2.5 Calculating Interest for Interest Basis 30SPL/360

1. In case of new drawdown booking/rollover/value dated amendment, the principal and interest payment schedules should be defined either as Monthly, Quarterly or Bullet.
2. No other frequency is allowed for the new interest basis 30SPL/360.
3. In case of consolidated rollover or consolidated + split rollover, all the parent contracts being rolled over should be associated with the same interest basis method 30SPL/ 360.
4. In case of split rollover, the parent contract being rolled over should be associated with the same interest basis method 30SPL/360. However, a parent contract with the new interest basis 30SPL/360 can be split rolled to a child contract with any other interest basis.

   Note:

   The computation of interest based on the new interest basis is applicable only for the contracts where the new interest basis 30SPL/360 is selected.

   There is no impact in the existing contracts even if the new interest basis is added to the corresponding products. Only the new contracts created have the interest computation based on the new interest basis.

5. In LS module, amendment of interest rate basis from 30SPL/360 to other interest basis or from other interest rate basis to 30SPL/360 for main/PIK interest component is allowed only as part of contract amendment (CAMD). You are not allowed to amend the interest basis as part of value dated amendments (VAMI).However, the system validates that there should not be any of the below financial events processed in the contract when user changes the interest basis as part of CAMD. If the validations are failed, the system displays appropriate error messages.
   • Value dated amendment (future/backdated) for principal amount change (VAMI)
   • Value dated amendment (future/backdated) for maturity date change (VAMI)
   • Liquidation/Payment (LIQD) - future/backdated
   • Participant Ratio Amendment (PRAM)
   • Future dated rollover/split rollover/consolidated rollover
   • Future dated split/merge reprice

   Note:

   Contract amendment can be processed in Oracle Banking Corporate Lending only from the value date of the contract. Hence the change in interest basis method by means of CAMD is effective from the value date itself and the computation is revised from the value date.
6. OL module, amendment of interest rate basis from 30SPL/360 to other interest basis or from other interest rate basis to 30SPL/360 for main/PIK interest component is allowed only as part of value dated amendment (VAMI). However, the system validates that there should not be any of the below financial events processed in the contract when you change the interest basis as part of VAMI. If the validations are failed, the system display appropriate error messages.
   • Value dated amendment (future/backdated) for principal amount change (VAMI)
   • Value dated amendment (future/backdated) for maturity date change (VAMI)
   • Liquidation/Payment (LIQD) - future/backdated
   • Future dated split/merge reprice

   Note:

   When the user amends the interest basis through value dated amendment screen, system validates if the amendment date is equal to the value date of the contract. If the validation is failed, appropriate error messages are displayed.
7. Split and Cosol reprice are not allowed if interest basis is 30SPL/360 for OL module.
8. Split Reprice functionality is allowed in LS module for all LS drawdown contracts where the new interest basis 30SPL/360 is selected. Merge reprice is not allowed in LS module. You are allowed to perform split reprice for the LS drawdown contracts with the same amount as the parent contract or reprice with increased / decreased amount. However, the split reprice can be done only with the value date as the maturity date of the LS drawdown contract.
9. When you perform, split reprice with decrease for LS drawdown contracts where the new interest basis 30SPL/360 is selected, the Liquidate Principal check box need not be selected mandatorily. If the Liquidate Principal check box is not selected and reprice with decrease is done, the parent contract is left active. However, any further payments done on the contract is allowed only for the maturity date of the contract. Appropriate error message is displayed if any further payments are not done on the maturity date of the contract.
10. The interest basis for the child drawdown contracts are defaulted from the Interest Basis field selected for each of the child contracts in the LS Split Reprice screen. However, you are allowed to change the interest basis for the child contract through CAMD as per the existing functionality.
11. You are not allowed to select the interest basis as 30SPL/360 for the child contracts in the LS split reprice screen if the parent contract being repriced is not associated with the new interest basis 30SPL/360. However, a parent contract with the new interest basis 30SPL/360 can be repriced to a child contract with any interest basis.
12. In the LS split reprice screen, you are not allowed to select the Liqd Int On Prepayment check box for the contracts where the new interest basis 30SPL/360 is selected.
13. You are not allowed to select the Liqd Interest on Prepayment check box for a drawdown contract when the new interest basis 30SPL/360 is selected either for the main interest or PIK interest component. Similarly, you are not allowed to select the new interest basis 30SPL/360 for the main interest or PIK interest component when the Liqd Interest on Prepayment check box is selected.

