4.1 Define Schedules for a Product

This topic describes the repayment schedules definition for the product.

Define repayment schedules for the interest or interest types of ICCB components like a tenor based charge or fee and the principal of a Money Market deal while defining a product.

The attributes of the schedules for a product are defined through the Money Market - Product Preferences screen. The following are the attributes of a repayment schedule:

• Mode of liquidation - auto or manual. This is changed at the time of deal processing.
• Liquidation of back valued schedules upon initiation of a deal. This is changed at the time of deal processing based on requirement.

However, for a deal, you can have:

• Only a maturity schedule for the principal and no interim schedules
• Interim schedules for the interest
• The only normal type of schedules for interest. Schedules cannot be capitalized or amortized
• No schedules for commission, charge or fees

A discussion on these attributes follows in this topic.

The Automatic Contract Update function executed as part of the Money Market Batch Daily routine automatically liquidates schedules that you have marked for auto liquidation. If schedules are marked for manual liquidation, you will have to liquidate them through the Contract Schedule Payments function.

Once you specify the attributes of schedules in the Product Preferences screen, the default schedules, which you want, applied to the deals involving the product, and are specified through the Product Schedules screen.

At the time of deal processing, you can change the schedules which have been inherited by the deal, to suit your needs.

If the Interest specified is an amount and not a rate (Special type of Interest), you should enter this amount for the interest component. You should specify the number of schedules for the component (interim schedules and maturity schedule). You can give the Start Date, Frequency and Unit again or let the details inherited from the product remain.

Note:

If schedules are not defined for the product, then the borrowings or placements under it will have bullet (or balloon) schedules by default. That is, all the components is liquidated on Maturity.

Since for a money market deal, the principal repaid is always at Maturity, you need not define a schedule.