5.5.1 Restarting Amortization Fee Accrual

When a commitment changes from Performing to Non-performing, un-amortization fee accrual stops. When the status of the commitment changes to Performing, the system does an amortization of fees as though the fees were received on the date of the status change. This process of amortization restart happens in the following steps:

• The system computes the outstanding fee amount for each component as Total Fee Liquidation Amount - Total Fee Refund Amount - Till Date Accrual.
• The system refunds the outstanding fee amount (Unamortized).
• The system liquidates the outstanding fee amount (Unamortized) with start date as status change date and end date as old fee end date.

The aforementioned process is performed for each individual amortization fee component, including FAS 91 fee, Marks Fee, and Deferred Interest Fee component.

The system performs the following validations for each fee component after commitment status change:

• Status change date should be less than the fee end date.
• Status change date should be less than the commitment maturity date.

If any one of the above validation fails, then system does not perform amortization fee accrual restart for that component. In such cases, the system catches up the accrual for the component for the non-performing period during the status change from Non-performing to Performing.

After the systematic refund and liquidation, the actual accrual process begins for each amortization fee component of performing commitment, by taking into account the current outstanding fee amount.

Reversal of Fee Payment

You can initiate fee payment reversal using Fee Payment Reversal screen. To invoke this screen, click Reverse in the Fee Liquidation screen.

When you initiate the fee payment reversal, you can exclude it from loan statement.

• Exclude From Statement - Select this field to not allow the fee payment and its reversal appear in the Loan Statement.
• Remarks - You may add remarks, if you wish to, in this field.