    Note:

    You are allowed to change the interest basis from 30SPL/360 to another interest basis as part of CAMD from the value date of the contract and simultaneously select the Liqd Interest on Prepayment check box.
14. You are not allowed to select the Partial Interest Payment Allowed check box in the LS drawdown contract online screen when the new interest basis 30SPL/360 is selected. Similarly, you are not allowed to select the new interest basis 30SPL/360 when the Partial Interest Payment Allowed check box is selected.
15. You are not allowed to prepay principal / interest for the contracts where the new interest basis 30SPL/360 is selected.
16. You are not allowed to do full / partial payment of principal for contracts with new interest basis 30SPL/360 if theLiqd of Int on Prepaid Principal check box is selected in the manual payment screen in both the LS module.
17. You are allowed to do partial / full principal payment in the contracts where new interest basis 30SPL/360 is selected, but only on the maturity date / schedule due date of the contracts. Partial principal prepayments are not allowed and appropriate error messages are displayed. You are allowed to pay the interest amount only in full when full / partial principal payment is done on the maturity / schedule due date of the contracts.
18. In the LS and OL manual payment screens, if you enter the limit date as the maturity date of the contract, the total principal + interest payment which is due till maturity date (including the overdue schedules) is populated in the field Amount Paid as per the existing functionality. However, you are allowed to do full/partial principal payment only to the extent of the total principal due till the value date entered in the manual payment screen. If you enter a greater amount, appropriate error messages are displayed.
19. If you enter the limit date as the schedule due date of the contract, the total principal payment which is due till the schedule due date entered (including the overdue schedules) is populated in the field ‘Amount Paid’ as per the existing functionality. However, you are allowed to do full/partial principal payment only to the extent of the total principal due till the value date entered in the manual payment screen. If you enters a greater amount, appropriate error messages are displayed.

    The computed interest is applied while processing the below events for OL/LS module.

    Module	Event Code	Description	Remarks
    OL	DSBR	Disbursement	Interest is computed with the new interest basis and the schedule details are populated accordingly.
    OL	ACCR	Loan interest accrual	Accruals are posted using the interest amount computed with the new interest basis.
    OL	VAMI	Value dated amendment on loan contracts	When the principal amount, interest rate, interest basis or maturity date is changed in a contract as part of value dated amendments, interest computation is revised.
    OL	ROLL	Split rollover processing	New Interest basis selected in the split rollover screen is defaulted to the child contracts and interest computation is done.
    OL		Consolidated rollover processing	New Interest basis selected in the consolidated rollover screen is defaulted to the child contract and interest computation is done. All parent contracts should have the same (30SPL/360) interest basis.
    OL		Consolidated + split rollover processing	All parent contracts should have the same (30SPL/ 360) interest basis. The child is defaulted with the interest basis selected in the consolidated rollover screen.
    OL	LIQD	Loan Payment	The main interest component which is computed with the new interest basis is liquidated as part of LIQD.

