2.2.30 Facility Expiry and Closure with Fee Handling

This topic describes about the faciliy expiry and closure.

Facility Expiry

Facility Expiry functionality is now enhanced to handle below transactions.
  1. Balancing of contingent GL accounts due to de-utilizations on a facility post expiry, in case of revolving line.
  2. Restoring of contingent balance prior to facility expiry considering the payments when facility is extended post expiry.
  3. Two new events are introduced:
    • EXPT (Reversal of Payment post expiry) – This event will balance the de-utilizations post expiry of facility. It will get triggered, if there is a payment on the facility post expiry and will be accompanied with DUTL.
      • This event will be applicable for only revolving facilities (not applicable for non-revolving and NRS lines as de-utilization does not reinstates the limit).

        Table 2-77 Event - EXPT

        Event Accounting Role Amount Tag Dr/Cr Indicator
        EXPT CONASSETOFF UTIL_DECR Debit
        EXPT CONASSETGL UTIL_DECR Credit
    • EXPR (Reversal of Expiry) – This event will restore the contingent balance prior to expiry of the facility duly considering the payments. It will get triggered, only if the facility is getting extended post expiry.

      Table 2-78 Event -EXPR

      Event Accounting Role Amount Tag Dr/Cr Indicator
      EXPR CONASSETGL UNUTL_AMT Debit
      EXPR CONASSETOFF UNUTL_AMT Credit
  4. Example:

    Table 2-79 Facility Creation (revolving line)

    Facility Creation (revolving line)
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    INIT CONASSETGL LIMIT_AMT Debit 10000
    INIT CONASSETOFF LIMIT_AMT Credit 10000

    Table 2-80 Utilization

    Utilization
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    UTIL CONASSETOFF UTIL_INCR Debit 4000
    UTIL CONASSETGL UTIL_INCR Credit 4000

    Table 2-81 De-utilization

    De-utilization
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    DUTL CONASSETGL UTIL_DECR Debit 1000
    DUTL CONASSETOFF UTIL_DECR Credit 1000

    Table 2-82 Facility Expiry

    Facility Expiry
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    EXPY CONASSETOFF UNUTL_AMT Debit 7000
    EXPY CONASSETGL UNUTL_AMT Credit 7000

    Table 2-83 De-utilization post Expiry -DUTL

    De-utilization post Expiry
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    DUTL CONASSETGL UTIL_DECR Debit 2000
    DUTL CONASSETOFF UTIL_DECR Credit 2000

    Table 2-84 De-utilization post Expiry - EXPT

    De-utilization post Expiry
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    EXPT CONASSETOFF UTIL_DECR Debit 2000
    EXPT CONASSETGL UTIL_DECR Credit 2000

    Table 2-85 Facility Extension

    Facility Extension
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    EXPR CONASSETGL UTIL_DECR Debit 7000
    EXPR CONASSETOFF UTIL_DECR Credit 7000

Facility Closure

  1. Facility Closure will signify the logical closure of facility (terminating/permanently closing the line).
  2. Facility Closure can happen both prior and post expiry of the facility.
  3. Closure of facility can only be done when there is no outstanding (both direct and indirect utilizations and blocks) – system will validate.
  4. Mainline facilities cannot be closed if sub-line facilities are still open – system will validate.
  5. Auto CNR process for non-revolving facilities will continue as is - updating record status as CLOSED [C].
    1. It will not mark the logical closure of record (update limit status and user defined status as ‘Closed’).
    2. Thus, logical closure should always be initiated by the user.
  6. Existing operation of record closure and reopen will continue its behavior as is.
  7. Facility once logically closed cannot be activated again.
  8. For closing the facility, user should:
    1. Unlock the facility.
    2. Under Limit Review section.
    3. Select the Limit Status as Closed.
    4. Closure Reason can be provided.
    5. Save the facility record.
  9. On closure of facility,
    1. User Defined Status will be updated as Closed.
    2. Status Changed On field will be updated based on closure date.
    3. System will trigger the event CLOS with accounting entries, depending on whether the closure happens before or after the facility expiry.
      • Close before expiry – contingent accounting same as that of expiry.
      • Close after expiry - no need for posting any contingent entries since EXPY event balances the contingent GLs.

      Note:

      CLOS event is to be maintained in Fee Class Maintenance with below accounting entries.

      Table 2-86 Event -CLOS

      Event Accounting Role Amount Tag Dr/Cr Indicator
      CLOS CONASSETOFF UNUTL_AMT Debit
      CLOS CONASSETGL UNUTL_AMT Credit
  10. Scenario 1 – Closure before Expiry (revolving Line).

