2.1.6.1 Grace Days for Multiple Penal Components

This topic describes the systematic instructions to define the grace days applicable for multiple penal components.

From the Islamic Money Market Product Definition screen, navigate to the Preferences screen.

If your bank has chosen to have multiple penal components, you can define grace days (in days, months or years) to be applicable for each level. The penalty will not be applied if the payment made within the grace period that you have defined for each level. It becomes applicable only after the expiry of the grace period. The penalty, if applied, will, however, be calculated from the day the payment becomes overdue

Note:

The number of grace days specified for a level must be more than the number of grace days specified for the previous level. Higher the level, higher the number of grace days defined for the level.

For a product you can specify the grace period after which the penalty will start accruing, through the Grace Days Definition screen.

1. On the Preferences screen click Grace Days.

   The level numbers get defaulted depending on the number of levels defined in the ICCB Details screen, irrespective of the Basis Amount Type i.e. if you define three levels of penalty for the Basis Amount type Principal and four levels of penalty for the Basis Amount type Interest, levels 1 to 4 are available to you in the Grace days definition screen. You will not be able to add levels in this screen. Since the level numbers get defaulted from the ICCB Details screen, it is imperative that the expected and overdue components are defined at the ICCB Details screen, prior to the definition of grace days for the levels.

   Note:

   Grace days are defined for a level. You cannot specify different grace days for the same level for different Basis amount types. After the product has been saved and authorize, you are not allowed to modify grace days.

   Grace Days screen is displayed.

   Figure 2-7 Grace Days

   
   Description of "Figure 2-7 Grace Days"
2. On the Grace Days screen, specify the details as required.
3. Click Ok to save the details or Exit to close the screen.

   You must specify the grace period for each level. Each overdue component will come into effect when the grace period associated with the level expires. The grace period is expressed in:

   • Days
   • Months
   • Years

   You can select the appropriate option from the drop-down list.