1.1 Loan Syndication
The Loan Syndication modules of Oracle Banking Corporate Lending address loan operations of a bank or a financial institution that enters into loan syndication contracts with borrowing customers (borrowers).
The loan syndication modules are the Syndication Facility (FC), Syndication Borrower (LB) and Syndication Participant (LP) modules.
A syndication agreement is reached between a borrower and a bank (or a financial institution), which arranges the syndication. The arranger bank identifies one or more banks or financial institutions that pool funds to meet the borrowing requirements. These banks or institutions are known as participants.
The arranger bank actually disburses the loan, after receiving the contributions of the other participants. The participants in the syndication share the interest and other income accruing from the loan, in the ratio of their participation that was agreed upon at the time of drawing up the loan syndication agreement.