2.6.1.2 Component Linkage

This topic describes about configuring applicable business components to the product segment.

In Component Linkage screen, Business Components are displayed grouped together under Component Type. Business components defined using Create Business Component screen are listed under each component type and available for linkage to the product segment in this screen.

For more information on Business Component, refer to Create Business Component.

To link business component to product segment, follow the below steps.
  • Method 1:
    • Type the Business Component Code in filter by Component Code field.
    • System lists all the components matching the typed code.
    • Select the component from the list shown. Link Component toggle, basic details of the component, and its preferences are displayed on the right.
    • Enable the component toggle to link the component.
  • Method 2:
    • Click on the Expand icon besides Principal.
    • Select the principal component from the list shown. Link Component toggle, basic details of the component, and its preferences are displayed on the right.
    • Enable the component toggle to link the component.
    • Repeat the above steps for linking Interest, Fees, Insurance and any other components.
    • To de-link the business components, select the component and click on the toggle to disable.
  1. Click Next in the Basic Details screen to link the components.
    The Component Linkage screen displays.

    Note:

    The Components defined in the Component Linkage will be displayed.

    Figure 2-17 Component Linkage


    Description of Figure 2-17 follows
    Description of "Figure 2-17 Component Linkage"

Principal

  1. Specify the fields on Principal screen.

    Refer above to link the Principal component. On linking Principal component, below component details are displayed.

    Figure 2-18 Principal


    Description of Figure 2-18 follows
    Description of "Figure 2-18 Principal"

    Note:

    The fields marked as Required are mandatory.
    For more information on fields, refer to the field description table.

    Table 2-17 Principal - Field Description

    Field Description
    Type Displays the type of component as Principal.
    Code Displays the unique code of principal component .
    Description Displays the description of the principal component code

Interest

  1. Specify the fields on Interest screen.

    Before enabling the Link toggle, user is required to define Pricing Preferences for Interest and Currency wise Interest Rate preferences.

    Interest Pricing Preferences refer to attributes based on which Interest Rate and Spread applicable on loan account is determined across the term of the loan.

    Currency wise Interest Rate preferences refer to Minimum and Maximum Rate and Spread that can be allowed on the account for each of the allowed product currencies.

    Figure 2-19 Interest - Basic Details and Component Preferences


    Description of Figure 2-19 follows
    Description of "Figure 2-19 Interest - Basic Details and Component Preferences"

    Note:

    The fields marked as Required are mandatory.
    For more information on fields, refer to the field description table.

    Table 2-18 Interest - Basic Details and Component Preferences

    Field Description
    Type Displays the type of component as Interest.
    Code Displays the unique code of interest component .
    Description Displays the description of the interest component code
    Interest Category Displays the category.
    Basis Component This field refers to the amount basis up on which the business component type will be computed. For regular interest, this component basis will refer to PRINCIPAL.

    Click Search icon and select the basis component from the list.

    This field is displayed only if the Interest Category is selected as Regular Interest.

    This field is displayed as drop-down list if the Interest Category is selected as Penalty Interest.

    The available options are:
    • Principal Overdue
    • Interest Overdue
    • Installment Overdue

    The allowed values are defined by the lookup type FEE_BASIS.
    Accrual Required Displays the whether the accrual is enabled or not.

    When accrual is enabled, interest is recognized as income at the accrual frequency mentioned, even before interest is due/received
    Accrual Frequency Displays the frequency at which accrual entries are to be posted.
    The available options are:
    • Daily
    • Monthly

    This field is displayed only if the Accrual Required is enabled.

    The allowed values are defined by the lookup type ACCRUAL_FREQUENCY.
    Day Count Convention This field refers to the method used to derive the no of days computed at the time of calculation of interest.

    The numerator refers to method of calculating of no of days in the interest period. If it is ACTUAL, then it is the actual no of days between start date and end date of the interest computation period (including start date and excluding end date).

    Denominator refers to the total no of days in a year. If it is ACTUAL, a leap year will be taken as 366 days and a non-leap year will be taken as 365 days.

    If it is 365/360, no of days is taken as 365/360, irrespective of the leap year.

    The available options are:
    • ACTUAL/ACTUAL
    • ACTUAL/365
    • ACTUAL/360
    • 30US/360
    • '30/360ISDA

    The allowed values are defined by the lookup type DAY_COUNT_CONVENTION.
    Grace Days for Penalty Displays the number of days after which penalty interest will be applied. A grace period allows a borrower to postpone payment for a short duration beyond the due date without incurring Penalty Interest or triggering default.

    This field displays only if the Interest Category is selected as Penalty Interest.

    Note: This is not supported by the for Line of Credit products.

    Charging Frequency Displays the charging frequency.
    The available options are:
    • Daily
    • Installment Due Date and Post Maturity Daily

    Specify the frequency in which Penalty Interest calculated balances to be charged to the account.

    The allowed values are defined by the lookup type PENL_CHARGE_FREQUENCY.
    Include in Installment This field is not applicable for Interest type component.
    Include in APR This field is not applicable for Interest type component.

    Note:

    The fields marked as Required are mandatory.
    For more information on fields, refer to the field description table.

    Table 2-19 Interest - Currency Wise Rate Preferences - Field Description

    Field Description
    Currency Click Search icon and select the currency from the list.

