2.2.11.1 Maintaining Tenor Restrictions for a Sub-Line

This topic describes about the information on tenor restrictions maintenance for sub-line.

User can define a sub-line tenor list and also define limits for each of them. To recall, a subline falls under the umbrella of the Main Line to which it is linked. Therefore, the maximum tenor that you define for a sub-line should not exceed the maximum tenor defined for the main line to which it is linked. The limit amount that you define for each sub-line tenor cannot be higher than the tenor limit defined for the main line to which it is linked. Tenors and limits can be placed at both the sub-line and main-line levels.

But, the maximum tenor of a sub-line cannot exceed the maximum tenor defined for the main-line to which it is linked.

Example

User define a Line LOANS and link it to the Liability Code CREATIVITY INC. The limit set for this line - LOANS is $ 1million.

User define a credit limit of $ 1 million for Creativity Inc. under this Credit Line. You also specify the tenor Restrictions for the line to be the following 30D, 60D, and 90D.

Table 2-36 Main Line Tenor List

Main Line Tenor List	Limit
30D	0.5M
60D	0.3M
90D	0.2M

The loans that this customer can avail can be further classified into Short, Medium, and Long Term Loans.

For our example we shall make Short Term, Medium Term and Long Term loans as sub-lines under the Main Line LOANS. It is only when you link these credit lines to the Credit Line LOANS that it becomes a Main line.

Sub-line code

• STLOANS
• MTLOANS
• LTLOANS

User can define a tenor list and have tenor based limits for both the Main Line and Sub-lines. So we shall also maintain tenor based limits for the sub-line STLOANS (as shown in the table below):

Table 2-37 Sub-Line Tenor List

Main Line Tenor List	Limit
30D	0.3M
60D	0.2M
90D	0.1M

You can add to the list of tenors maintained for a Main Line by specifying the Tenor restriction under the head Tenor and clicking on the + button. If you want to remove a tenor restriction from the list of tenor restrictions, highlight it and click the - button.

Validations:

• Multiple records with Same days and same/different Tenor cannot be provided at facility level.
• Tenor based utilization will be based only on the days provided and not on the Tenor. In case Mainline and Sub-line have same Days with different Tenors and utilization comes for that day, both sub-line and mainline tenor utilization will be affected for different Tenors.
• Tenor based utilization is allowed (with an override) for more than the limit specified for the Tenor basis
• Tenor based utilization is not allowed for a Tenor (Days) greater than the one specified at the Facility level.
• De-utilization updates back the Tenor at facility level.

Modification Validations:

• Tenor cannot be modified below the Tenor already utilized
• Modification of the Tenor (Limit / Days) specified more than the Limit utilized already is allowed
• Addition of Tenor with Days below already specified if utilized is not allowed
• Addition of Tenor with Days below already specified if not utilized is allowed
• Addition of Tenor with Days above already specified is allowed.
• Addition of Tenor with Days same as already specified is not allowed
• Addition of Tenor (Days/Limit) at Sub-line level above Maximum tenor (Days / Limit) of Mainline is restricted
• Deletion of Tenor at Facility level (Mainline / Sub-line) which has already been utilized is restricted
• Deletion of Tenor at Facility level (Mainline / Sub-line) which has NOT already been utilized is allowed.