3.15.8 Conditions and Covenants

This topic provides the systematic instructions to add or edit conditions and covenants details for the loan applications.

Conditions

The Conditions are stipulations and constraints recorded in a contract to restrict the usage of funds, in order to ensure proper utilization of funds for the specified purposes and to adhere to a stipulated schedule.

Covenants

Often there are restrictions on borrowers while extending credit facilities. Sometimes, a borrower promises certain future acts to assure the lender that the conduct of business dealings is fair, healthy and in accordance with the best practices. The purpose of covenant is to assist the lender to ensure the health of loan facilities does not deteriorate suddenly or unexpectedly before maturity.

To add conditions:

  1. From the More option, click the Conditions & Covenants to add or remove the conditions details.
    The Conditions & Covenants page appears.

    Figure 3-105 Conditions


    Description of Figure 3-105 follows
    Description of "Figure 3-105 Conditions"

  2. Perform the following actions:
    • Click Add Condition to add new conditions.
    • Click Remove to remove already added conditions.
  3. Enter the relevant details.

    Table 3-59 Conditions – Field Description

    Field Description
    Entity

    Select the entity on which user wants to set condition.

    The available options are

    • Party
    • Collateral
    • Account
    Entity ID Select the entity ID from the list. The options in the list appears based on the entity selected in the Entity field.
    Condition Specify the conditions for the selected entity.
    The available options are:
    • Check Saleability of collateral
    • Contract Of Sale
    • Copy of Quotes for Intended work
    Type

    Select the type when the conditions must be complied.

    The available options are

    • Pre Disbursement: If this option is selected then the selected conditions have to be complied prior with the account opening and loan disbursement.
    • Post Disbursement: If this option is selected then the selected conditions occur and are supposed to be complied post loan disbursement. This conditions are manually monitored.
    Status

    Select the status of the condition.

    The available options are

    • Open
    • Complied
    Actions User can perform below actions on the added record:
    • Click Save to save the record.
    • Click Close to delete the record.
  4. Click OK. The conditions are saved.

    Note:

    All the fields appears with the selected options in tabular format. User can edit the details on clicking the added row.

  5. Perform the following actions:
    • Click Add Condition to add new conditions.
    • Click Remove to remove already added conditions.
  6. Enter the relevant details.

    Table 3-60 Covenants – Field Description

    Field Description
    Entity

    Select the entity on which user wants to set covenants.

    The available options are

    • Party
    • Collateral
    • Account
    Entity ID Select the entity ID from the list. The options in the list appears based on the entity selected in the Entity field.
    Covenants Specify the covenants for the selected entity.
    Type

    Select the type when the covenants must be complied.

    The available options are

    • Financial
    • Reporting
    • Undertaking
    Status

    Select the status of the covenants.

    The available options are

    • Open
    • Complied
    Monitoring Type Select the monitoring type for the covenant.
    The available options are:
    • Fixed
    • Periodic
    • Ongoing
    Actions User can perform below actions on the added record:
    • Click Save to save the record.
    • Click Close to delete the record.
  7. Click OK. The covenants are saved.

    Note:

    All the fields appears with the selected options in tabular format. User can edit the details on clicking the added row.

  8. Click Close to close the screen.

Parent topic: Global Actions