8.2.110.2 Module Usage
Oracle ALM and Funds Transfer Pricing Cash Flow Methodologies reference PMT_DECR_CYCLE when re-calculating the current payment for negative amortization events such as NEG_AMRT_LIMIT, PMT_ADJUST_DATE, and PMT_ CHG_FREQ. This is relevant only for adjustable rate accounts where AMRT_TYPE_ CD = 600.
- For negative amortization-type accounts, the Cash Flow Engine uses PMT_ DECR_CYCLE to calculate the maximum decrease in the payment amount allowed from the previous payment change to the next.
- PMT_DECR_CYCLE is defined in terms of a percentage. The Cash Flow Engine
performs the following check:
- Previous Current Payment - Newly calculated payment > (PMT_DECR_ CYCLE/100 * Previous Current Payment)
- If the newly calculated payment satisfies the earlier equation, the Cash Flow Engine limits the decrease to the amount = (PMT_DECR_CYCLE * Previous Current Payment).
- For example, if PMT_DECR_CYCLE = 5.00, the calculated current payment is not allowed to decrease by more than 5% of the previous current payment.
- If PMT_DECR_CYCLE = 0, the cash flow engine assumes that there is no payment decrease limit per payment change period.
- The PMT_DECR_CYCLE is referenced when the following negative amortization events occur: NEG_AMRT_LIMIT, PMT_ADJUST_DATE, and PMT_CHG_FREQ.