This chapter contains the following sections:
A syndication contract (facility, tranche, or drawdown) could have various components other than the Principal, such as Interest, Charges, Fees, Margins or SKIM components.
Given below is the sequence of steps you need to follow to apply and process fees levied on a syndication contract:
For more information on charges and fees, refer to Charges and Fees User Manual.
You can define a fee rule though the ‘Fee Rule – Definition’ screen. You can attach the fee rule to a Fee Class or directly to a syndication product.
You can invoke the ‘Fee Rule - Definition’ screen by typing ‘LFDFEMNT’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
Specify the following details in this screen:
Fee Rule
Every fee rule you define in Oracle Banking Corporate Lending must be identified by a unique code. Assign a unique code to the rule you are creating. You can define a code comprising of a maximum of nine alphanumeric characters.
Description
Briefly describe the rule you are creating to facilitate identification from a list of similar rules. The description can consist of a maximum of 30-alphanumeric characters.
Slab/Tier
When defining a fee rule, you can specify whether the rule should have a Slab or Tier structure. However, the actual Slab or Tier structure should be maintained in the ‘Fee Rule Maintenance’ screen.
Rate/Amount
You can indicate the basis on which the rule being defined to calculate the applicable fee for the fee component – as a percentage or amount. Accordingly, you can capture the fee rate or fee amount applicable for the various Slabs/Tiers defined for the rule in the ‘Fee Rule Maintenance’ screen.
For more details on this screen, refer the heading ‘Maintaining Fee Rule details’ in this chapter.
Once you have created a fee rule, you have to define attributes for the rule through the ‘Fee Rule Maintenance’ screen. You can invoke the ‘Fee Class Maintenance’ screen by typing ‘LFDFEECL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
Alternatively, you can also access this screen from the ‘LB Tranche Contract Online’ screen.
For more details on defining fee rules when capturing a tranche, refer the section titled ‘Specifying tranche fee details’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
The details to be maintained for a fee rule are explained below:
The following details have to be captured in the ‘Contract Details’ section of the screen:
Module
You have to select the module for which the fee rule details are being maintained. Choose LS to indicate that the fee rule details are specific to the Loans Syndication (LB) module.
When you select the module, the description associated with it is displayed alongside.
Contract Ref No
You have to select the reference number of the syndication contract (facility/tranche/drawdown) for which fee details have to be maintained. According to the contract you select, the following will default:
You also have the option to select ‘ALL’ here, to indicate that the rule details can be applied to all contracts processed in the LB Module.
In this case, the following details are displayed:
Counter Party
Selection in this screen depends on your specification in the ‘Contract Ref No’ field. If you choose to maintain the fee details for a specific contract, the option list displays the names of the borrowers maintained for the selected contract and also the ‘ALL CUSTOMERS’ option. If you select a specific customer, the components are applicable for only the selected customer. If you select ‘ALL’, the components are applicable to all counterparties of the selected contract.
If you select ‘ALL’ in the ‘Contract Ref No’, you can select only the ‘ALL’ option here. This indicates that the fee details may be applied to all LB contracts and all counterparties of all contracts.
Fee Rule
You have to select the rule for which you want to maintain details. The fee rules you define through the ‘Fee Rule – Definition’ screen are available in the option list provided. Select a rule from this list. When you select the rule, the following attributes that have been defined through the ‘Fee Rule – Definition’ screen also defaults and you cannot change these:
Amount/Percentage
You can define the Slab/Tier structure for the contract, based on which fee will be applicable either in terms of amount or percentage. Select the appropriate option.
Specifying Currency Details
Capture the following in the ‘Currency Details’ section of the screen:
CCY
You have to select the currencies for which the rule details are applicable. If you are maintaining fee details for a specific contract, the contract currency is displayed here. You can select additional currencies, if required. The option list displays all the currencies allowed for your branch.
When you select a currency code, the name of the currency is also be displayed.
Click the ‘Add Row’ button to select the next currency, if required.
