2.2 Covenant Maintenance Feature

This feature helps the bank user to create and view the covenant master details.

Steps to create covenant master details

1. Login to OBCFPM. Enter your User Name, Password and click Sign In.

   Figure 2-1 Login Screen

   
   

   

   
   
2. Navigate to Credit Facilities > Maintenance > Covenant Maintenance > Create Covenant Master Details from the left menu.
   The Create Covenant Master Details - Covenant Details screen is displayed.

   Figure 2-2 Create Covenant Master Details - Covenant Details- Financial

   
   

   

   
   

   Figure 2-3 Create Covenant Master Details - Covenant Details- Financial - Tracking Custom Days

   
   

   

   
   

   Figure 2-4 Create Covenant Master Details - Covenant Details- Non Financial

   
   

   

   
   
3. Specify all the details in Create Covenant Master Details - Covenant Details screen.
   For field level information, refer the below table.

   Table 2-1 Create Covenant Master Details - Covenant Details - Field Description

   Field	Description
   Covenant Code	Specify a unique code for the covenant.
   Covenant Name	Specify the name for covenant.
   Covenant Description	Provide a brief description about the covenant.
   Classification Type	Select Classification Type for the covenant. The options available are: External- External covenants are informed to the customer. Internal- Internal covenants are not informed to the customer and are tracked internally by the bank.
   Covenant Type	Select Covenant Type from the drop-down list. The options available are: Financial-The compliance of these covenant generally is determined by the financial performance of the customer as documented in the periodic financial documents like P&L, Balance Sheet, etc. Non Financial- Non Financial compliance is determined from non financial documents like Insurance premium document, work order, etc.
   Covenant Sub Type	If Non-Financial is selected as Covenant Type , the Covenant Sub Type field is displayed. Select Covenant Sub Type from the drop-down list. The options available include but are not limited to: Asset Sale Covenants Cash Payout Covenants Investment Expenditure Management, control and ownership Operating Activity Others Preservation of Collateral/Seniority Reporting and Disclosure Stock Statement
   Linkage Type	Select Linkage Type from the drop-down list. The options available include but are not limited to: Collateral Customer Facility
   Tracking Frequency	Select Tracking Frequency for the covenant. The options available include but are not limited to: Custom Fort Nightly Half Yearly Monthly Quarterly Weekly Yearly
   Tracking Custom Days	Enter Tracking Custom Days. Note: Tracking Custom Days field is displayed only if Tracking Frequency is selected as Custom .
   Notice Days	Specify Notice Days for the Covenant. The system will generate the covenant tracking task before the specified notice days from covenant due date.
   Monitoring Information	Click and select Monitoring Information from the list of information defined in the Monitoring Information Maintenance. The system will use the selected Monitoring Information to derive covenant compliance status.
   Deferred Days	Enter Deferred Days. By deferring the user can defer the compliance check of the covenant by a specified number of days.

4. Expand Formula Details section. The Formula Details screen is displayed.

   Figure 2-5 Formula Details

   
   

   

   
   
5. Specify all the details. For field level information, refer the below table.

   Table 2-2 Create Covenant Master Details - Formula Details - Field Description

   Field	Description
   Variables	Select Variables from the drop-down list. It takes the elements of monitoring information selected.
   Operators	Select the Operation to be performed on the selected variable.
   Custom Value	Specify Custom Value or select another Variable.
   Formula	The Formula Panel dynamically builds the Formula based on the selected / provided Variables, Operators and Custom Value.
   Clear All	To clear the built formula, click Clear All.
   Formula Is Valid	To check if the formula is valid, view Formula Is Valid value.
   Build Formula	After adding the required operators and variables, click Build Formula to confirm the built formula.
   Covenant Target Condition	Select Covenant Target from the drop-down list. The options are: Between Equal to Greater than Greater than or equal to Less than Less than or equal to
   Target Type	Select Target Type from the drop-down list. The options are: Amount Percentage Ratio Note: If Target Type is selected as Amount, then Currency field is displayed by default and it takes the Branch currency as its value. For Percentage and Ratio option, Currency field is not displayed.
   Target From Value	Specify Target From Value. For example: If 100 is entered in Target From Value field and Percentage is selected as Target Type, then the target from value is considered as 100 %.

   The result of calculation performed using the built formula must satisfy the Covenant Target Condition with respect to the Target From Value.

   The covenant is breached, if the calculation result does not satisfy the Covenant Target Condition with respect to the Target From Value.

6. To save the master details, click Save in the Create Covenant Master Details - Covenant Details screen.
7. To view the added covenant master details, navigate to Credit Facilities > Maintenance > Covenant Maintenance > View Covenant Master Details from the left menu.

   Figure 2-6 View Covenant Master Details

   
   

   

   
   
8. Double click on the required tile.
   The Covenant Master Details screen is displayed.

   Figure 2-7 Covenant Master Details

   
   

   

   
   
9. To edit the covenant details, click Unlock and modify the necessary details.

   Note:

   In order to link a covenant with an application, the covenant must be authorized by the Approver by clicking Authorize.