Indicating the schedule type

You can define schedules for each component for the product through the Product Default Schedules screen. This involves specifying the reference date, the frequency, the month and date for each component.

5.4

Features of the product default schedules screen

When creating a product (in the Product Default Schedules screen), you can define schedules for all deal components. This involves specifying the reference date, the month and the date for each component etc. All deals, involving the product, will acquire these attributes.

Component

You can define different repayment schedules for the different components according to your needs. First of all, you should specify the component for which you want to define the schedule. All components  the principal and any other component depending upon your ICCF definition for the deal  are available in the adjoining option list. You will have to define schedules for each of them.

When defining repayment schedules for specific deals, the amounts for components like interest, commission, and fee will be calculated by the system automatically, depending on the repayment date and amount of the principal. However, for deals with special interest, you will also have to provide the interest amount.

Refer

Indicate whether the dates of repayment schedules should be calculated based on the Value Date (date of initiation of the deal) of the deal involving the product, or a Calendar Date. If you specify that the Reference is the Value Date (date of initiation of the loan), the dates for schedule repayments will be based on this date and the Frequency.

If the Reference is specified as the Calendar Date, the dates for schedule repayments will be based on the Start Date (specified by you), the Month and the Frequency. The following example illustrates this concept.

Example

A borrowing is initiated on 15 September 1997 and the frequency of repayment is weekly. If the Reference is specified as Value Date, the next weekly schedule date will fall due on 22 September 1997, 30 September 1997, and so on, till Maturity.

If the Reference is specified as Calendar Date, and the Start Date is fixed as 1 October 1997, the first repayment date will be 1 October 1997. The subsequent repayment dates will be 8 October 1997, 15 October 1997, and so on.

If Reference is set to Value Date (deal initiation date), you need to specify only the Frequency (monthly, quarterly etc.) and the unit of frequency (if you specify the frequency as weekly and the unit as 1, it means once a week). The system will set the schedule according to the Frequency and Unit of Frequency you have specified, beginning on the Value Date.

Example

If the Value Date of a borrowing is 10 December, 1997 and you indicate the frequency as weekly and unit as 1, then the first schedule will be liquidated on 17 December 1997, the next one on 24 December 1997, and so on.

Frequency

For a periodic schedule, you can indicate the frequency of repayment for each component. This could be:  Daily  Weekly  Quarterly  Monthly  Half-yearly  Yearly  Bullet

By default, the frequency will be Bullet, meaning all the repayments will be made on maturity. If the frequency is defined as Bullet, you cannot enter a value into the subsequent fields.

Unit

You can specify the number of units for the frequency you have set for a particular component. Example

If you want a payment every 15 days, you will have to specify  the frequency as Daily and

 the units as 15.

For payments every three weeks, you will have to define  the frequency as weekly and

 the unit as three.

Day

If you have set the Reference as Calendar Date and the frequency as weekly, quarterly, half- yearly or annual indicate the day on which the first schedule falls due. Based on this, the subsequent schedule dates will be calculated.

Month

If you have set the Reference as Calendar Date and the frequency as weekly, quarterly, half- yearly or annual indicate the month in which the first schedule falls due. Based on this, the subsequent schedule dates will be calculated.

Date

If you have set the Reference as Calendar Date, you should indicate the date on which the schedule should fall due. Specify 31 to indicate that the schedule should fall due on the last day of the month (that is, 31 for months with 31 days, 30 for months with 30 days and 28 or 29, for February).

The schedule repayment dates will be computed using the Frequency, (Start) Month and the (Start) Date.

Example

You have defined the frequency as quarterly, specified March as the first month, and given the date as 31. The repayment schedules will be for 31 March, 30 June, 30 September and 31 December. For a deal starting anytime before 31 March, the first liquidation will be on 31 March. Number of interest days will be calculated from the Value Date to 31 March. From then on, it will follow the quarterly cycle.

Similarly, you have defined the frequency for another product’s default schedules as half-yearly, indicated the month as June and given the date as 31. For a deal that is initiated anytime in before June, the first liquidation will take place on 30 June and the next one on 31 December. For a deal initiated after 30 June, the first liquidation will take place on 31 December, and so on. The start month and date are indicators to the first schedule, so that the schedules that follow can be automatically set from that point on.

A schedule date:

 should be later than or the same as the Value Date,  It cannot be beyond the Maturity Date.

Period Unit

You need to specify the unit for the interest period. The available options are as follows:  Days

 Months  Years