1.2.7 Block Amount Restoration on Utilization Reversal

This topic describes about block amount restoration on utilization reversal.

The "Reversal" event is used to correct errors or to negate transactions that were posted in error, posted with incorrect values, or require cancellation due to business or operational reasons. It ensures that system records and calculations remain accurate and reflect the true position as per actual business events.

Automatically reploughing the block after utilization reversal ensures that the original reserved amount remains protected for its intended purpose, prevents premature re-availability of credit, reduces operational risk, and maintains control and compliance across all subsequent business processes and exposures.

User can restore the original blocked amount if a utilization (initially processed using a block reference) is later reversed (through a "Reverse" or "E-reverse" or “Undo” action), instead of simply increasing the available amount. This reinstates the block to its original state, as though the utilization against the block had not occurred.

Sample Example: Reverse

Table 1-108 Reverse

Event	Blocked Amount	Utilized Amount	Available Amount	Key System Actions
Facility Created	0	0	25,000	Create Facility
Block (B1) Applied	10,000	0	15,000	Create block of 10,000, reduce available
NEW Utilization (vs. block B1)	0	10,000	15,000	Move 10,000 from block to utilization
Utilization Reversed (B1)	10,000	0	15,000	Utilization reduced, block reinstated

Note:

If utilization was not linked to a block (block reference not given), only available amount is impacted and block amount remains unchanged.

Sample Example: E-Reverse

Table 1-109 E-Reverse

Event	Blocked Amount	Utilized Amount	Available Amount	Key System Actions
Revolving Facility Created	0	0	25,000	Create Facility
Block (B1) Applied	10,000	0	15,000	Create block of 10,000, reduce available
NEW Utilization (vs. block B1)	5000	5000	15,000	Move 5000 from block to utilization
Utilization INCREASE (3000) (vs. block B1)	2000	8000	15,000	Move an additional 3000 from block to utilization. Total Utilization (8000)
Utilization DECREASE (1000) (vs. block B1)	2000	7000	16,000	Reduce the utilized amount and increase the available amount by 1000
Utilization ‘INCREASE’ E-Reversed (B1)	5000	4000	16,000	Utilization reduced, block reinstated to extent of that during INCREASE action

Note:

Using "E-reverse" for a "Decrease" utilization does not affect block or available - only changes the outstanding utilized value.

Sample Example: UNDO

Table 1-110 UNDO

Event	Blocked Amount	Utilized Amount	Available Amount	Key System Actions
Revolving Facility Created	0	0	25,000	Create Facility
Block (B1) Applied	10,000	0	15,000	Create block of 10,000, reduce available
NEW Utilization (vs. block B1)	5000	5000	15,000	Move 5000 from block to utilization
Utilization INCREASE (3000) (vs. block B1)	2000	8000	15,000	Move an additional 3000 from block to utilization. Total Utilization (8000)
Utilization UNDO	5000	5000	15,000	Utilization reduced, block reinstated to extent of that during INCREASE action