2.2.5 Specifying Fee Basis
A new fee basis methods are introduced to support fee calculations based on working days and 365.25 as denominator for leap and non-leap year.
Different values for the numerator basis are as explained below:
- Actual - Actual number of days in a month is taken.
- 30 (Euro) - 30 days is considered for all months including February irrespective of leap or non-leap year.
- 30 (US) - 30 days is considered for interest computation for all months except February where the actual number of days is considered.
- Working Days - To calculate the working days, branch holiday maintenance of the branch where loan is booked is considered. During fee calculation the days are calculated based on the working days.
Different values for the denominator of the fee basis are as explained below.
- 252- Number of days in a year is taken as 252 which is the number of working days.
- 360 - Number of days in a year is taken as 360 irrespective of actual number of calendar days.
- 365 - Number of days in a year is taken as 365 for leap as well as non-leap year.
- Actual - Actual number of days in a year is taken for interest calculation which is 366 for non-leap year.
- 365.25 - Number of days in a year is taken as 365.25 for leap as well as non-leap year.
Note:
- 252 fee basis is applicable for all schedule type like, bearing, Amortized, Discounted, and so on. There is no restriction in component level for the application of 252 basis.
- The system does not consider the currency holiday preference for working day calculation. It considers only the branch local holiday maintenance.
- No changes are done to fee basis available in currency definition screen.
- Fee accrual happens only for working days. The fee basis gets the number of days from the previous accrual date to the current accrual date. If there are no holidays in a month, even though denominator is 252, interest accrual happens till end of the month.
Parent topic: Defining fee components for a product