1.8.8 Alternate Risk Free Rate
Risk Free Rates daily from a published source and applied for floating rate types and Arrears collection type. The interest rate based on the rates maintained for RFR which supports Floating Rates and Arrear Collection type and not for Advance Collection type. When OBTF requires interest rate and computed interest amount, this new interest calculation engine on receipt of appropriate parameters sent will provide it.
Table 1-17 Field Description
| Field | Description |
|---|---|
| Alternative Risk Free Rate Preferences |
System to consume Risk Free Rates daily from a published source and it is applied for floating rate types and Arrears collection type. You can select any one of the below option as RFR calculation methods
|
| Look Back Days |
Specify the number of days to look back for interest rate. |
| Payment Delay Days |
Specify the number of days by which the interest (or installment) payments are delayed by a certain number of days and are thus due a few days after the end of an interest period. |
| Base Computation method |
Select the base computation method. It can be either Simple or compounded. |
| Spread\ Margin Computation method |
Select the Spread\ Margin computation method. It can be maintained as either Simple or compounded. |
| Spread Adjustment computation method |
Spread adjustment method can be kept as either Simple or compounded. |
| Rate compounding |
Selecting this option, enables the user to indicate whether the rate compounding to be applied for each calculation period. |
Parent topic: Interest Details for the Contract