Specifying Effective Dates
Capture the effective date in the ‘Effective Details’ section of the screen:
Effective Date
For each currency you select, specify the date from which the fee amount that you specify for an amount Slab/Tier should become effective in the system. Fee is applied to contracts based on the Slab/Tier (specified for the contract currency) from this date onwards. Capture the date in ‘DD-MMM-YYYY’ format.
For each effective date captured for a currency, you have to maintain the Slab/Tier structure in the ‘Fee Details’ section of the screen.
Maintaining the Slab/Tier Structure
You can maintain the Slab/Tier (as specified in the ‘Fee Rule – Definition’ screen) in the ‘Fee Details’ section of the screen. Specify the following for the structure:
Amount From/Percent From
Enter the amount slabs for which you want to specify a fee amount. You can maintain different Slab/Tier structures for each effective date captured for the fee. Depending on the ‘Amount Type’ you select, whether Amount or Percent, the system display zero as the ‘Amount From’ or ‘Percent From’ for the first Slab/Tier. For subsequent slabs, the ‘Amount To’ or ‘Percent To’ of the previous slab is displayed.
Amount To /Percent To
Capture the upper limit for the various Slabs/Tiers here. For type ‘Amount’, the maximum limit allowed is 999,999,999,999.99. The amount/percent specified here becomes the ‘From Amount/Percent’ for the next Slab/Tier.
Fee Amount/Rate
Depending on the fee type you specify (whether Rate or Amount), capture the rate/amount applicable for each Slab/Tier. The rate specified here is applicable on the tranche amount which vary based on the percentage utilization.
Example
The following example illustrates the way in which Oracle Banking Corporate Lending applies the slab based fee rule details that you have maintained:
Refer to the Fee Rule Maintenance above; the following are the details entered:
Currency – EURO
Effective Date – 1st January 2004
Slab Details:
Amount From |
Amount To |
Fee Amount |
0 |
20,000,000 |
2,000 |
20,000,000.01 |
40,000,000.00 |
4000 |
40,000,000.01 |
60,000,000.00 |
6000 |
60,000,000.01 |
80,000,000.00 |
8000 |
80,000,000.01 |
100,000,000.00 |
10,000 |
Say, for example, the contract amount is 50,000,000 currency units. On the 1st of January 2004, for the contract currency EURO, the fee amount applied is 6000 currency units.
You can enter the Effective Date for various other currencies and the fee amount that should be applied to the contract. If you enter a back value dated contract, the appropriate fee amount is taken.
You can specify the media for the message generation in ‘Media for Message Generation’ screen. You can invoke this screen by clicking ‘Media’ tab. This button is enabled only if the ‘FpML Type’ option is deselected at the contract level and the ‘Media Priority’ option is selected at the product level.
If this button is enabled, then the system displays an override message saying to view the ‘Media for Message Generation’ screen. If not, the system handoffs the message as per the details maintained in the ‘Customer Entity Maintenance’ screen.
For more information on the ‘Media for Message Generation’ screen, refer the section ‘Specifying Media for Message Generation’ in the Loan Syndication Contracts - Part 2’ chapter of this User Manual.
You have the option of defining a Fee Class through the ‘Fee Class’ screen. If you define a Fee Class, you can attach the same directly to a product. The product automatically inherit the attributes of the class.
If you do not define a Fee Class, you have the option of attaching a ‘Fee Rule’ to a product. In this case, however, you have to specify the fee preferences for the product at the time you associate the product with the rule.
You can invoke the ‘Fee Class Maintenance’ screen by typing ‘LFDFEECL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
The details to be captured in this screen are explained below
Specify Basic Details of the Fee Class
The basic details include the following:
Class Code
When defining a fee class, identify it with a unique code. The code helps you identifying the fee class in the system. You can devise a code consisting of a maximum of 10-alphanumeric characters.
Description
Briefly describe the fee class you are creating to facilitate identification of the same. The description can consist of a maximum of 30-alphanumeric characters.
Module
You have to select the module for which the fee class details are being maintained. Choose LB to indicate that the details are specific to the Loans Syndication (LB) module.
When you select the module, the description associated with it is displayed alongside.
