12.4 Linking a Loan to a Commitment

A loan can be linked to a deposit, commitment or an account. A linkage of this nature with a commitment means:

• You can utilize the entire amount of a commitment, or a portion of it, for a loan. The available balance in the commitment is reduced from the commitment.
• You can also link a portion of the loan to the commitment.

The contingent entries that were passed when the commitment was initialized are reversed for the loan amount that has been linked.

A commitment can be linked to more than one loan, as long the amount is available for utilization.

To specify the details of the linkage you have to invoke the Contract Linkages screen.

This topic contains following sub-topics:

• Specifying the Details of the Linkage
  
• Specifying the Linked Amount
  
• Specifying the Exchange Rate
  
• The Converted Link Amount
  
• Type and Total Linked Amount for each Type
  
• Uncovered Amount
  
• Accounting Entries for a Linkage
  
• Commitment Linkage Amendment
  
• Processing Commitment Linkage Changes
  
• Defining Schedules for Reduction of Commitment Amounts