2.12.21 Promissory Note

This topic provides the information on Promissory Note.

The system allows to add collaterals of type promissory note in GCDCOLPN screen while creating customer collaterals.

Note:

The user can add any number of promissory notes as collateral. While creating a collateral record, at least one promissory note must be available as child collateral.

If multiple promissory notes are added as collaterals, the value of the collateral is the sum of consideration amount in all the promissory notes.

In case, the promissory note currency is different from the collateral currency, the system converts the consideration amount in promissory note to collateral currency with the configured exchange rate.

Note:

The Collateral Value derived from the linked promissory notes cannot be changed manually.

End date of the collateral is derived based on the farthest limitation expiry date of the linked promissory notes.

Note:

Collateral end date derived from the linked promissory notes can be changed manually, but it cannot be less than the derived date.
  1. On the Home screen, specify GCDCOLPN in the text box and click the Next icon.
    The Promissory Note screen is displayed.
  2. On Promissory Note screen , click the Promissory Note tab.
    The Promissory Note screen is displayed. For more information on fields, refer to the field description table.

    Table 2-103 Promissory Note - Field Description

    Field Description
    Promissory Note Type Specify the type of the promissory note.
    Reference Number Specify the reference number of the promissory note.
    Maker Specify the name of the entity that provides the promissory note.
    Payee Specify the name of the payee that receives the promissory note.
    Holder Specify the name of the promissory note holder, if holder is endorsed by the payee.
    Place Specify the place or address where the promissory note is executed.
    Execution Date Specify the execution date of the promissory note.
    Limitation period Specify the validity of the promissory note in months.
    Limitation review date Specify the review date of the promissory note.
    Limitation expiry date Specify the expiry date of the promissory note.
    Currency Click the Search icon and select the currency of the promissory note.
    Consideration Amount Specify the full amount mentioned in the promissory note.
    Amount in Collateral Currency Specify the promissory note consideration amount converted to collateral currency, if the promissory note currency and the collateral currency are different.
    Status Status of the promissory note from the drop-down list. The options available are:
    • Active: During new collateral creation process of promissory notes, the Status will be selected as ‘Active’ by default.
    • Cancelled: After saving the collateral, the user can manually mark / update the Status as ‘Cancelled’ at any point during the collateral life cycle.
    • Expired: After saving the collateral, the Status can be marked / updated as ‘Expired’ either manually by user or through automatic update based on the date captured as expired at any point during the collateral life cycle.

      Note: The Collateral value will get reduced based on the individual status update of associated / linked promissory notes.

    • Cancelled to Active / Expired
    • Expired to Active / Cancelled
    Remarks Specify the additional details of the promissory notes, if any.
  3. Click Save to save the record.