Specifying Class Preferences
In the ‘Main Preferences’ section of the screen, you have to specify the following:
Agency Fee
You may select this option to indicate that the fee income received on a contract is meant for the leading agent alone. It does not get propagated to the other participants of the syndication contract.
If you select this option, you are not allowed to select the ‘Participant Propagation Required’ option.
FAS91
Select this check box to perform FAS91 computations. System validates if:
Participant Driven Fee
If you select this check box, system allows you to define an individual fee amount for each participant.
Note
Expense Fee
Select this check box to enable the expense fees. The fees can be accrued or amortized.
The expenses may be flat amounts (such as Legal Fee) or rate based on a specific basis amount (such as fee paid to credit guarantor)
These are expenses incurred against a contract which the bank does not directly recover from the borrower. These expenses can be one-time expenses or periodic expenses or paid in advance or in arrears. They may be incurred at the Facility/Tranche/ Drawdown levels.
In expense the fee calculation happens only within the schedule period of the contract whereas in normal arrears the fee calculation happens from the start of the contract till the schedule end date and for advance from the start of the schedule till the end of the maturity date.
For more information refer, to ‘Expense Fee’ section in this User Manual.
Basis Amount Tag
When defining a fee class, select the basis amount tag on which the fee amount should be calculated. The applicable amount tags are displayed in the option list provided. The description of the tag is displayed when you select the amount tag.
System computes a fee for issuing a letter of credit. This amount is paid only to the banks that have issued the LC. You can define a maximum of 10 such issuer fee components for 10 different issuers. You can associate each fee component with the corresponding basis amount tag.
The following table illustrates the amount tags used at the facility, tranche, and drawdown levels.
Basis Amount Tag |
Facility |
Tranche |
Drawdown |
Utilized |
No |
Yes |
No |
UNUTIL |
No |
Yes |
No |
DD count |
No |
Yes |
No |
User input |
Yes |
Yes |
Yes |
Principal |
No |
No |
No |
Principal-Outstanding |
No |
No |
No |
Tranche-Current-Limit |
No |
Yes |
No |
Tranche Outstanding |
No |
Yes |
No |
ISSUER1_LCOS |
No |
Yes |
No |
ISSUER2_LCOS |
No |
Yes |
No |
ISSUER3_LCOS |
No |
Yes |
No |
ISSUER4_LCOS |
No |
Yes |
No |
ISSUER5_LCOS |
No |
Yes |
No |
ISSUER6_LCOS |
No |
Yes |
No |
ISSUER7_LCOS |
No |
Yes |
No |
ISSUER8_LCOS |
No |
Yes |
No |
ISSUER9_LCOS |
No |
Yes |
No |
ISSUER10_LCOS |
No |
Yes |
No |
COMMERCIAL_LCOS |
No |
Yes |
No |
STANDBY_LCOS |
No |
Yes |
No |
COMPONENT_AMOT |
Yes |
Yes |
No |
COMPONENT_SPLT |
Yes |
Yes |
No |
TRANSFER_AVL |
No |
Yes |
No |
OUTSTANDING |
No |
Yes |
No |
AVAILABLE |
No |
Yes |
No |
Example
For an ‘Advance’ fee component, the following amount tags can be used:
Stand By Fee - Borrower
Select this check box if you want enable stand by fees for borrower. Stand by fee rate is determined by overall borrower drawdown level of total facility and applied to all undrawn amounts, using one single rate for all participants’ undrawn amounts.
Stand By Fee - Participant
Select this check box if you want enable stand by fees for participant. Each participant’s standby fee rate is determined on specific drawdown level.
Note
While defining a class, you can specify the rule type for the fee component. The available options are:
For calculating fee on contracts, you have to select ‘Margin Rule’ as the rule type.
Fee Rule
Select the applicable fee rule from the option list. The option list includes the rules that you have maintained through the ‘Fee Rule – Definition’ screen. When you select the rule, the description of the rule is also displayed.
Fee Collection Mode
Select the mode of collecting the fee. The available options are:
Note
Fee rate maintenance is done for ‘Advance’ and ‘Arrear’ fee components.
