3.2.24 Tracking Status Changes for Loans

Oracle Lending allows you to process loan status changes by defining a separate GL/MIS reporting structure for accruals under delinquent loans. For normal loans, the following entries are passed during interest accrual:

• Debit IENC
• Credit Income

At liquidation, the entries passed are:

• Credit IENC
• Debit Customer Account

When a contract’s status deteriorates from Normal, all contracts involving the customer can be made to accrue into a different set of GLs, which are also referred to as Memo GLs instead of the regular IENC GL. When the loan moves from normal to a delinquent status you have the option of stopping accruals and redirecting future accruals into Memo GLs. Accruals in Memo GLs have the following entries:

• Debit Memo Accrual
• Credit Memo Accrual Offset

Real accruals can also be reversed, with catch-up taking place in Memo GLs. On normalization of contracts, memo accruals get reversed and the corresponding accrual amounts get booked into Real GLs, based on contract status rules.

If you are enabling this option for a loan product that you are defining ensure that you enable this option for your branch as well.

When the status of a loan is changed from NORM to a non performing status, the system transfer the HFS (Held for Sale) balance for the asset GL & HFS GL to the new GLs applicable for the status. And all the entries related to HFS balance are posted to the new GLs.

For details of how to set up Status Rules and associate a set of status codes with a product you can refer to the Products User Manual.