    Module	Event Code	Description	Remarks
    LS	INIT	New drawdown booking	Interest is computed with the new interest basis and the schedule details are populated accordingly.
    LS	CAMD	Drawdown amendment	When the interest basis is amended as part of contract amendment, the computation is revised as per the new interest basis from the value date of the contract.
    LS	LIQD	Drawdown repayment	The main interest component which is computed with the new interest basis is liquidated as part of LIQD.
    LS	VAMI	Value dated amendment on drawdown contracts	When the principal amount or maturity date is changed in a contract as part of value dated amendments, interest computation is revised.
    LS	MRFX	Margin rate revision	When margin rate is revised, interest computation is revised.
    LS	ROLL	Drawdown split rollover processing	New Interest basis selected in the split rollover screen is defaulted to the child contracts and interest computation is done.
    LS		Drawdown consolidated rollover processing	New Interest basis selected in the consolidated rollover screen is defaulted to the child contract and interest computationis done. All parent contracts should have the same (30SPL/360) interest basis.
    LS		Drawdown consolidated + split rollover processing	All parent contracts should have the same (30SPL/ 360) interest basis. The child is defaulted with the interest basis selected in the consolidated rollover screen.
    LS	IRFX	Drawdown interest rate fixing	Interest is computed with the new interest basis and the schedule details are populated accordingly.
    LS	IRAM	Drawdown interest rate amendment	When interest rate is amended for a contract having new interest basis, interest is recomputed and the schedule details are populated accordingly.
    LS	PRAM	Participant amendment processing	When participant ratio amendment is done, the interest computation is revised.
    LS	INIT	New loan booking	Interest is computed with the new interest basis and the schedule details are populated accordingly.
    LS	ACCR	Loan interest accrual	Accruals are posted using the interest amount computed with the new interest basis.
    LS	VAMI	Value dated amendment on loan contracts	When the principal amount, interest rate, interest basis or maturity date is changed in a contract as part of value dated amendments, interest computation is revised.
    LS	LIQD	Loan Payment	The main interest component which is computed with the new interest basis is liquidated as part of LIQD.

    Example 1: (Partial principal payment on contract with only 1 bullet schedule)

    • Value date: 10-Jan-2019
    • Maturity date: 10-Jun-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 151
    • Number of Calendar Months: 6-1 = 5
    • Computation Days: 5 * 30 = 150
    • Interest Amount: 100,000 * 150 * 2% / 360 = 833.33
    • Daily Accrual Amount: 833.33/151 = 5.52
    • Schedule 1: Bullet (10-Jan-2019 to 10-Jun-2019)
    • Interest Due: 833.33
    • Principal Due: 100,000.00
    • Total Due: 100,833.33

    In this example, if you want to partially pay the principal, you should enter the value date, limit date and schedule date as 10-Jun-2019. This populates the amount as 100,833.33. You are allowed to modify the amount field to any value below 100,000.00.
    Example 2: (Partial principal payment on contract with 4 monthly and 1 bullet schedules)

    • Value date: 10-Jan-2019
    • Maturity date: 10-Jun-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • No of Schedules: 4 Monthly + 1 Bullet
    • Interest Computation (monthly):100,000 * 30 * 2% / 360 = 166.66
    • Schedule 1: Monthly (10-Jan-2019 to 10-Feb-2019)
    • Total Due: 20,000.00 + 166.66 = 20,166.66
    • Schedule 2: Monthly (10-Feb-2019 to 10-Mar-2019)
    • Total Due: 20,000.00 + 166.66 = 20,166.66
    • Schedule 3: Monthly (10-Mar-2019to 10-Apr-2019)
    • Total Due: 20,000.00 + 166.66 = 20,166.66
    • Schedule 4: Monthly (10-Apr-2019to 10-May-2019)
    • Total Due: 20,000.00 + 166.66 = 20,166.66
    • Schedule 5: Bullet (10-May-2019 to 10-June-2019)
    • Total Due: 20,000.00 + 166.66 = 20,166.66

    In this example, if you want to partially pay the principal till Schedule 4 (previous schedules unpaid), you should enter the value date, limit date and schedule date as 10-May-2019. This populates the amount as 80,666.64. You are allowed to modify the amount field to any value below 80,666.64.
    The interest computation considers the number of days as per the below logic.

    • For monthly schedules below changes are done.
    • Number of days for interest computation are arrived as 30 for all monthly interest/ principal payment schedules.
    • The calculated interest is accrued over the actual number of days between the value date and maturity date of the contract. The interest computation and accrual are proportionate if the actual number of days for the monthly schedule is 30.

