1. Enterprise Limits and Collateral Management Common User Guide
  2. Limits and Collateral
  3. Customer Covenant Linkage
  4. Covenant Maintenance

2.15.1 Covenant Maintenance

This topic describes about the procedure to maintain covenant.

  1. On Customer Covenant Linkage screen, click Covenant tab.
    The Covenant Maintenance screen displays.

    Figure 2-44 Covenant Maintenance


    Description of Figure 2-44 follows
    Description of "Figure 2-44 Covenant Maintenance"

    For more information on fields, refer to the field description table.

    Table 2-40 Covenant Maintenance - Field Description

    Field Description
    Covenant Name Click the Search icon and select the covenant name for linking with the customer. Covenants maintained in the Covenant Maintenance screen GEDCOVNT are displayed in the list of values.
    Description Displays the description of the covenant based on the name selected.
    Mandatory The mandatory field for the covenant, as maintained in the Covenant Maintenance screen gets defaulted here based on the Covenant Name selected.
    Covenant Reference Number Specify the reference number for the covenant to be linked.
    Start Date Start date indicates the effective date of covenant for the particular customer.

    Start date will get defaulted to current business date when covenant is linked to a collateral linkage date. User can change the start date, if required.

    Note:
    • Start Date cannot be back date
    • Start Date can be current date or future date Start Date cannot be greater than the collateral / facility expiry date
    • Start Date cannot be modified after saving and authorizing the customer covenant record. This is applicable for current dated as well as future dated covenants
    End Date Specify the end date of covenant. This is not mandatory. After the end date, covenant tracking or notification generation is not applicable.

    The system performs certain validations for covenant end date as shown below based on the dependencies like Frequencies and Review/Notice/Grace days.

    For more information on Frequencies and Review/Notice/Grace days, refer Table 2-41.

    Frequency Frequency of the selected covenant is defaulted here based on the details maintained at Covenant Maintenance screen GEDCOVNT. User can change the frequency to any of the following:
    • Yearly
    • Half Yearly
    • Quarterly
    • Monthly
    • Weekly
    • Daily
    • Custom
    • Fortnightly
    Custom Days Specify the custom days for covenant tracking, if Custom is selected as Frequency.

    For example, If the frequency is defined as Custom and Custom Days is specified as 20, then frequency will be once in 20 days.

    Note: Custom days value can be minimum 1 to maximum 999.

    Start Month Specify the covenant start month.

    Note: Start month cannot be selected without selecting the Due date.

    Due date Specify the covenant due date.

    Note: Due date can be selected without selecting the start month.

    Review Date Indicates the date on which covenant has to be revisited for review.
    The system derives the first review date based on below combinations and updates when the covenant is saved.
    • Start Date + Frequency (if Start Month and Due Date are not provided)
    • Start Date + Combination of Start Month and Due Date (if Start Month and Due Date both are provided along with Frequency).
      • If Start Month and Due Date are > current application date, then Review Date = Due Date, start month of current year.
      • If Start Month and Due Date <= current application date, then Review Date = Due Date, start month of next year.

    Note: The system notifies the user if the computed review date falls in the next year.

    • Start Date + Due Date (if only Due Date is provided along with Frequency)
      • If Due Date > current application date, then Review Date = Due Date of current month.
      • If Due Date <= current application date, then Review date = Due Date of next month.
    • Subsequent Review date gets updated based on the first Review Date + Frequency specified.

    For more information on Examples for the Review date calculation of different frequencies and combinations, refer Table 2-42.

    Notice Days Notice days, that is, the number of days prior to revision date of the covenant gets defaulted from GEDCOVNT screen. Notice days are mandatory when frequency is custom, fortnightly, weekly and above. Covenant is available for tracking in its notice days.
    Note:
    • Notice days must be less than the Custom Days in case Custom Days is selected as Frequency. In case the Custom Days value is 1, the system does not allow to capture Notice days.
    • Notice days can be a maximum of 30 days even if the Custom Days is more than 30 days.
    • If Fortnightly is selected as Frequency, the notice days must be less than 14 days.
    Grace Days The grace days for the covenant, as maintained in the Covenant Maintenance screen gets defaulted here based on the Covenant Name selected. This can later be linked to Collaterals Maintenance screen GCDCOLLT for choosing the collateral category while maintaining the collateral.
    Note:
    • Grace days must be less than the Custom Days in case Custom Days is selected as Frequency. In case the Custom Days value is 1, the system does not allow to capture Grace days.
    • Grace Days can be a maximum of 30 days even if the Custom Days is more than 30 days.
    • If Fortnightly is selected as Frequency, the grace days must be less than 14 days.
    Classification Type Covenant classification type is defaulted from the Covenant Maintenance screen GEDCOVNT on selecting covenant. User can modify this, if required.
    Linkage Type Linkage type is defaulted as Facility, Collateral, or Customer based on the covenant selected.
    Covenant Sub Type This is applicable only for non-financial covenant types and is defaulted from covenant maintenance GEDCOVNT screen on selecting covenant. You cannot modify this.
    Covenant Type Covenant type is defaulted from the Covenant Maintenance screen GEDCOVNT on selecting covenant. User cannot modify this.
    Formula Formula for arriving at covenant condition gets defaulted from GEDCOVNT on selecting the covenant.
    Covenant Target Condition The covenant target condition gets defaulted on selecting the covenant. User can also select any of the following options from the drop down list.
    • Greater than or equal to
    • Between
    • Less than
    • Greater than
    • Equal to
    • Less than or equal to
    • Less than
    Target Type This field gets defaulted from GEDCOVNT on selecting the covenant.
    Target from value This field gets defaulted from GEDCOVNT on selecting the covenant.
    Target to value This field gets defaulted from GEDCOVNT on selecting the covenant.
    Currency This field gets defaulted from GEDCOVNT on selecting the covenant.
    Remarks Specify the remarks about the covenant details for collateral category maintenance.
    Monitoring Information Id This field gets defaulted from GEDCOVNT on selecting the covenant.
    Monitoring Information Description This field gets defaulted from GEDCOVNT on selecting the covenant.

