5.21.2.2 Payment Process

On saving the fronting details and funding details, system triggers the event SFNT. On confirmation and its authorization in the Payment Processing browser, system populates the payment infrastructure (if fund is sighted from borrower or if Fronting Option is chosen).

The event PPMT processes the payment accounting entries and sends payment messages to the investors. On capturing the details for the repayment event, this event is triggered on the borrower and all investor contracts, if fund is sighted from the borrower or fronting is set to Yes.

The event PPMT generates the Payment message for the Participant contract for the liquidated amount (Pro rata Share of the amount repaid by the Borrower).

In case the investor has not funded at the time of borrower repayment, the payment is not made to such investors and the net unfunded amount is reduced to the extent of expected payment amount for such investors as per their pro rate share.

In case of bank fronting the borrower payment, bank sighting fund GL is debited for the borrower amount and paid to the investors.

Fronting options at the borrower level only governs the payment to the investors and fronting option at the investor level does not have any significance for the borrower payments.

When the borrower payment is funded or fronted, the payment is made to all the investors (if they have fully funded).

In case of backdated and current dated payments, the accounting entries and payment messages match the current application date.

In case of bank fronting the borrower payment, upon fund sighted from the borrower, PPMT is triggered for the funded amount, but payment message is not generated for the amount already fronted by bank.

Multiple payments cannot be funded together. In case of multiple payments being funded on the same date, you have to capture each funding as a separate instruction.

Note:

You can view the events, BPMT and PPMT and the corresponding accounting entries and the payment messages through the Events sub screen in the Drawdown/Tranche Contract Online screen.

If fronting details have not been captured for the previous disbursement/repayment event, then the following will not be allowed:

• Capture of new payment instruction.
• Capture of new disbursement instruction (VAMI).
• Capture of new participant transfer instruction.
• Capture of new rollover/reprice instruction (In case of consol rollover/merge reprice, the fronting details should have been captured for all the contracts involved).

If Overwrite Settlement Instructions is yes at the time of BPMT/PPMT event triggering, accounting entries for BPMT/PPMT events are not passed to Customer Accounts; instead they are passed to the internal GLs mentioned in the Overwrite SI screen for the respective components.

In case if the borrower payment is made in multiple splits (based on number of investors funding), it has multiple BPMT events on different time frames. While triggering each of the BPMT events, the Overwrite SI is checked and accounting entries are passed accordingly.

The payable receivable processing is not be handled for sighting funds.

Sighting Fund Process (PPMT) is applicable for the Fee payments at the Tranche contract level. However, the fee computation remains the same.