The following options are available in the ‘Date Preferences’ section of the screen:
Allow Start Date Input
By default, a fee component (if applicable for the product involved in the contract) becomes effective on the ‘Start Date’ of the contract (facility/tranche/drawdown). However, if you select the ‘Allow Start Date Input’ for the fee class (which would subsequently be associated with a syndication product), you are allowed to modify the start date of the fee component in the ‘Fee Components’ screen.
Allow End Date Input
Similarly, by default, a fee component (if applicable for the product involved in the contract) ceases to be associated with a contract on the contract ‘End Date’. However, if you select the ‘Allow End Date Input’ for the fee class (which would subsequently be associated with a syndication product), you are allowed to modify the end date of the fee component in the ‘Fee Components’ screen.
Note
If you do not select the above options, you are not allowed to change the ‘Start Date’ and ‘End Date’ for a fee component in the ‘Fee Components’ screen.
For more details on this screen, refer the heading ‘Specifying facility fee details’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
In the ‘Liquidation Preferences’ screen, you have to select the following:
Liquidation Mode
Select the mode of liquidating the fee components under this fee class. You have the following options:
For more information on forward processing, refer the heading ‘Forward Event Processing’ in the ‘Reference Information for Loan Syndication’ chapter of this User Manual.
Specifying Preferences for Fee Accrual
In the ‘Accrual Preferences’ section, specify the following:
Accrual Required
You have the option to accrue the fee earned on syndication contracts. To do this, you have to check this option.
Accrual Method
If accrual is required, you can specify the accrual method. You can accrue a fee using any one of the following methods:
You can amortize the portion of the FAS91 fee components and accrual starts from the date of the liquidation of the FAS91 FEE. For amortizing the fees, you should set the Accrual Method to ‘Straight Line’. The amortization amount is calculated based on the end date of the facility or tranche. For example, if the fee is linked to a facility, the facility end date is used as the last day to calculate the amortization amount.
Specifying Other Preferences for the Class
In the ‘Other Preferences’ section, you can opt for the following:
Allow Rule Amendment
You can select this option to allow amendment of the fee rule associated with the contract. If you check this option, you are allowed to change the default fee rule in the ‘Fee Components’ screen.
Allow Amount Amendment
You can select this option to allow amendment of the system calculated fee amount (utilized fee and unutilized fee) at the contract level (in the ‘Fee Schedules’ screen).
For more details on this screen, refer the heading ‘Maintaining facility fee schedules’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
Note
This field is applicable only if you select the ‘Fee Collection Mode’ as ‘Advance’.
Billing Notice Required
You can select this option to instruct the system to send a billing notice to the concerned borrower/participant as a reminder of the payment. The notice is sent predefined days before the due date of the fees.
You can capture the number of days, before which the notice should be generated, in the ‘Borrower Product – FEE Details’ screen.
Participation Propagation Reqd
While entering fee details, you have the option of passing the fee collected from the borrower to the participants of a facility, tranche or drawdown. The participants share the fee received as per the fee sharing ratio for a facility and as per the ‘Asset Sharing Ratio’ for tranche and drawdowns. This information is captured in the ‘Participant Asset Ratio’ screen.
However, you are not allowed to propagate the fee to the participants if you have marked the fee as an ‘Agency Fee’. In this case, only the lead agent is eligible to receive the fee amount.
Each participant is entitled to stand-by fees which need to be calculated on undrawn and available portion of its participation in overall facility. As participation mix may vary for specific drawdowns, each participant’s stand-by fee must be calculated on participant’s share of facility less aggregate share of drawdowns over the period (quarterly/monthly).
System needs to compute the stand-by fee based on the undrawn, available portion of the facility for each participant, less the aggregate drawdowns provided by such participant under the facility. Undrawn Portion for each participant = Total Facility (less any permanent reduction of non-revolving tranche) – Aggregate Drawdowns.
The standby fees are to be calculated and accrued on daily basis and payable in arrears (quarterly/monthly/other). The system allows to define the Slab structure in terms of percentage of undrawn portion.
