Variance Rate Cap RATE- VARIANCE is a UDF defined for commitment products. This represents the maximum rate change (both upper and lower limit) for contracts processed under the commitment product.

You need to perform dual authorization, if the UDF RATE-VARIANCE is maintained as a non-zero value for commitment or commitment linked to the loan contract for any of the following operations:

• Commitment contract booking/amendment During commitment contract amendment, if the above UDF value is modified (zero to non-zero, non-zero to zero, or original value is changed) an override is displayed for dual authorization.
• Loan contract booking During loan contract amendment, no override is displayed for dual authorization as the variance rate cap maintenance is done only at commitment level.
• Manually changing rate or spread for commitment/loan contracts in the following scenarios:
  • Rate changed for fixed rate contracts through Value Dated Amendment (VAMI) screen.
  • Rate code changed for floating rate contracts through VAMI screen.
  • Spread changed for fixed and floating rate contracts through VAMI screen.
• Re-pricing of loan contracts in the following scenarios:
  • Consolidation Re-price
  • Split Re-price

If any of the before mentioned operations are performed, the system displays the following override message:

Variance rate cap <value> is maintained for this contract, dual authorization required.

If the override is selected as Yes, the contract is saved for further processing. If the override is selected as No, the save operation fails.

Once the contract is saved successfully, the contract reference number with override details appears in the dual authorization screen for the first authorization.

Once the contract is authorized in the dual authorization screen, final authorization is done.

• Relaxing Dual Authorization