    Table 2-41 Frequencies and Review/Notice/Grace days

    Business date Start date Frequ ency Review date Notice days Notice date End date existing Modified end date Modification Remarks
    13TH OCT 10TH OCT MONT HLY 10TH NOV 5 5TH NOV NIL 10TH JAN ALLOWED Signifying new end date is allowed
    13TH OCT 10TH OCT MONT HLY 10TH NOV 5 5TH NOV 10TH JAN NIL ALLOWED Removing existing end date is allowed
    13TH OCT 10TH OCT MONT HLY 10TH NOV 5 5TH NOV 10TH JAN 10TH MAR ALLOWED -
    13TH OCT 10TH OCT MONT HLY 10TH NOV 5 5TH NOV 10TH JAN 1ST DEC ALLOWED Last covenant will fall due on 10th November
    13TH OCT 10TH OCT MONT HLY 10TH NOV 5 5TH NOV 10TH JAN 10TH NOV ALLOWED -
    13TH OCT 15TH SEP MONT HLY 15TH OCT 3 12TH OCT 15TH JAN 15TH OCT ALLOWED -
    13TH OCT 15TH SEP MONT HLY 15TH OCT 3 12TH OCT 15TH JAN 14TH OCT NOT ALLOWED Modified end date cannot be less than next Review date, if tracking task is triggered
    13TH OCT 15TH SEP MONT HLY 15TH OCT 1 14TH OCT 15TH JAN 14TH OCT ALLOWED Modification is allowed since tracking task is not yet triggered. Covenant tracking is stopped
    13TH OCT 15TH SEP MONT HLY 15TH OCT 1 14TH OCT 15TH JAN 13TH OCT ALLOWED Since covenant tracking task is yet to be generated, end date can be modified as current business date
    13TH OCT 15TH SEP MONT HLY 15TH OCT 2 13TH OCT 15TH JAN 14TH OCT NOT ALLOWED Since tracking task is triggered, end date modification is not allowed
    13TH OCT 15TH SEP MONT HLY 15TH OCT 2 13TH OCT 15TH JAN 12TH OCT NOT ALLOWED Since modified end date is backdated, modification is not allowed
    13TH OCT 15TH SEP MONT HLY 15TH OCT 2 13TH OCT 15TH SEP 15TH JAN NOT ALLOWED Since end date has already passed, no modification is allowed
    13TH OCT 15TH SEP MONT HLY 15TH OCT 2 13TH OCT 15TH SEP NIL NOT ALLOWED Since end date has already passed, modification is not allowed

    Table 2-42 Examples for the Review date calculation of different frequencies and combinations

    Start date - 04-Apr-2017
    First Review Date
    Frequency Without Start Month + Due Date With Start Month + Due Date With Start Month + Due Date Only Start Month Only Start Month Only Due Date
        Apr 15 Apr 02 Apr 15 2
    Daily 05-Apr-17 15-Apr-17 02-Apr-18 Not Allowed 15-Apr-17 02-May-17
    Weekly 11-Apr-17 15-Apr-17 02-Apr-18 Not Allowed 15-Apr-17 02-May-17
    Fortnightly 18-Apr-17 15-Apr-17 02-Apr-18 Not Allowed 15-Apr-17 02-May-17
    Monthly 04-May-17 15-Apr-17 02-Apr-18 Not Allowed 15-Apr-17 02-May-17
    Quarterly 04-Jul-17 15-Apr-17 02-Apr-18 Not Allowed 15-Apr-17 02-May-17
    Half Yearly 04-Oct-17 15-Apr-17 02-Apr-18 Not Allowed 15-Apr-17 02-May-17
    Yearly 04-Apr-18 15-Apr-17 02-Apr-18 Not Allowed 15-Apr-17 02-May-17
    Custom (5) 09-Apr-17 15-Apr-17 02-Apr-18 Not Allowed 15-Apr-17 02-May-17
  2. Click Save to save the record.

Parent topic: Customer Covenant Linkage