Slab based standby fees may be applicable in the following manner:
Note
You can associate a ‘Fee Class’ or ‘Fee Rule’ with a borrower product through the ‘Borrower Product – FEE Details’ screen.
You can go to ‘Loan Syndication - Borrower Product Definition’ (LBDPRMNT) screen and click ‘Fee’ tab.
For more information on this screen, refer the heading ‘Specifying fee components for a borrower product’ in the ‘Defining Products for Loan Syndication’ chapter of this User Manual.
You can specify various fee components with a contract through the ‘Fee Components’ screen.
The fee components attached at product is defaulted in this screen. You can go to ‘LB Tranche Contract Online’ (LBDTRONL) screen and click ‘Fee’ tab.
You can modify the fields like ‘Bill Notice Required’ and ‘Billing Notice Days’.
If ‘Fee Type’ is of participant driven fee, then you need to click the ‘P Fee’ tab and enter the amount for participants manually.
If ‘Fee Type’ is of rule based or user input, then you need click the ’Ratio’ tab and click ‘Calculate’ button so that the final ratio is 100.
For more details on this screen, refer the heading ‘Specifying facility fee details’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
You can capture the fee schedules for a contract in the respective contract screen
For a facility
For a borrower facility, you can specify schedules for fee components through the ‘Fee Schedules’ screen. To invoke this screen from the ‘Facility Contract Online’ screen, click the ‘Schedules’ button.
For details on this screen, refer the heading ‘Maintaining facility fee schedules’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
For a Tranche
For a borrower tranche, you can capture the fee schedules in the ‘Schedule Details’ section of the ‘Schedule’ tab of the ‘LB Tranche Contract Online’ screen.
Schedules are defined for fee components like ‘Advance’ and ‘Arrears’ for tranche using this screen’.
Note
For ‘Advance’ fee component, it is possible to define schedules on the value date of tranche.
For details on this, refer the heading titled ‘Specifying schedule details’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
For a Drawdown
For a borrower drawdown, you can capture the fee schedules in the ‘Schedule Details’ section of the ‘SCHEDULE’ tab of the ‘Drawdown Contract Online’ screen.
For details on this, refer the heading titled ‘Specifying repayment schedule details’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
You may want to amend certain details of a fee component or reverse the fee of a component for a syndication contract (facility, tranche or drawdown). This can be done through the ‘Fee Amendment’ screen. For a fee component which has not been liquidated, is active and future dated, you can:
You can invoke the ‘Fee Amendment’ screen by typing ‘LBDFEAMD’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
This screen displays the fee component details associated with the selected contract. The following details are displayed:
Note
For the fee components having basis amount as UTILIZED or UNUTILIZED,if there is a change in UTILIZED or UNUTILIZED amount due to Value dated amendment (VAMI), creation or liquidation of Drawdowns, then the unpaid schedules are recalculated and reflected in the future fee schedules. The recalculation for the unpaid fee schedules happens during the VAMI, If the change in basis amount happens during the fee calculation period of the Advance fee component's latest paid schedule, then the recalculation happens during the EOD on the date of amendment, and the calculated amount for that schedule is the sum of the calculated amount before amendment and after amendment.To make an amendment, you have to unlock the contract. To do this, click the ‘Unlock’ option from the menu.
Note
You can amend the fee for FAS91 fee components by clicking ‘FAS91’ in the ‘Fee Amendment’ screen. However, this is applicable only if the ‘Pass FAS91 Accounting Entry’ check box was not checked at the time of booking a contract.
For more details on FAS91 computation, refer the section ‘Computing FAS91 fee details’ in the Loan Syndication Contracts chapter.
In the Fee Amendment screen, you can also change the settlement account of the borrower by clicking the ‘Settlements’ tab.
To amend the fee schedules defined for a component, select the component
and then click the ‘Fees Schedules’
button in the ‘Fee Amendment’ screen. The schedules maintained
for the selected component is displayed in the ‘Fee Schedules’
screen.
