Previous Next JavaScript must be enabled to correctly display this content

## 2.7.1.2 Business Components

This topic describes about configuring various types of Business components applicable to the product.

All the business components defined for the product segment are defaulted to the product and Loan officer creating the product can deselect the components not applicable for this product.

New business components cannot be added directly to the product. They need to be added to the product segment and in turn to the product.

In this section, Loan officer can only de-link the components not applicable for the product. Also, in this section loan officer can configure the pricing preferences for interest components and charge code applicable for fee components.

In this section, the system allows linking Insurance Components to Product Segment with Include in APR option.

1. Click Next in the Basic Details screen to link the components.
   The Business Components screen is displayed.

   Figure 2-36 Business Components

   Description of "Figure 2-36 Business Components"

Principal

2. Specify the fields on Principal screen.
   The Principal type components defined in the Business Components section of Product segment are listed here. Click on toggle status to disable the component selected.

   Note:

   Atleast one principal component type needs to be enabled.

   Figure 2-37 Principal

   Description of "Figure 2-37 Principal"

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

   Table 2-38 Principal - Field Description

   Field | Description
   --- | ---
   Type | Displays the type of component.
   Code | Displays the unique code.
   Description | Displays the description of the code.

Interest

3. Specify the fields on Interest screen.

   The Interest type components defined in the Business Components section of Product Segment are listed here. The user can link the component code by specifying the pricing preferences and currency wise rate preferences for interest and enable the toggle.

   Figure 2-38 Interest - Basic Details and Component Preferences

   Description of "Figure 2-38 Interest - Basic Details and Component Preferences"

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

   Table 2-39 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

   Figure 2-39 Interest - Pricing Preferences

   Interest pricing preferences for different periods are captured in this section. For example, For first 3 years the interest to remain fixed, followed by floating rate for the remaining term can be configured in this section as below.

   Table 2-40 Interest Pricing Preferences

   Serial Number | Period | Unit | Rate Application
   --- | --- | --- | ---
   1 | 3 | Years | Fixed
   2 | 999 | Years | Floating

   Description of "Figure 2-39 Interest - Pricing Preferences"

   Note:

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

   Table 2-41 Interest - Interest 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 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 flag needs to be ON for Reg Z enabled products as it is considered as part of Finance charge under Reg Z. This field is not supported for Line of Credit products.
   RP Benefits Applicable | Click the toggle status to enable applicability of relationship pricing (RP) feature to the product. If enabled, certain configurations are additionally required as per the criteria sought under relationship pricing.
   Deposit Rate Calculation Method | Specify the method used to calculate the deposit rate from the drop-down list. The available options are: Weighted Average – The system calculates the weighted average of deposit rates based on the deposit linkage amounts. Highest Rate – The system selects the highest deposit rate from the linked deposits. Lowest Rate – The system selects the lowest deposit rate from the linked deposits. Note: This field is mandatory for Loan against deposit products.
   Pricing Preferences | Section displays the pricing preferences for different periods.
   Default Period | Specify the default period.
   Unit | Specify the unit from the drop-down list. The available options are: Days Months Years The allowed values are defined by the lookup type PERIOD_UNIT.
   Pricing Type | Specify the pricing type from the drop-down list. The other values are: User Defined Rate Code Based Price Code Based Deposit Rate Based If it is User Defined, then interest rate value is directly given at the time of on-boarding loan account / Line of Credit. If it is Rate Code Based, interest rate value is derived based on the rate code maintenance configuration in common core. If it is Price Code Based, interest rate is derived based on price code defined in common core. If it is Deposit Rate Based, then interest rate is derived based on selected value of deposit rate calculation method . Note: Deposit Rate Based is allowed only for Loan against deposit products The allowed values are defined by the lookup type `PRICING_TYPE`.
   Default Rate | Specify the default rate. This field is enabled only if the Pricing Type is selected as User Defined. Note: If Pricing Type is User Defined, system default Rate Application as Fixed. and the field gets disabled
   Rate Code | Specify the rate code. This field is enabled only if the Pricing Type is selected as Rate Code Based.
   Price Code | Specify the price code. This field is enabled only if the Pricing Type is selected as Price Code Based.
   Rate Application | Specify the rate application. The available options are: Fixed- Fixed rate application means interest rate remain fixed for the entire loan term. Floating - Floating rate application means the interest rate is revised automatically as per refresh frequency configured in product preference. The allowed values are defined by lookup type RATE_APPLICATION. Note: When the pricing type is User Defined or Deposit Rate Based, the rate application is defaulted to FIXED and disabled. For Rate Code Based or Price Code Based pricing types, selecting a rate application is mandatory.
   Spread Type | Specify the spread type from the drop down list. The available options are: User Defined. Price Code Based Pricing - This is for future use. The allowed values are defined by look up type SPREAD_TYPE.
   Default Spread | Specify the default spread when the spread type is User Defined. This spread will be added as product spread to arrive at the final rate of loan. Note: Default Spread should be within the range of Minimum and Maximum Spread Rate.
   Spread Price code | Specify the spread price code when the spread type is Price Code Based Pricing. This is for future use.
   Currency Wise Rate Preferences | Section displays the currency wise rate preferences.
   Currency | Displays the currency selected.
   Minimum Rate | Specify the minimum rate for the interest type component. This value is populated from Currency Wise Rate Preference setup at product segment and can be modified. Specify the minimum rate value up to 6 decimals and ensure that the value is less than the Maximum rate and also within the range of product segment level minimum rate and maximum rate for the same component. Also, note that system validates during account on-boarding and also during the Life cycle of the loan and displays an error if final rate of loan account / Line of Credit goes below the minimum rate or goes above the maximum rate.
   Maximum Spread Rate | Specify the maximum spread rate for the interest type component. This value is populated from Currency Wise Rate Preference setup and can be modified. Specify the maximum spread rate value up to 6 decimals and ensure that the value is within the range of product level minimum spread rate and maximum spread rate for the same component defined in product. Also, note that system validates this value either during account on-boarding or during the Life cycle of the loan and displays an error if spread value goes below the minimum spread rate or if minimum spread rate is greater than maximum spread rate.
   Floor Rate | Specify the floor rate. Note: The Floor Rate should be set up greater than the Minimum Rate and less than the Ceiling Rate.
   Ceiling Rate | Specify the ceiling rate. Note: The Ceiling Rate should be set up greater than the Maximum Rate.
   Action | Displays the actions to be taken on record. The available options are: Edit - Click to edit the record. As user clicks this icon, the fields becomes editable. User can edit the required details and click Save. Delete - Click to delete the record.

