Computation of EIR

The LLFP application calculates the Effective interest Rates as applicable. The application also gives the option to provide the EIR value as a download.

Note:

EIR computation is applicable for products under ODs, Cards, Loans, Investments, Money Market instruments, Borrowing, Repo Contracts, Annuity Contracts, Term Deposits, Commitment Contracts, and Retirement Accounts. In the case of Leases, the Lease rate is used as the discount rate. And for Letter of Credits and Guarantees, the discount rate is provided as a download. These rates have to be provided as a download through the Account Inception Rates Stage table. The following details must be noted for EIR computation:

• Holiday Calendar is not supported for EIR Computation.
• Credit Adjusted EIR is not computed.

The computed EIR is dependent on the payment frequency, and constant value, provided as part of the account details. In the case of patterns, the payment frequency for each cash flow date is equal to the number of days between the current cash flow date and the previous cash flow date or FIC MIS date.