The following details will default to the ‘Component Details’ section of the screen:
In the ‘Schedule Details’ section of the screen, you can amend the following for an ‘Active’ component:
In the ‘Amount Due’ section of the screen, the system displays the ‘Due Date’ and the ‘Amount Due’ for each schedule.
After making the required amendments, click the ‘ok’ button to save and exit the screen.
Similarly, select the next component and change the schedule details, if required.
To view the settlement details for the fee components, click the ‘Settlement’ tab in the ‘Fee Amendment’ screen.
In this screen, you can change the settlement account for a fee component, if required.
To view/amend the fee rule details for the fee components, click the ‘Fee Rule’ tab in the ‘LB Fee Amendment’ screen.
You can define the fee structure and the applicable rate at the facility level.
Using this screen you can modify the existing fee schedule and also set a new fee rule for any new schedule.
For more information on fee rule, refer to ‘Processing Charges and Fees’ chapter of this User Manual.
You can view the ratio in which a fee component is shared among the participants of the contract. To do this, select the fee component and then click the ‘Ratio’ tab.
The ‘Fee Component Sharing Ratio’ screen is displayed, as shown below:
In this screen, you can view the following:
You can view the events triggered for the contract only after you save the amendment.
The CAMD event will be triggered for the contract. To view the event details, click the ‘Events’ tab in the ‘Fee Amendment’ screen.
The ‘Events’ screen is displayed, as shown below:
For more details on this screen, refer the section titled ‘Viewing events for the facility’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
By default, all the fee components defined for a borrower product will become applicable to contracts processed under it.
Example
The ‘Advance’ fee component is attached at the Borrower Tranche product level, which is then defaulted to the tranches under this product.
However, you may add new components to a product after having processed contracts under it. The new component will be automatically associated with the contracts processed under the product after the addition of the fee component.
Oracle Banking Corporate Lending allows you to include the new component for the existing contracts as well. You can do this through the ‘Fee Amendment’ screen.
Follow the steps given below to include a new component:
You can reverse a fee component through the ‘Fee Reverse’ screen. To do a reversal, select the contract for which you want to reverse a fee component in the ‘Fee Amendment Reversal’ (LFDFCAUT)screen. Then, click the ‘Reverse’ from the menu.
The ‘Fee Amendment Reverse’ screen is displayed.
The following details are displayed in the ‘Component Details’ section of the screen:
Select the component you want to reverse and check the ‘Reverse’ option. Then, click the ‘Ok’ button. Oracle Banking Corporate Lending reverses all the liquidation entries posted for the component.
Note
You cannot reverse an ‘Active’ component. A component moves to the ‘Liquidated’ status only after all the schedules of the component are liquidated.
You can manually liquidate the fee schedules defined for fee components in the ‘Fee Liquidation’ screen. You can liquidate even future dated schedules through this screen. You can invoke the ‘Fee Liquidation’ screen by typing ‘LBDFEELQ’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
To liquidate a fee component schedule, do the following:
Note
Click the ‘Save’ from the menu.
You can perform selective liquidation of the fee components as the payment happens, if required. For this, you need to specify the amount in the Amount Paid field for the fee component which needs to be liquidated. The System liquidates only those components for which Amount Paid value is the same as Amount Due. You cannot perform partial payments here.
For those components which are not part of the current fee liquidation, you need to specify the Amount Paid as zero.
Fee amount to be collected from the customer in advance is calculated based on the balance type defined for the fee component.
Any ‘Fee Rate’ or ‘Basis Amount’ or ‘Fee Basis’ changes update the fee amount due only for the next unpaid schedules on or after the effective date of the change for the ‘Advance’ fee component. The accrual for the current period is not affected with this change and is applicable only for the future unpaid schedules.
Note
Updation of the fee amount due happens as part of the below mentioned events, provided the unpaid fee schedule due date is equal or greater than the below event’s effective date.
You can specify a future date as the value date for fee liquidation, if required. When you book a future dated Fee payment, events are fired, but there is no accounting entries for these booking events. You can generate Fee advices when you save a future dated fee liquidation by tagging suitable advices to the instruction booking event.
