5.5 Processing Revaluation of Drawdowns

When you initiate a new drawdown, Oracle Banking Corporate Lending checks whether revaluation is applicable for the drawdown. If selected, it arrives at the revaluation schedule dates based on the following:

• Value Date
• Revaluation Frequency
• Start Month
• Start Day
• Holiday Treatment for Schedules

Even if revaluation schedules have been defined with the Start Date as the Value Date, you have to manually fix the exchange rate at the time of booking the contract.

For more details, refer the heading Fixing exchange rate for drawdown currency in this chapter.

During EOD batch, system checks if there is a revaluation schedule for any drawdown. If revaluation is due, system further checks if the rate is already fixed for the current date (Manual Exchange Rate Fixing). If it is already fixed, system skips the revaluation process and considers only the next revaluation date for subsequent revaluations.

However, if you have fixed the exchange rate on the value date as part of contract initiation, and revaluation schedules have been defined with the Start Date equal to the Value Date, system again does a revaluation as part of EOD batch on the Value Date. The rate derived for the Rate Code and Rate Type combination at the time of running the batch, is used for revaluation. System uses this rate to convert the amount in the drawdown currency into its equivalent in the tranche currency.

Note:

• If you do not fix the exchange rate for the current date when revaluation is due, system fetches the exchange rate for the Rate Code and Rate Type combination maintained as part of revaluation preferences. It automatically triggers the exchange fixing event (EXFX) with the rate fixing start date as the current application/system date and the end date as the next revaluation schedule date minus one.
• If revaluation fails due to the non availability of the rate or if the new rate is resulting in a negative availability, system logs the exception and proceeds with the batch process. During the next day’s batch process, system checks for revaluations with ‘Failed’ status. If available, it attempts for the revaluation event. Upon successful revaluation, it updates the status of the failed schedules as ‘Processed’ with the Applied Date equal to the revaluation date. However, once the current application date becomes equal to the next revaluation schedule date, system does not consider the lapsed revaluation schedule as part of the EOD Batch.
• The system selects the contracts for revaluation in the order of their Contract Reference Number. So, if there is more than one drawdown linked to a tranche, system revaluates the earliest drawdown first. In such cases, you may have a scenario where the first drawdown was revalued successfully but subsequent drawdowns could not be revalued as a result of the utilization exceeding the tranche available amount.

Once auto revaluation commences, you cannot do a manual rate fixing till the end date of that schedule.