1. Bilateral Loans
  2. Disbursing a Loan
  3. Booking Re-Price Transactions
  4. Child Re-Price Transaction (Split)
  5. Product Components

4.28.1.2 Product Components

In the Product Components section, specify the following:

Table 4-43 Product Components

Field Description
Component Select the component to be associated with the child contract. The option list includes all the components linked to the product.
Rate Type Select the rate type of the component.
Rate Code Usage The system defaults the rate code usage from the product. You are not allowed to amend it. The possible values are periodic and automatic. It is applicable only for floating rate.
Rate Revision Method Select the rate revision method from the drop down list. You are allowed to amend it for Floating Periodic type of loans.

For more information on rate revision schedules, refer Maintaining Rate Revision Schedules chapter.

Reset Tenor The tenor of the parent contract is defaulted here, for the child contract. You can change the same.
Rate Code Select a rate code to be applied to the child contract.
Base Rate The base rate for the child contract is displayed here.
Spread Enter the spread for the contract.
Final Rate The final rate is computed by the system based on the base rate and the spread you have entered. This is applied to the component.
Special Rate Type System defaults the maintenance done for Special Rate Type in the Interest Limits Maintenance screen. However, you can edit this value and select the special rate type from the adjoining drop-down list. This list displays the following values:
  • Fixed Rate
  • Flat Amount
Rate Fixing Required Select this check box to indicate whether the rate fixing is applicable for a particular component.
Rate Fixing Days The rate fixing days gets defaulted from the Rate Fixing Days Maintenance screen. You can modify this value.
Rate Basis This value gets defaulted from the ‘Interest Class Maintenance’ screen. If required, you can modify the value. You can select the options.
  • Per Month – This option is used for fixed per month rate.
  • Per Annum/Not Applicable – This option is used for annual rate input. The value input is considered as resolved rate.
  • Quote Basis – This option is used for float rate input for all quote basis.
Specifying Interest Rate Rounding Components The Rate Rounding Rule, Rate Rounding Unit, and Rate Rounding Position values get defaulted from Interest Limits Detail screen. If required, you can change these values.
Remarks You can enter remarks for the split transaction you have entered, in the space provided.

Note:

  • When you enter a future dated re-pricing transaction, the system does not process any event (such as accrual, liquidation which has an effect on the outstanding balance of the parent contract) linked to the parent contract, till the re-pricing has been completed. Child contracts are created on the value date and not on the date that you enter the contract. Accounting entries are passed on the value date.
  • Re-pricing does not have any effect on a revolving commitment linked to the parent contract
  • Advices to customers involved in child contracts, are sent from the parent contract
  • MIS details of the parent contract are propagated to all child contracts
  • When renewing a contract with non-performing status, all the child contracts created inherits the non-performing status of the parent contract with the contra balance and reserve amount applicable for the parent contract being distributed among the child contracts. In case of multiple child contracts, the contra balance (and reserve amounts where applicable) is calculated based on the outstanding for each child contract and in the order in which the child contracts were created during the renewal/re-pricing.
  • For a split re-price of non-performing loan with reserve and contra amounts, first the reserve amount is apportioned based on principal outstanding for each child contract, then the contra amount.

Parent topic: Child Re-Price Transaction (Split)