    Example

    • Value date: 15-Jan-2019
    • Maturity date: 16-Feb-2019
    • Actual no of days: 31
    • Computation days: 30
20. For quarterly schedules below changes are done,
    • Number of days for interest computation are arrived as 90 for all quarterly interest/ principal payment schedules.
    • The calculated interest is accrued over the actual number of days between the value date and maturity date of the contract. The interest computation and accrual are proportionate if the actual number of days for the quarterly schedule is 90.
    Example

    • Value date: 10-Apr-2019
    • Maturity date: 10-Jul-2019
    • Actual no of days: 91
    • Computation days: 90
21. For bullet schedules below changes are done.
    • OBCL calculates the number of calendar months between the value date and maturity date of the contract, excluding the calendar month of the value date. The number of calendar months derived are then be multiplied by 30 to arrive the total number of computation days.
    • The calculated interest is accrued over the actual number of days between the value date and maturity date of the contract. The interest computation and accrual are proportionate if the actual number of days is multiple of 30.
    Example 1: (Actual number of days is greater than computation days)

    • Value Date: 15-Jan-2019
    • Maturity Date: 25-Apr-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 100
    • Number of Calendar Months: 4-1 = 3
    • Computation Days: 3 * 30 = 90
    • Interest Amount: 100,000 * 90 * 2% / 360 = 500
    • Daily Accrual Amount: 500/100 = 5
    Example 2: (Actual number of days is less than computation days)

    • Value Date: 15-Jan-2019
    • Maturity Date: 10-Apr-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 85
    • Number of Calendar Months: 4-1 = 3
    • Computation Days: 3 * 30 = 90
    • Interest Amount: 100,000 * 90 * 2% / 360 = 500
    • Daily Accrual Amount: 500/85 = 5.88
    Example 3: (Actual number of days is less than computation days)

    • Value Date: 15-Jan-2019
    • Maturity Date: 10-Feb-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 26
    • Number of Calendar Months: 2-1 = 1
    • Computation Days: 1 * 30 = 30
    • Interest Amount: 100,000 * 30 * 2% / 360 = 166.66
    • Daily Accrual Amount: 166.66/26 = 6.41

    However, the amount which is accrued daily is arrived as interest computed / actual number of days in this example.
    Example 4: (Value date and maturity date in same calendar month)

    • Value Date: 01-Jan-2019
    • Maturity Date: 25-Jan-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 24
    • Computation Days: 24
    • Interest Amount: 100,000 * 24 * 2% / 360 = 133.33
    • Daily Accrual Amount: 133.33/24 = 5.55

    Note:

    If the value date and maturity date of the contract is within the same calendar month, then the interest is computed for the actual number of days between value date and maturity date
22. In cases where the schedules are defined as monthly + bullet (last schedule), below changes are done,
    • Number of days for interest computation are arrived as 30 for all monthly interest/ principal payment schedules
    • For the last bullet schedule, if the schedule start date and maturity date of the contract falls in different calendar months, OBCL calculates the number of calendar months between the schedule start date and maturity date of the contract, excluding the calendar month of the schedule start date. The number of calendar months derived are then be multiplied by 30 to arrive the total number of computation days.
    • For the last bullet schedule, if the schedule start date and maturity date of the contract falls in the same calendar month, then the interest is computed for the actual number of days between the schedule start date and maturity date of the contract.
    • The calculated interest is accrued over the actual number of days between the schedule start date and maturity date of the contract. The interest computation and accrual are proportionate if the actual number of days is multiple of 30.
    Example 1: 3 Monthly + 1 Bullet Interest Payment Schedules (Bullet schedule start date & end date in different calendar months)

    • Value Date: 15-Jan-2019
    • Maturity Date: 10-May-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 116
    • No of Schedules: 3 Monthly + 1 Bullet
    • Interest Computation (monthly): 100,000 * 30 * 2% / 360 = 166.66
    • Schedule 1: Monthly (15-Jan-2019 to 15-Feb-2019)
      • Daily Accrual Amount: 166.66 / 31 = 5.37
      • Interest Due 166.66
    • Schedule 2: Monthly (15-Feb-2019 to 15-Mar-2019)
      • Daily Accrual Amount: 166.66 / 29 = 5.74
      • Interest Due 166.66
    • Schedule 3: Monthly (15-Mar-2019 to 15-Apr-2019)
      • Daily Accrual Amount: 166.66 / 31 = 5.37
      • Interest Due 166.66
    • Schedule 4: Bullet (15-Apr-2019 to 10-May-2019)
      • Interest Computation (bullet): 100,000 * 30 * 2% / 360 = 166.66
      • Daily Accrual Amount: 166.66 / 25 = 6.66
      • Interest Due 166.66
    Example 2: 3 Monthly + 1 Bullet Interest Payment Schedules (Bullet schedule start date & end date in the same calendar month)

