4.28.1 Child Re-Price Transaction (Split)

You can enter below details in Child Re-Price Transaction (Split) section of the Renewal or Split Detail screen. For information on fields, refer to the field description table.

Table 4-43 Child Re-Price Transaction (Split) Details

Field Description
Product Select the product under which the child contract is to be created during re-pricing. The option list includes those products for which you have selected the box Re-Price Product in the Loans and Deposits Product – Preferences screen.
Amount Enter the amount of the split contract.

The sum total of the transaction amounts of all the child contracts can be less than, equal to, or greater than the outstanding principal amount of the parent contract. If the total amount of the child contracts (at the time of re-pricing) is greater than the outstanding principal balance, the system automatically initiates a VAMI (value dated amendment on the re-price date) on the parent contract for the differential amount. Thus, the difference amount is added to the principal amount before the system proceeds with re-pricing.
Currency The currency of the child contract is displayed here. You are not allowed to change the same. The currency of all child contracts are the same as that of the parent contract.
Maturity Type Select the maturity type of the contract from the drop-down list. You can select one of the following options:
  • Call – Select this option to re-price a term loan into a demand loan.
  • Fixed – Select this option to re-price a demand loan into a term loan.

(Note: The system defaults Fixed as maturity type. However, you are allowed to change it.)

You can differentiate a demand loan and a term loan through the maturity type of the transaction. The maturity type of a term loan is Fixed and for demand loan it is Call/Notice.

(Note: The system does not allow capitalized schedule type of demand loans to be re-priced to other non capitalized schedule type of products. It is applicable for Merge Re-price where only the parent contract is a demand loan. But it is not applicable for Notice type of loans.)

Reprice Amount The total reprice amount is displayed here and you cannot modify the same.
Maturity Date Enter the Maturity Date of the child contract here.
Transfer Parent Main Interest If you have selected Liquidate Principal and Interest check box, the interest amount can be acquired by a child contract. If you have not selected the check box, the interest amount remains with the parent contract.

The interest amount that can be acquired can be passed to one child contract only. You are not allowed to split the acquired interest amount among multiple child contracts. Select the Transfer Parent Main Interest? check box against a child contract to indicate the interest from the parent contract is acquired by that child contract.

When you select the Transfer Parent Main Interest, the system transfers the interest amount due or the difference of amount paid and amount due (if any overpayment exists) to the child contract. The transferred interest is due on the first schedule due date of interest. However,the acquired interest, of the child contract is allowed for liquidation before the schedule due date.
  • Transfer of fees is only allowed for Advance type of fees.
  • Transfer of Fees flag is disabled for back valued re-price.
  • Transfer of Fees is not allowed in case of split re-price into many contracts, partial re-price or merge re-price. The system does not perform any catch up accrual done for fee transferred as part of re-price.
  • If the parent contract has overpayment of interest, then the system transfers only the difference of amount paid and amount due into the child contract. This amount is not allowed for refund after the re-price is performed.
  • In case of back valued activity, the system performs a catch up accrual of fee before transferring the amount to the child contract. However, the amount displayed in Unamortized Amount vary from the actual amount transferred and accordingly the system displays an override.
  • The system displays an override in case of future dated re-price with transfer of unamortized fee amount.
Child Contract Ref. No The reference number of the child contract is displayed here.
Total Split Amount The total amount of all child contracts is displayed here.
Interest Details Click Interest Details button to enter interest related details and also RFR (Risk Free Rate) details. For more information on RFR, refer to Interest User Guide.

(Note: Disbursement Mode is Auto for child contract getting created as part of Split Reprice.)

Parent topic: Book Re-Price Transactions