    Note: One currency is to be mandatorily selected.

    Minimum Rate This is the minimum interest rate allowed for the interest type component. Specify the minimum rate value up to 6 decimals.

    Note: While on-boarding loan account / Line of Credit or during life cycle of loan, an error is displayed if final interest rate of account goes below the specific minimum rate.

    Maximum Rate This is the maximum interest rate allowed for the interest type component. Specify the maximum rate value up to 6 decimals.

    Note: While on-boarding loan account / Line of Credit or during life cycle of loan, an error is displayed if final interest rate of account exceeds this maximum rate.

    Minimum Spread Rate This is the minimum spread rate for the interest type component. Specify the minimum spread rate value up to 6 decimals.

    Note: While on-boarding loan account / Line of Credit or during the life cycle of loan, an error is displayed if spread value goes below the minimum spread rate.

    Maximum Spread Rate This is the maximum spread rate for the interest type component. Specify the maximum spread rate value up to 6 decimals.

    Note: While on-boarding loan account / Line of Credit or during the life cycle of loan, an error is displayed if spread value exceeds the maximum spread rate.

    Floor Rate The Floor Rate should be set up greater than the Minimum Rate and less than the Ceiling Rate.

    Note: The borrower is charged the floor rate if the calculated interest rate (benchmark rate + margin) is lower than the floor rate.

    Ceiling Rate The Ceiling Rate should be set up greater than the Maximum Rate.

    Note: The borrower is charged the ceiling rate if the calculated interest rate is higher than the ceiling rate.

    Action Displays the action.

    The user can edit or delete the record.

Fees

  1. Specify the fields on Component Linkage - Fees screen.

    Before enabling Link Component toggle, user need to specify charge code of the fees. Below Component Details are displayed.

    Figure 2-20 Fees


    Description of Figure 2-20 follows
    Description of "Figure 2-20 Fees"

    Note:

    The fields marked as Required are mandatory.

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

    Table 2-20 Fee - Basic Details and Component Preferences

    Field Description
    Type Displays the type of component as Fee.
    Code Displays the unique code of fee component.
    Description Displays the description of the fee component code
    Fee Type Displays the fee type.
    Options are:
    • Events - In case of fee to be charged on specific event everytime the event occurs or periodic/scheduled in nature or to be raised in manually/adhoc application. This allow attaching fees on BOOK event.
    • Periodic - The fees are defined for a specific periodicity. The Frequency and periodicity are defined further in linking the Fee in Product Segment. The allowed values are defined by the lookup type FEE_TYPE.
    Basis Element Displays the basis element type.

    The Basis Element is defaulted to Fixed Amount if the Assessment Method is selected as Adhoc Based at a transaction level.

    The allowed values are defined by the lookup type FEE_BASIS_ELEMENT.
    Accrual Required Display whether accrual required is enabled or disabled.

    When accrual is enabled, fee is recognized as income at the accrual frequency mentioned, even before fee is due/received

    Table 2-21 Fees - Additional Preferences and Pricing Preferences - Field Description

    Field Description
    Include in Installment Click the toggle status to enable this feature. This toggle should be enabled if the said component is required to be considered in the installment amount.

    Note: This field is not supported for the Line of Credit products.

    Include in APR Click the toggle status to enable this feature. This toggle to be enabled, if the said component is required to be considered for computation under the Annual Percentage Rate.

    Note: This field is not supported for the Line of Credit products.

    Include in MAPR Click the toggle status to enable this feature. This toggle to be enabled, if the said component is required to be considered for computation under the Military Annual Percentage Rate.

    Note: This field is not supported for the Line of Credit products.

    Charge Code Amount of fees or percentage of fees to be applied is decided based on the Charge Code. Click Searchicon and select the code from the list.

    Charge code maintained are displayed in the list.

    For more information on charge code, refer Charge Code in Common Core User Guide.

    Charge Code Description Displays the description of the charge code selected.

Insurance

This allows linking Insurance Components to Product Segment.

Note:

Note: This feature is not supported for the Line of Credit products.

  1. Specify the fields on Component Linkage - Insurance screen.

    Enable Link Component toggle to link insurance component to product segment. Below Component Details are displayed.

    Figure 2-21 Insurance


    Description of Figure 2-21 follows
    Description of "Figure 2-21 Insurance"

    Note:

    The fields marked as Required are mandatory.

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

    Table 2-22 Insurance - Basic Details - Field Description

    Field Description
    Type Displays the type of component as Insurance.
    Code Displays the unique code of Insurance component.
    Description Displays the description of the Insurance component code.

    Table 2-23 Insurance - Additional Preferences - Field Description

    Field Description
    Include in APR Click the toggle status to enable this feature. This toggle to be enabled, if the said component is required to be considered for computation under the Annual Percentage Rate.
  2. Click the Click here link under the Fees shown along the row of event code to link the fees or insurance component to respective event.
    Note: Insurance component can be linked only Booking or Disbursement event.
  3. Click Cancel to close the details without saving.
  4. Click Back to navigate to previous screen (Basic Details).
  5. Click Save and Close to save the details.
  6. Click Next to save and navigate to the next screen (Preferences).

Parent topic: Create Product Segment