7.3.5 Specifying Liquidation Preferences

In the Liquidation Preferences screen, you have to select the following:

• Liquidation Mode
  Select the mode of liquidating the fee components under this fee class. You have the following options:

  • Auto - Select this option to indicate that fee is to be liquidated automatically. The system liquidates the components as per schedule due dates maintained for the contract.
  • Manual Liquidation - Select this option to indicate the fee is to be liquidated manually. In this case, you have to liquidate the fee through the Fee Liquidation screen.
  • For details on this screen, refer the heading Liquidating Fee Components in this chapter.
  • Semi-Auto – Select this option to indicate the fee is to be liquidated semi-automatically. If you select this option, forward processing is applicable to the fee. The fee liquidation event is processed as on due date, but the message is held in the Forward Processing Queue.
  For more information on forward processing, refer the heading Forward Event Processing in the Reference Information for Loan Syndication chapter of this User Manual.

Specifying Preferences for Fee Accrual

In the Accrual Preferences section, specify the following:

• Accrual Required

  You have the option to accrue the fee earned on syndication contracts. To do this, you have to select this option.

• Accrual Method

  If accrual is required, you can specify the accrual method. You can accrue a fee using any one of the following methods:

  • Straight Line: In this method of fee accrual, the fee amount is equally spread over the tenor from the fee calculation start date to the fee calculation end date of the loan or commitment.
  • Discount Accrual Method: In this method, accruals are done based on the balance and the repayment schedules of the contract.