2.17 Collateral Pool Maintenance

This topic describes about the procedure to maintain customer to liability link.

Note:

The fields, which are marked with an asterisk, are mandatory.
  1. On the Home screen, specify GCDMPOOL in the text box and click the Next icon.
    The Collateral Pools Maintenance screen displays.

    Figure 2-47 Collateral Pools Maintenance


    Description of Figure 2-47 follows
    Description of "Figure 2-47 Collateral Pools Maintenance"

  2. On Collateral Pools Maintenance screen, click New and specify the fields.
    For more information on fields, refer to the field description table.

    Table 2-45 Collateral Pools Maintenance - Field Description

    Field Description
    Liability No Click the Search icon and select the liability number to which the collaterals need to be linked.
    Liabilituy Name Specify the liability name to which the collaterals is linked.
    Liability Branch Specify the liability bramch to which the collaterals is linked.
    Branch Code Click the Search icon and select the branch code from the list.
    Mortgage Initiated Swtich to On to initiate the mortgage.

    Swtich to OFF not initiate the mortgage.

    This option is checked automatically for collateral and collateral pool created as a result of authorization of mortgage account and user cannot modify it.
    Pool Code Specify the Pool Code here. The pool code assigned to each collateral pool can be linked to a liability while creating credit limits.
    Pool Description Specify a brief description of the collateral pool here. A maximum of 2000 characters are allowed in this field.
    Auto Facility Create

    Swtich to On to indicate that a facility should be created automatically.

    Swtich to OFF not to indicate that a facility should be created automatically.

    The system will automatically create facility in the logged in branch irrespective of the liability branch.

    Note: This automatically created line code can be used to maintain limits for customer account in Account Limits screen, if required.

    Pool Currency Click the Search icon and select the currency in which the Collateral Pool has to be maintained.
    Revolving Facility

    Swtich to On to indicate revoling facility.

    Swtich to OFF not to indicate revoling facility.

    By default, the system creates non-revolving facility during auto creation of facility.
    Pool Amount Specify the pool amount.
    Pool Utilized Specify the utilized pool amount.
    Auto Facility Customer Specify the customer number to which the collateral pool is linked. The option list displays all valid customer numbers linked to the liability number selected on this screen. User can select the appropriate customer number from the option list.

    The auto facility customer is enabled only if the option Auto facility Create is enabled, For more details on maintaining Account Limits, refer Core Entities User Manual.

    Available Amount On save of the collateral pool record, system defaults the available amount for the collateral pool. It is the difference between Pool Amount and Pool Utilized.
    Pool Block Amount Block on the pool made through the Block screen GCDBLCKS.
    Block Amount Specify the pool amount which is to be blocked.
    Tanked Utilization The system computes and displays the utilization amount that can be set in the Tanked Utilization field.

    After BOD process, this utilization amount is updated for the transactions linked to collateral pool as per the contract and the amount is cleared from the tanked utilization field.
  3. To add a new collateral, click Plus button, specify the relevant details and save the record. To delete an existing collateral, select it and then click Minus button and save the record.
    • Collateral can be linked to more than one pool if the collateral amount available is not zero.
    • A credit line can be backed by only one pool but a single pool can back multiple credit lines.

    Figure 2-48 Collateral Pools Maintenance


    Description of Figure 2-48 follows
    Description of "Figure 2-48 Collateral Pools Maintenance"

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

    Table 2-46 Creating Collateral Pool Linkages - Field Description

    Field Description
    Collateral Currency The currency in which the collateral has been maintained is displayed when a collateral code has been picked.
    Collateral Contribution The collateral amount which has been maintained is displayed when a collateral code has been picked.
    Amount Basis User can either select Percentage or Amount

    If the Percentage is selected, then system allows you to enter the percentage only and not the Linked Amount. The Linked Amount is appropriately calculated by the system and it is not editable. The value of the percentage must be from range 0 to 100.

    If theAmount is selected, then the system allows you to enter the amount only and not percentage. When amount is entered, the system appropriately calculates the percentage. Ensure to maintain amount in positive.

    If the Amount Basis is selected as Amount and Collateral Value is modified, then the percentage linked gets recalculated based on the modified Collateral Value.

    User can modify the linkage at collateral pool level from percentage to amount and vice-versa.

    The system ensures that total of collateral value linked to one or multiple pools is not more than the collateral value maintained in Collateral Maintenance screen. The system ensures that linkage of collateral to one or more pools cannot be more than 100% of collateral value.

    Linked Percent Number and Linked Amount In case Collateral Value is increased in Collateral Maintenance screen, then the Linked Amount is modified only if the Amount Basis is Percentage.

    If the Amount Basis is Amount, then the Linked Amount is retained as is. However, based on the changed Collateral Value, the Linked Percent Number is re-calculated considering the retained amount.

    In case Collateral Value is decreased, modified amount of collateral is validated with all the Linked Amount in various pools (either percentage or amount) and if the total amount linked is less than modified amount then modification of collateral value is to be allowed. Wherever Percentage is considered for linking collateral to pool, the linked amount is re-calculated accordingly with modified amount of collateral.

