This topic provides the instructions to capture the Loan preference details.

1. On the Bills and Collection Contract Detailed screen, click Loan Preference.
   Loan or Finance Preference screen is displayed.

   Figure 5-9 Loan or Finance Preference

   
   
   Description of "Figure 5-9 Loan or Finance Preference"
   

   Note:

   To recall, you have the option to create a loan from bills module. In case you opt for this option, the preferences you maintain in this screen will be used to create a loan during liquidation of bills.

   For information on fields, refer to the field description table below:

   Table 5-4 Loan Preference - Field Description

   Field	Description
   Contract Reference Number	The system displays the contract reference number.
   Loan Currency	The system will display the local currency of the Branch in which the loan is initiated. You cannot change this value.
   Tenor	Here you need to indicate the tenor for each loan being maintained. The tenor is expressed in days. The minimum/maximum tenor specified in the loan product underlying the contract has to adhere.
   Exchange Rate	Exchange rate will be the same as Original exchange rate, if the customer is not RP enabled. During Import Bill liquidation, system should fetch RP Exchange Rate from FCUBS if Bill Counterparty is RP enabled. RP Exchange rate should be fetched on Subsystem pickup on visiting Loan Preference and will be defaulted in 'Exchange Rate'. User can modify the same if required. RP Exchange rate should be fetched on Save if user does not visit Loan preference. During authorization of Import Bill liquidation, loan amount is computed based on Exchange Rate available.
   Rate Type	The Rate Type indicates whether the rate applied for the conversion is the Buy rate, Mid Rate or the Sell Rate. Select the appropriate rate type from the options.
   Original Exchange Rate	The base/actual exchange rate between the Contract currency and Collateral currency gets displayed here.
   Loan/Finance Value Date	The system displays the debit value date. However, amend this field. For tracking the receivable from the current date, the system will create the loan one day before the debit value date and liquidate on the debit value date. In such cases, specify the loan value date as one day before the debit value date, so that, the system will create the loan (having one day as a tenor) as of that date and will mature on the debit value date.
   Event Sequence Number	The system displays the event sequence number.
   Units	Specify the units in which the tenor is specified. While creating a loan from the bills module, the system defaults the interest rate and exchange rate specific to the customer. These rates are taken from the section Promotion Maintenance of the Customer Maintenance screen. In case the default rates are not available, the system defaults the standard mid-rate. The system will calculate the penalty based on the loan creation date. That is, even if the value date is different from the loan creation date, the penalty will be calculated after the expiry of the penal start days counted from the date of creation of the loan. Manually change the number of penal value days to start applying the penalty from a different date. Example illustrates a bill with particulars; refer to Table 5-5 In this case, the system will calculate the penal interest from 30-Sep-2010. This date is derived by adding 30 penal start days to the loan creation date of 31-Aug-2010. Change the penal interest start date by manually changing the number of penal start days. That is, in the above case, set the penal start days as 24, and as a result, the effective date for the penalty is set to 24-Sep-2010.
   Limits	The following are limits entries.
   Serial Number	Specify the serial number.
   Liability No	Liability number will be defaulted from BC limits. Mutiple liabilities attached to that customer will be listed in the LOV. User can modify the same.
   Linkage Type	The system displays the linkage type.
   Linkage Reference Number	Select the linkage reference number from the option list.
   Linked Percentage	Specify the linked percentage.
   Limit Amount	The system displays the limit amount.

   Table 5-5 Example Instance

   Particulars	Value
   Bill Amount	GBP 10000
   Value Date	01-Aug-2010
   Maturity Date	31-Aug-2010
   Loan Creation Date/Liquidation Date	31-Aug-2010
   Dr. Value Date	25-Aug-2010
   Loan Value Date	25-Aug-2010
   Penal Start Days	30 Days

   Table 5-6 Passed Account Entries

   Event Code	Dr/Cr Indicator	Accounting Role	Amount Tag
   DSBR	Dr	LOAN ASSET GL	PRINCIPAL
   DSBR	Cr	BRIDGE GL	PRINCIPAL

   Table 5-7 Bill Contract without Advance by Loan

   Event Code	Dr/Cr Indicator	Accounting Role	Amount Tag
   LIQD	Dr	BC CUSTOMER	BILL_AMOUNT (or) BILL_AMT_EQUIV
   LIQD	Cr	NOSTRO	BILL_AMOUNT (or) BILL_AMT_EQUIV

   Table 5-8 Bill Contract with Advance by Loan

   Event Code	Dr/Cr Indicator	Accounting Role	Amount Tag
   LIQD	Dr	BRIDGE GL	BILL_LIQ_AMT (or) BILL_LIQ_AMTEQ
   LIQD	Cr	NOSTRO	BILL_LIQ_AMT (or) BILL_LIQ_AMTEQ