9.2.4.1 Impact of Liquidation Mode on Roll-Over

The mode of liquidation of a loan (automatic, semi-auto, or manual) has the following impact when the rollover is carried out:

• Auto liquidation and auto roll-over
  The old loan is liquidated and a new one initiated on the Maturity Date of the loan. It is processed during the BOD run of the Automatic Contract Update function. If the Maturity Date falls on a holiday then the liquidation and the rollover are processed, as per your holiday handling specifications in the Branch Parameters screen.

  • If you specified that processing has to be done today (the last working day before the holiday), then for automatic events, the schedule falling on the holiday, is liquidated today during End of Day processing.
  • If you specified that processing has to be done only up to the System Date (today), then only the events scheduled for today (the last working day before the holiday) are processed. The events falling on the holiday are processed on the first working day after the holiday, during Beginning of Day processing.
• Auto liquidation (of principal) and manual roll-over

  The old loan is liquidated automatically on the Maturity Date. If the loan has to be rolled-over, the instructions should be specified before the Maturity Date. At times the contract is not liquidated because of the lack of funds in the repayment account. In such cases you can give rollover instructions even after the maturity date, saying that the contract has to be rolled-over, as of the maturity date.

• Manual liquidation (of principal)

  Rollover has to be manual. The loan is not liquidated by the Auto Liquidation function. You can either liquidate it or specify that it has to be rolled-over. This can be specified at any time before or after the Maturity Date of the loan, if the contract has not yet been liquidated.

  If you have defined that the loan should be liquidated manually, you cannot roll it over automatically.
  When a loan is rolled-over or renewed for interest, charge or fee components, it can assume the following attributes:

  • Those of the product involving the loan being rolled-over.
  • Those of the old loan itself.
• Semi-auto liquidation

  The system processes all the events and waits for instructions from the user to send the necessary messages. The messages are held in the outgoing browser. These messages are payment messages and not advices or notices.

  In addition, the system displays only those semi-automatic contracts on which user confirmation is required to send out the messages for that respective event.

  The events INIT, LIQD, and ROLL are automatically processed by the system and it processes only the accounting entries. These events appear in the Forward Processing screen for the user to confirm whether the messages generated to be sent or not.

  If the user confirms the event on the value date, the messages are sent out immediately. Based on the confirmation received from the user, system releases these messages.