8. Making Value Dated Changes

Any change to the terms of a deposit which affects its financial details and the accounting entries, can be made through the Value Dated Changes function of Oracle FLEXCUBE. Through this function you can make changes to authorized deposits on any day before the Maturity Date of the deposit. The changes to the terms of a deposit notified through this function take effect on a particular date called as the Value Date. That is why the changes brought about by this function are called Value Dated Changes.

This chapter contains the following sections:

8.1 Value Dated Amendments

This section contains the following topics:

8.1.1 Making Value Dated Amendments

You can specify value-dated changes for a deposit contract in the ‘Corporate Deposits Value Dated Changes Input’ screen, which you can invoke from the Application Browser. You can invoke the ‘Corporate Deposits Value Dated Changes Input’ screen by typing ‘LDDVAMND’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

Enter the reference number of the deposit to which you want to make amendments. The main details of the deposit are displayed in the screen. As mentioned earlier, the changes to the terms of a deposit notified through this function take effect on a particular date called as the Value Date.

A Value Date could be:

In the Amendment tab in the CD Value Dated Amendment screen, you can specify changes to the various components of a deposit like increasing the principal of the deposit, changing the interest rate or amount, charges or fees. You can also change the Maturity Date of the deposit. In addition to changing the values in certain fields, you can enter a value into a field which was not used when you captured the disbursement details.

For example, you may have not specified a fee at the time of contract input. You can do it using the Value Dated Changes function so that the fee entries are passed on the Value Date.

When you make a value dated change, only the accrual entries are passed by the Value Dated Changes function. All the other accounting entries are passed by the Automatic Contract Update function. The Value Date is the date on which the changes that are going to be defined will take effect. This can be a date earlier than today, today or a date in the future.

If the value date is a date in the past, it should not be beyond the following dates for any component:

You should ensure that a contract on which you plan to do back dated changes, does not have amortized schedules. Also, a value date in the future cannot be beyond the Maturity Date of the deposit. If it has to be beyond the Maturity Date of the deposit, then you have to first postpone the Maturity Date of the deposit so that your proposed future value date falls within the new maturity date. Only after this change is authorized can you fix a value date in the future for the deposit.The system defaults to today’s date.

Note

8.1.2 Navigating to Schedule Definition Screen

The schedule changes that have come about as a result of value-dated changes, can be done through the ‘Value Dated Amendments’ screen. For example, if the schedule change has come about following a change in the maturity date, you have to do this through this screen. Click Schedules in this screen.

8.1.3 Changing Maturity Date

Enter the new Maturity Date in the screen. When you change the Maturity Date or the Principal of a deposit:

You have to authorize the change in Maturity Date before you redefine the schedules as per your new requirements through the Contract Schedules screen. When you extend the Maturity Date of a deposit, the time code of the credit line to which the contract is linked should be beyond the new Maturity Date. If not, the system will seek an override. The new Maturity Date will be applicable to the deposit from the Value Date of the contract.

8.1.4 Making Changes in Interest

Through the Value Dated Changes function, you can make changes to the maturity date, the principal and specify a new value date for the deposit. However, if you want to change the interest rate, the rate code, the spread or the interest amount you have to invoke the Contract Interest, Charge and Fee screen of the ICCF module through the Value Dated Changes screen.

Note

You cannot change the charge or fee for a deposit.

You can make value dated changes only to the following components in the Contract Interest Charge or Fee screen:

Interest Rate

Enter the new interest rate. However, you will not be able to:

Rate code

If a floating type of interest has been defined, enter the new rate code.

Spread

Enter the new spread here.

Interest amount

Enter the new interest amount.

Acquired interest

If the deposit was already initiated when it was input, the interest amount that has been accrued should be entered here. The amount will be taken into account by the system during the next liquidation cycle. You can make changes to the acquired interest through this screen.

Waiver

The attributes of an interest component that have been defined for a product will be applied on a contract involving the product. If, for some reason you do not want to apply the interest component for the contract you are processing, you can do so by checking this field. The interest will be calculated but it will not be applied on the contract.

Note

For back valued changes in interest rate the system will take corrective action. Accruals will be redone till the last accrual date. Also, in case of a back valued change, the value date should not be beyond the last liquidation date.

8.1.5 Amortization After Value Dated Change

You can make a value dated change in the interest rate for a deposit with amortized schedules. The change can be with a value date of today or a date in the future. Back dated changes cannot be done for a deposit with amortized schedules. If the change affects the schedule, the schedules will be amortized again with the changed terms.

Note

Only the Principal and Interest schedules will be redefined. The Charge or Fee schedules will not be redefined. The schedule that falls due immediately after the value-dated change will have a slightly different amount (i.e., not the Equated Installment). This is because an adjustment has to be made if the period for which the interest is calculated has two differ­ent rates. The subsequent schedules will be amortized at the new rates.

8.1.6 Making Changes in Charges or Fees

The charge or fee rate can also be changed in case of a future dated deposit that is yet to be initiated and the Value Date has to be the same as the Initiation Date of the deposit. For example, for a deposit the new drawdown fees will be applicable only if the deposit is a future valued deposit that is yet to be initiated.

8.1.7 Settlement Button

If you want to make changes to the Settlement Accounts and the currency conversion rates you will have to invoke the Contract Input screen and go to the Settlements screen by clicking the Settlements button.

8.1.8 Deleting Value Dated Changes

You can delete the value-dated changes that you have made on a deposit provided:

All the value-dated changes have to be authorized before the End of Day operations begin. All the future valued dated changes are applied by the automatic contract update program when the changes become due. If the value date of the change is earlier than or the same as today’s date, the changes are applied immediately.

To delete value dated changes, call the contract on which you have made value dated changes (that are still to be authorized) through t he value dated changes screen by entering the reference number. The details of the ocnt will be displayed. Select ‘Delete’ in the Application tool bar or click delete icon. The value-dated changes will be deleted.

8.1.9 Authorization of Changes

To authorize the value-dated changes, you have to invoke the authorization screen.

8.2 Value Dated Amendment Simulation

This section contains the following topic:

8.2.1 Simulating Value Dated Amendment for Deposits

Value Dated Amendments for corporate deposits can be simulated using the 'Corporate Deposits Value Dated Changes Simulation' screen. You can invoke this screen by typing ‘LDDSIMVD’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.

You can save the details in this screen with the status as ‘Simulated’. You can also delete the simulated VAMI manually. In case, a simulated VAMI is not deleted, the same gets deleted as a part of the EOD batch. You can not authorize a simulated VAMI. Click ‘Contract Schedules’ tab to view contract with updated VAMI.

Note

The ‘Corporate Deposits Value Dated Changes Simulation’ screen is similar to ‘Corporate Deposits Value Dated Changes Input’ screen.

For further details on ‘Corporate Deposits Value Dated Changes Simulation’ screen, refer ‘Deposits Value Dated Amendment’ section in this User Manual.