A commitment is initiated through the Contract On-line screens. Through the Contract Details screen, you have to specify the following:
- Counterparty (customer)
- Currency
- Credit line
- Amount
- Settlement Account
- Maturity Date (fixed)
- Tenor
While booking or amending a commitment, if the UDF
RATE-VARIANCE is maintained as a non-zero value for the commitment contract, dual authorization is required.
For more information about dual authorization, refer to Dual Authorization topic in this manual.
Through the Contract Schedules screen, you have to specify the type of the commitment. A commitment can be:
- Revolving or
- Non-revolving
Revolving
In a revolving type of commitment, the amount available is
reinstated whenever there is a payment against a loan linked to it.
Non Revolving
In a revolving type of commitment, the amount repaid
against a loan is not reinstated.
Through this screen, you can also indicate whether
the status movement (aging analysis) has to be done automatically or manually for
the commitment.
You can convert the existing revolving commitment contract to
non revolving commitment (Term commitment) contract using, Revolving to
Non-Revolving Term Conversion screen.
You can change the
contract preference from revolving to non-revolving in Revolving to Non-
Revolving Term Conversion screen.
Specify the User ID and Password, and
login to Homepage.
- On the homepage, type OLDTMCNV and click next
arrow.
The
Revolving to Non-Revolving Term Conversion
screen is displayed.
Note:
The fields which are marked in asterisk red are
mandatory fields.
- You can enter below details in this screen.
Current BalanceExpected Balance – Post Conversion
- Commitment Amount
The total commitment amount
after conversion is displayed in this field.
- Available Amount
The total unutilized amount of
a commitment contract after conversion is displayed in this
field.
The contract balances are not rebuilt by the system while
converting the commitment from Revolving to Non-Revolving. You should
handle any balance changes during the conversion or subsequent to
conversions by means of Value dated amendments for the respective
commitments.
In the preferences screen, you have to indicate your
schedule preferences:
- Whether holidays are to be ignored when schedule dates are
calculated.
- Whether schedule dates are to be moved (backward or forward)
if a schedule date falls on a holiday.
- Whether a movement of the schedule date across the month is
allowed.
- Whether the mode of liquidation of the repayment schedules
has to be automatic.
For a commitment, the schedule you have defined for the product
is applied to the fee, by default. You can reverse these schedules
through the
Contract online screen, Schedules
tab by providing the following details.
- The start date
- The number of schedules
- The frequency and unit
- The amount if the fee is a flat amount
For the principal schedule defined to maturity, you have to
give the principal amount through this screen. You can also indicate
your preference for cost of credit valuation.
The fee and principal schedules can
be liquidated automatically or manually, through the Manual
Liquidation screen.
- Cost of Credit Valuation
The system displays
the option entered at the product level. If the option is deselected
at the product level, it is disabled in this screen and you cannot
select this option at the contract level. If this option is selected
at the product level, then you can deselect it. During contract
amendment, you can select it or deselect it based on its value in
the previous version.
The system performs cost of credit
valuation for the contract for both performing and nonperforming
contracts only if the Cost of Credit Valuation
Reqd check box is selected for the contract.
This topic contains following sub-topics:
