9.6.1 Loan Rewrite using Consolidated Rollover

In loan rewrite, you can settle one or more original contracts while creating a new one that consists of due balances with a specific product. The loan rewrite is supported for the following types of loans.

• Bearing and Discounted methods
• Normal and Amortized schedule types

Table 9-2 Consolidated Rollover

Field	Description
Limitations	If rollover is for increased principal, then the disbursal happens to the main counter party contract.
Settlement Basis/Schedule Basis/MIS Basis/UDF Basis	You need to select Product option from Settlement Basis/Schedule Basis/MIS Basis/UDF Basis drop-down list. If the option Contract is selected, then the system displays the following error during save, Settlement Basis/Schedule Basis/MIS Basis/UDF Basis Cannot Be Contract as the Driver Contract Product Differs with The Header Product.
Product Code	In Product Code you can select the loan product, using which loan contracts need to be rolled over. It displays all products for which active contracts are available for the customer, branch and currency combination. You can select contract of different products while entering details of participating contracts.
Rollover Amount Type	You can either select Rollover Amount Type as Principal or Principal + Interest. If Principal is selected other components gets liquidated.
Driver Contract	The details other than that specified in Consolidation Rollover screen are fetched from the driver contract. For example the check list and linkage details are defaulted from the driver contract to the new contract (Note: IOF (The Financial Operations Tax ) is collected for the consolidated contract considering it as a new contract.)

Example

It is required to consolidate 2 contracts belonging to a customer with customer number, 029000114. Both have different products. Contract details are as given below:

Table 9-3 Contract 1

Contract 1	Details
Product	CLP1
Interest type	Linear
Interest rate	12%
Total Amount	100,000
Interest Basis	Actual/Actual

Table 9-4 Component Details

Component	Details
Principal	0
Principal Paid	50,000
Principal Overdue	25,000
Principal Expected	25,000

Table 9-5 Interest

Interest	Details
Interest Paid	2,600
Interest overdue	500

Table 9-6 Contract2

Contract 2	Details
Product	CLP2
Interest type	Amortized
Interest rate	10%
Total Amount	200,000
Interest Basis	Actual/360

Table 9-7 Component Details

Component	Details
Principal	0
Principal Paid	50,000
Principal Expected	150,000

Table 9-8 Interest

Interest	Details
Interest Paid	1,700

Let the below details be entered in consolidated rollover screen.

Table 9-9 Consolidated rollover screen entries

Rollover entries	Details
Product	CLP3
UDE Basis	User defined
Schedule Basis	Product

Table 9-10 UDE Details

UDE entries	Details
Interest Rate	9%

Table 9-11 Consolidate details

Contract number	Rollover Amount Type	Driver Contract
Contract1	Principal + Others	Yes
Contract2	Principal	No

On authorization of consolidated rollover screen the system does the following.

• Liquidate the Interest of the contract Contract2 by taking the settlement contract in contract payment details.
• Fire rollover event (ROLL) and pass accounting entries for ROLL event.
• Build the contract details for the new contract by using the branch, customer, currency, product given in header.
• Amount financed for the new contract is 200,500. Split up is given below
  • 50,500 from Contract1 which is the sum of Principal overdue, Principal expected, and Interest outstanding.
  • 150,000 from Contract2 which is the Principal outstanding.
  • Value date for the new contract is the value date given in Consolidation Rollover screen.
  • Interest rate for the new contract is 9%.
• Schedules are derived based on the product preference maintained for CLP3.
• New contract is in NORM status irrespective of the status of the participating contracts.
• Settlement contract details for the new contract is defaulted from the default settlement instructions maintained for the customer.