to yield basis for the commitment contract only and the system accordingly accrue the fee amount based on yield basis method.