    • Value Date: 15-Jan-2019
    • Maturity Date: 28-Apr-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 104
    • No of Schedules: 3 Monthly + 1 Bullet
    • Interest Computation (monthly): 100,000 * 30 * 2% / 360 = 166.66
    • Schedule 1: Monthly (15-Jan-2019 to 15-Feb-2019)
      • Daily Accrual Amount: 166.66 / 31 = 5.37
      • Interest Due 166.66
    • Schedule 2: Monthly (15-Feb-2019 to 15-Mar-2019)
      • Daily Accrual Amount: 166.66 / 29 = 5.74
      • Interest Due 166.66
    • Schedule 3: Monthly (15-Mar-2019 to 15-Apr-2019)
      • Daily Accrual Amount: 166.66 / 31 = 5.37
      • Interest Due 166.66
    • Schedule 4: Bullet (15-Apr-2019 to 28-Apr-2019)
      • Interest Computation (bullet): 100,000 * 13 * 2% / 360 = 72.22
      • Daily Accrual Amount: 72.22 / 13 = 5.55
      • Interest Due 72.22
23. In cases where the schedules are defined as quarterly + bullet (last schedule), below changes are done,
    • Number of days for interest computation is arrived as 90 for all quarterly interest/ principal payment schedules
    • For the last bullet schedule, if the schedule start date and maturity date of the contract falls in different calendar months, OBCL calculates the number of calendar months between the schedule start date and maturity date of the contract, excluding the calendar month of the schedule start date. The number of calendar months derived are then be multiplied by 30 to arrive the total number of computation days.
    • For the last bullet schedule, if the schedule start date and maturity date of the contract falls in the same calendar month, then the interest is computed for the actual number of days between the schedule start date and maturity date of the contract.
    • The calculated interest is accrued over the actual number of days between the schedule start date and maturity date of the contract. The interest computation and accrual are proportionate if the actual number of days is multiple of 90 for quarterly schedules or multiple of 30 for the last bullet schedule.
    Example 1: 2 Quarterly + 1 Bullet Interest Payment Schedules (Bullet schedule start date & end date in different calendar months)

    • Value Date: 10-Jan-2019
    • Maturity Date: 10-September-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 243
    • No of Schedules: 2 Quarterly + 1 Bullet
    • Interest Computation (quarterly):100,000 * 90 * 2% / 360 = 500.00
    • Schedule 1: Quarterly (10-Jan-2019 to 10-Apr-2019)
      • Daily Accrual Amount: 500.00 / 90 = 5.55
      • Interest Due 500.00
    • Schedule 2: Quarterly (10-Apr-2019 to 10-Jul-2019)
      • Daily Accrual Amount: 500.00 / 91 = 5.49
      • Interest Due 500.00
    • Schedule 3: Bullet (10-Jul-2019 to 10-Sep-2019)
      • Interest Computation (bullet): 100,000 * 60 * 2% / 360 = 333.33
      • Daily Accrual Amount: 333.33 / 62 = 5.37
      • Interest Due 333.33
    Example 2: 2 Quarterly + 1 Bullet Interest Payment Schedules (Bullet schedule start date & end date in the same calendar month)

    • Value Date: 10-Jan-2019
    • Maturity Date: 28-Jul-2019
    • Principal: 100,000.00
    • Interest Rate: (1.5% + 0.5%) = 2%
    • Actual no of days: 199
    • No of Schedules: 2 Quarterly + 1 Bullet
    • Interest Computation (quarterly):100,000 * 90 * 2% / 360 = 500.00
    • Schedule 1: Quarterly (10-Jan-2019 to 10-Apr-2019)
      • Daily Accrual Amount: 500.00 / 90 = 5.55
      • Interest Due 500.00
    • Schedule 2: Quarterly (10-Apr-2019 to 10-Jul-2019)
      • Daily Accrual Amount: 500.00 / 91 = 5.49
      • Interest Due 500.00
    • Schedule 3: Bullet (10-Jul-2019 to 28-Jul-2019)
      • Interest Computation (bullet): 100,000 * 18 * 2% / 360 = 100.00
      • Daily Accrual Amount: 100.00 / 18 = 5.55
      • Interest Due 100.00