You can reverse a future dated Fee payment instruction, if required. Events are generated during the reversal of future dated payment instruction.
The following are the events generated while booking a future value dated Fee payment and reversing the same:
Event Code |
Event Description |
Sequence of Occurrence |
BFLQ |
Booking of Future dated Fee liquidation |
Triggers while booking the future value dated Fee liquidation |
RFLQ (Facility, Tranche & Drawdown Products) |
Reversal of Future dated Fee Liquidation |
Triggers while reversing the future value dated Fee liquidation |
Batch process created for processing forward dated Principal and Interest payment instructions will be enhanced to process the future dated Fee payment instructions on the value date of the instruction. When you initiate the batch, accounting entries are passed based on the settlement accounts prevailing at the value date of liquidation.
Note
You can maintain settlement instructions for various components such as fees, charges, tax, principal, interest, and so on, using the ‘Overwrite Settlement Instruction Details’ screen. Using this screen, you can post liquidation entries into an Internal GL account instead of the customer account at the time of rollover. Click ‘Overwrite SI’ in the Fee Liquidation screen to invoke the following:
Enter the details specified below:
Component
This screen displays all the components displayed in the Settlement Message Details screen.
Internal GL
Specify the Internal GL accounts into which you want to post the liquidation entries for the components.
Overwrite default settlement instruction
Check the ‘Overwrite default settlement instruction’ box to confirm that the liquidation entries should be posted into the Internal GL account. System will post the entries to the Internal GLs only if you check this box. Otherwise, system will post the entries as per the settlement instructions specified for the component of the contract.
You can also view the settlement account details for the fee component in the ‘Settlement Message Details’ screen. Click the ‘Settlements’ tab to view the details.
You can view the events triggered for the contract only after you save the details. Click the ‘Events’ tab to view the details in the ‘Event Log Details’ screen, as shown below.
For more details on this screen, refer the section titled ‘Viewing events for the facility’ in the ‘Loan Syndication Contracts’ chapter of this User Manual.
If you are liquidating a fee component for a borrower drawdown, you can preview the message associated with the contract in the ‘Message Preview Window’. You can preview the message only after saving the details and before authorizing the same.
This sub-system is used for manual payments of interest and fees respectively.
This enables you to waive or un-waive Tax components applied on interest and fees at the time of their manual payment.
In the product tax linkage of Tranche and Facility maintenance, you can add tax components for various Fee components. And the contract level, you can either withheld or waive of the tax for these components. You can maintain tax rate for a combination of individual tax component and a investor or for the combination of individual tax component which is common for all investors.
Oracle Banking Corporate Lending enables you to refund tax for a specific investor for all contracts or specific contract using ‘Investor Tax Refund’ screen. You can invoke the ‘Investor Tax Refund’ screen by typing ‘LBDTXRFC’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
You can specify the following details here:
Customer No
Select the customer for whom you want to refund the tax from the investor list provided.
The name of the customer gets displayed in the adjacent field. The investor refund generates a unique refund number for the investor.
Note
Tax refund can be processed only for those contracts for which the ‘Tax Remittance’ is yet to be processed.
Refund Percentage
Specify the percentage of tax refund for the withheld Tax Amount. This percentage gets applied on the tax amount eligible for refund and displays the refundable amount from all the contracts of the investor.
Apply Refund
Select this check box to specify tax refund for the displayed contract of the investor.
Note
You cannot amend the refund amount, component and the tax schedules.
You can do the reversal of refund against each refund number. To query a specific refund record of an investor you have to provide the customer number and refund number. The two events which are triggered for Investor Tax Refund and Investor Tax Refund Reversal are:
Every Investor Tax Refund and Refund Reversal will have the following events in all LB contracts for which Apply refund is refined:
While processing contracts in LB and FC modules, you can choose to accrue fee components at the time of booking the contract. The upfront fee involved in a contract is accrued by the system over the tenor of the contract.