    If the Collateral Value decreased amount is less than the total Linked Amount' in various pools, then an appropriate error message appears.

    When a collateral pool comprising the collateral is linked to the facility, the system computes and displays the amount to be linked. The linked amount of Collateral pool is computed based on the pool percentage or pool amount specified when a collateral pool is linked to a Facility.

    For example, Collateral Pool ‘Pool1’ is created with pool amount of 6000 USD. And 60% of Pool1 is linked to a Facility, then the linked amount of the collateral pool is updated as 3600 (that is, 60% of 6000). The available amount of collateral pool is updated as 2400 (6000- 3600). The available amount of the collateral pool is arrived by using the below mentioned calculation

    Available amount = pool amount – pool utilization – linked amount.

    The available amount of facility is increased to the extent of blocked amount in the facility currency. Any utilization to the facility only impacts the available amount and the utilization of the facility and not the collateral pool or the underlying collateral.
    Pool Amount The total amount allocated to the pool in pool currency based on the linked collateral.
    Pool Utilized The system computes and displays the utilization amount to the Collateral Pool, if a collateral Pool is attached to a contract or account and not through a facility.
    Blocked Amount The amount that is linked to the facility.
    Pool Block Amount The block on the pool made through the Block screen (GCDBLCKS).
    Linked Amount Pool Currency The system automatically defaults the Linked Amount Pool Currency for each collateral added to the Collateral Pool Linkages as the amount linked in the pool currency.

    For example, user have linked the pool LOANP001 to the liability BIRLA0001. LOANP001 is in turn backed by the following collaterals:

    For more information on Linked Amount pool Currency, refer Table 2-47.

    Now the pool currency specified is USD. Therefore, the system does the necessary calculations and converts the linked amount into the currency of the pool and displays the pool amount in the respective field.
    Order Number Specify the order for collateral utilization.

    User can specify order number of utilization to collaterals linked to pool. This is optional. However, if one collaterals is specified with order number, then all the collaterals linked to pool are to be specified with order number.

    The order number of utilization can be specified as part of pool creation or can be specified as part of pool amendment.

    The order number can be specified when collaterals are linked to pool with Amount Basis as Percentage or Amount.

    As part of pool amendment, order number specified to collaterals can be removed. However order number is to be removed from all the collaterals.

    Maximum order number specified cannot exceed the number of collaterals linked to the pool. Duplicate order number cannot be specified while linking multiple collaterals to the same pool.

    Collaterals linked to the pool are displayed based on the order number of utilization once the pool is saved and authorized. When any collaterals is delinked from the pool the order numbers are to be reassigned to the remaining collaterals such that maximum order number cannot exceed the number of collaterals that remain in the pool. Delinking of collateral with higher order number is not allowed if the collateral value is contributing to already utilized/ blocked amount at the pool level.

    Modification of pool to delink the collaterals with lower order number when the pool is partially utilized such that the collateral being delinked is not part of this utilization is allowed. User can modify the order number of utilization to bring it down to the lower order such that this collateral is not contributing to the utilized amount at the pool level and then allow delinking of the same from the pool. You can modify the collateral allocation amount/percentage at pool level with order number as long as the modified pool amount is not going below already utilized/blocked amount at pool level.

    If order number of one collateral is removed, the system validates the same at the time of authorization. Either order number is to be specified for all collaterals in the pool or to be removed from all the collaterals in the pool.

    When the pool is fully utilized, collateral with lower order number also is not allowed to be delinked as the same has contributed to the pool utilized/blocked amount. Closure of pool with order number specified but with no outstanding utilized/blocked amount is possible.
    Linked Percent Number The part of the collateral amount which has to be linked to the pool can be specified as a percentage here. On save of the record, if Linked Percent Number is specified, system defaults the Linked Amount calculated as Linked Percent Number Percentage of Collateral Contribution.
    Interest Spread Specify the interest spread to be applied on the customer account. The interest spread can be zero. However, if the collateral attached is a term deposit, then on rollover of the term deposit the interest spread is defaulted to the spread applicable for the term deposit on rollover.
    Expiry Date On save of the record, system defaults the expiry date based on the end date of the collateral maintained. However, if the collateral attached is of a deposit then on rollover of the term deposit the maturity date of the term deposit is updated as the expiry date of the collateral.
    Collateral Code Select the collateral code from the adjoining option list.

    If the Linked Percent Number, is specified, on save of the record, system defaults the Linked Amount calculated as Linked Percentage of Collateral Contribution.

    If the Linked Amount is specified, on save of the record, system defaults the Linked Percent calculated as percentage of Linked Amount out of the Collateral Contribution.

    Table 2-47 Linked Amount Pool Currency - Field Description

    Collateral Code Currency Collateral Amount Linked Amount
    ISDP16924 DEM 100,000 75000
    AC777228 GBP 55,000 55,000
    COLSHRS15 INR 2,000,000 1,500,000
    COLHS819 USD 1,500,000 1,500,000
  4. Click Save to save the record.
  • Notifications
    This topic describes about the detailed information about the Notifications details.
  • Change Log
    This topic describes about the detailed information about the change log details.

Parent topic: Limits and Collateral