    Table 2-87 Closure before Expiry- Facility Creation (revolving line)

    Closure before Expiry
    Facility Creation (revolving line)
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    INIT CONASSETGL LIMIT_AMT Debit 10000
    INIT CONASSETOFF LIMIT_AMT Credit 10000

    Table 2-88 Closure before Expiry- Utilization

    Closure before Expiry
    Utilization
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    UTIL CONASSETOFF UTIL_INCR Debit 4000
    UTIL CONASSETOFF UTIL_INCR Credit 4000

    Table 2-89 Closure before Expiry- De-utilization

    Closure before Expiry
    De-utilization
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    DUTL CONASSETGL UTIL_DECR Debit 4000
    DUTL CONASSETOFF UTIL_DECR Credit 4000

    Table 2-90 Closure before Expiry

    Closure before Expiry
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    CLOS CONASSETOFF UNUTL_AMT Debit 10000
    CLOS CONASSETGL UNUTL_AMT Credit 10000
  11. Scenario 2 – Closure before Expiry (non-revolving Line).

    Table 2-91 Closure before Expiry (non-revolving Line) - Facility Creation (non-revolving line)

    Closure before Expiry
    Facility Creation (non-revolving line)
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    INIT CONASSETGL LIMIT_AMT Debit 10000
    INIT CONASSETOFF LIMIT_AMT Credit 10000

    Table 2-92 Closure before Expiry (non-revolving Line) - Utilization

    Closure before Expiry
    Utilization
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    UTIL CONASSETOFF UTIL_INCR Debit 4000
    UTIL CONASSETGL UTIL_INCR Credit 4000

    Table 2-93 Closure before Expiry (non-revolving Line) - De-utilization

    Closure before Expiry
    De-utilization
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    De-utilizatin of 4000
    No De-utilization

    Table 2-94 Closure before Expiry

    Closure before Expiry
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    CLOS CONASSETOFF UNUTL_AMT Debit 6000
    CLOS CONASSETOFF UNUTL_AMT Credit 6000
  12. Scenario 3 – Closure after Expiry.

    Table 2-95 Closure after Expiry - Facility Creation (revolving line)

    Closure after Expiry
    Facility Creation (revolving line)
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    INIT CONASSETGL LIMIT_AMT Debit 10000
    INIT CONASSETOFF LIMIT_AMT Credit 10000

    Table 2-96 Closure after Expiry - Utilization

    Closure after Expiry
    Utilization
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    UTIL CONASSETOFF UTIL_INCR Debit 4000
    UTIL CONASSETGL UTIL_INCR Credit 4000

    Table 2-97 Closure after Expiry - De-utilization

    Closure after Expiry
    De-utilization
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    DUTL CONASSETGL UTIL_DECR Debit 1000
    DUTL CONASSETOFF UTIL_DECR Credit 1000

    Table 2-98 Closure after Expiry - Facility Expiry

    Closure after Expiry
    Facility Expiry
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    EXPY CONASSETOFF UNUTL_AMT Debit 7000
    EXPY CONASSETGL UNUTL_AMT Credit 7000

    Table 2-99 Closure after Expiry - De-utilization post Expiry- DUTL

    Closure after Expiry
    De-utilization post Expiry
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    DUTL CONASSETGL UTIL_DECR Debit 3000
    DUTL CONASSETOFF UTIL_DECR Credit 3000

    Table 2-100 Closure after Expiry - De-utilization post Expiry- EXPT

    Closure after Expiry
    De-utilization post Expiry-EXPT
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    EXPT CONASSETOFF UTIL_DECR Debit 3000
    EXPT CONASSETGL UTIL_DECR Credit 3000

    Table 2-101 Closure after Expiry

    Closure after Expiry
    Event Accounting Role Amount Tag Dr/Cr Indicator Amount
    NO CLOS EVENT

Fee Handling:

  1. Fees can now continue to be collected post expiry of the facility till logical closure.
  2. Fee end date will not be defaulted with facility expiry date.
  3. User can provide the fee end date less or greater than facility expiry date and can choose to not provide it (keep blank).
    • Fee end date < facility expiry date: Fee will be collected (accrual and liquidation) only till the given date.
    • Fee end date > facility expiry date: Fee will continue to be collected (accrual and liquidation) post facility expiry up to the given date.
    • Fee end date is blank: Fee will continue to be collected (accrual and liquidation) till logical closure of facility.
  4. User can modify the fee end date till logical closure of facility, provided fee end date has not crossed.
  5. Defer liquidation of fee can be signified even post expiry till logical closure of facility and will continue based on current functionality.
  6. On logical closure of facility, system will liquidate all the fees till the date of closure - Accrual (FACR) and liquidation entries (FLIQ and PRLQ) will be passed till facility is logically closed.
  7. These above points are applicable to all facilities – Current dated/Back dated/Future dated.

Parent topic: Facilities Maintenance