During contract processing, you need to enter the details of the fee if you are collecting a fee from the customer. You can specify the fee details in the ‘Accrual Fee Input’ screen
You can invoke the ‘Amortization Fee Details’ screen by typing ‘LFDACFIN’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
In the ’Amortization Fee Details’ screen, click on the ‘Accrual Fee’ to view the upfront fee details associated with a loan.The following details are available in this screen:
Note
For more information on Upfront Fee Accrual, refer to the Processing Upfront Fee Accruals in Bilateral Loans User Manual.
This chapter contains the following sections:
Agent collects servicer fee from borrower for the rendered syndication agent services. The UDF ‘COMPONENT-TYPE’ should be maintained at the interest class level to identify the Servicer fee interest component. The option list for this UDF displays the value ‘SERVICER-FEE’.
You should define a tranche basis margin component in the ‘Margin – Definition’ screen and create an interest class with the value of the UDF ‘COMPONENT-TYPE’ as ‘SERVICER-FEE’.
The interest component should be maintained at the Borrower Drawdown product level for servicer fee and the new margin component should be attached with the interest component. The servicer fee interest component should not be maintained as main interest component
While booking a tranche contract, margin rate (service fee rate) should be captured for the new margin component created for servicer fee processing. The margin rate for servicer fee margin component can be captured in the standalone margin maintenance screen as well, after the tranche is authorized
While booking a new drawdown, servicer fee margin component will be defaulted to the new drawdown level Interest component that has this margin attached, The other interest components should not have this margin attached
If the servicer fee margin rate is changed at the tranche level, then the propagation of the servicer fee margin rate to the underlying drawdowns will happen as part of end of day batch process.
During liquidation of the new interest component associated with the servicer fee margin component, the interest amount should be credited to income GL and this should be achieved by defining appropriate accounting entries for the liquidation (LIQD) event at the Borrower Drawdown Product level.
During liquidation of the new interest component associated with the ‘servicer’ fee margin component, the interest amount should not be credited to the participants, as ‘servicer’ fees should be received by the agent only. To achieve this, accounting entries should not be maintained for servicer fee interest component for participant drawdown products for LIQD event.
Limitations
You can invoke the ‘Accrual Fee Class Maintenance’ screen by typing ‘LFDACFCL’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
Class Code and Module
An adhoc expense fee class is created by providing a unique combination of ‘Class Code’ and ‘Module’. You can enter the class code and select the module from the adjoining drop- down list.
Class Description
A brief description of the class code.
Fee Type
Select the fee type as ‘Expense’ for defining adhoc expense fee class.
The fee that is linked on a contract processed under the product. You can link syndication loan product using the ‘Loans Syndication - Facility Product Definition’ (FCDPRMNT) and ‘Loans Syndication - Borrower Product Definition’ (LBDPRMNT) screens. You need to click ‘Accrual Fee Details’ tab in these screens. To define adhoc expense fee, select the 'Fee Type' as 'Expense'.
The components of LB product are mapped to corresponding components of OL product.The accrual fee component of LB products are mapped to corresponding accrual fee component of OL products. That is, 'Agency Component' of LB product is mapped with 'OL Component' of OL product. This mapping is done in ‘LB OL Product and Component Mapping’ screen.
You can invoke the ‘LB OL Product and Component Mapping’ screen by typing ‘LBDPCMAP’ in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button.
You can maintain adhoc expense fee details for a product. These values get defaulted to ‘Amortization Fee Details’ (LFDACFIN) screen.
Participant accounting details can be viewed in Participant Summary Screen.
For more information on adhoc fee expense accounting entries, refer to ‘Accounting Entries for Adhoc Fee Expense’ section.
Expense type of fees refer to the fees which are incurred by the bank during of the credit agreement and are not directly charged to the borrower. These expenses may be of the following types:
Expenses incurred by agent on a facility or tranche which are to be shared with other participants. Such expense may be event driven or ad hoc.
Expense incurred on a facility or tranche by the Bank, irrespective of whether it is an agent or a participant. For example, Fees paid to Credit Guarantor, Legal fees, and so on. These types of expenses are periodic, paid in advance, or in arrears.