Specifying the Maximum and Minimum Charge amount

Specifying the Maximum Amount

If the charge is based on a fixed rate, you should specify the maximum amount that can be applied on a contract involving the Rule ID. If the aggregate charge calculated using this Rule ID exceeds this amount for a contract, the maximum amount specified in this field is applied instead of the amount calculated using the fixed rate.

Example

The charge applicable for processing a loan is 0.05% of the outstanding loan amount. The maximum charge that can be applied is USD 10. Assume your customer Gem Granites has borrowed USD 30,000 as a loan.

The charge amount works out to USD 15 at 0.05%. However, since the maximum charge amount has been specified as USD 10, this is what is applied on the loan as charges.

Specifying the Minimum Amount

If the charge is based on a fixed rate, you should specify the minimum amount that can be applied on a contract involving the Rule ID. If the aggregate charge calculated using this Rule ID falls below this amount for a contract, the minimum amount specified in this field is applied instead of the amount calculated using the fixed rate.

Example

The processing charge applicable on a loan is 0.05%. The minimum charge that can be applied is USD 5. Assume your customer Gem Granites has taken a loan of USD 5,000.

The charge amount works out to be USD 2.5 at 0.05%. But since the minimum charge amount has been specified as USD 5, this is the amount that is applied on the loan as charge.

Specifying Slab Level Min/Max Amount Currency

You can indicate the currency in which the minimum charge / maximum charge should be applied at each slab. By default, the Basis Amount Currency is the Slab level Min/Max Amount Currency.

Example

Consider a Charges & Fees rule with the following attributes:

Rate Type = Fixed, Tenor Basis
Rule Currency = Charge Currency
Rule Amount Currency = INR

Charges

Table 1-3 Slab Floor Charge

Basis Amount	Charge	Slab Floor Charge
0 to 10,000	0.50%	5
10,000 to 20,000	0.40%	5
> 20,000	0.30%	5

Minimum Charge = INR 1000
Slab Level Min/Max Currency = USD
Basis Amount Currency = GBP
The currency conversion rates maintained are USD: GBP = 2, INR: GBP = 75, INR: USD = 50

For a loan of USD 350,000, the charges are calculated as follows.

GBP equivalent of USD 350,000 is 175,000

Table 1-4 Effective Charge

Slab	Charge(INR)	Equivalent Charge (USD)	Effective Charge (INR)
50,000	250	5	250
100,000	400	8	400
25,000	75	1.5	250#
-	-	Total	900

Note:

# INR Equivalent of minimum slab charge of USD 5.

Since the aggregate charge of INR 900 is less than minimum charge of INR 1000, the total charge that is levied for this loan is INR 1000