Fees

4. Specify the fields on Fees screen.

   The Fee type components defined in the Business Components section of Product segment are listed here. The user can link the component code by specifying the charge code preferences and enabling the toggle.

   Figure 2-40 Fees

   Description of "Figure 2-40 Fees"

   Note:

   The fields marked as Required are mandatory.

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

   Table 2-42 Fees - Field Description

   Field | Description
   --- | ---
   Link Component | Click the toggle to associate a component to the product.
   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: For any Fee that needs to be included as Finance charge under RegZ, should have this flag as ON.
   Advance Pricing | This is for future use.
   Charge Code | Select the charge code from the list. Displays the charge codes from Charge Code maintenance screen.
   Charge Code Description | Displays the description of the charge code selected.
   First Due Date | This is applicable only for periodic fees component. It is defaulted as First Due Date. The first due of periodic fees will be same as installment due date and further fee due dates will be by adding fee frequency to the previous due date. The allowed values are defined by the lookup type FEE_FIRST_DUE_DATE. Note: This field is supported for Line of Credit products.
   Fee Frequency | This is frequency of charging the periodic fees. The allowed values are : MONTHLY QUARTERLY ANNUALLY HALF YEARLY The allowed values are defined by the lookup type FEE_FREQUENCY. Note: The Fee Frequency as Monthly is supported for both Loan accounts and Line of Credit products.

Insurance

5. Specify the fields on Insurance screen.

   The Insurance type components defined in the Business Components section of Product segment are listed here. Click on toggle status to disable the component selected.

   Note:

   This section is not supported for Line of Credit products.

   Figure 2-41 Insurance

   Description of "Figure 2-41 Insurance"

   Note:

   The fields marked as Required are mandatory.

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

   Table 2-43 Insurance - Component Details - Field Description

   Field | Description
   --- | ---
   Component Details - Basic Details | This section displays the basic details of component.
   Type | Displays the type of component as Insurance.
   Code | Displays the unique code.
   Description | Displays the description of the code.
   Preferences | This section displays the preferences of component.
   Include in Installment | This field is not applicable for Insurance type component.
   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.

6. Click Cancel to close the details without saving.
7. Click Back to navigate to previous screen (Basic Details.
8. Click Save and Close to save the details.
9. Click Next to save and navigate to the next screen (Product Preference).

Parent topic: Create Product