Processing an automatic repayment

For deals that have been defined with automatic liquidation of repayments, the liquidation will be carried out by the Automatic Contract Update function. It could be an interim repayment schedule liquidation or a maturity schedule liquidation. The schedule, whether an interim schedule or a maturity schedule, will be automatically liquidated on the day it falls due, during beginning of day processing.

Now, if you have indicated automatic liquidation, the schedule date falls on a holiday, and you have specified that the holiday be ignored (through the Contract Preferences screen), the liquidation falling due on the holiday, would depend on your holiday handling specifications in the Branch Parameters screen:

 If you specified that processing has to be done today (the last working day before the holiday) for automatic events right up to the day before the next working day the schedule falling on the holiday will be liquidated during end of day processing on the last working day before the holiday.

 If you specified that processing has to be done only up to the System Date (today), then only the events scheduled for today (the last working day before the holiday) will be processed. The events falling on the holiday will be processed on the working day immediately following the holiday, during beginning of day processing.

If a placement has been defined for verification of funds before automatic liquidation, the

components for which the schedule dates fall on the same day will be liquidated in the order that you specified while defining the product. If the funds are insufficient, the liquidation will be done to the extent of the available balance in the repayment account, again, following the order of

liquidation of components specified by you. If this is so, it will be reported in the Exception Report generated at the end of every day, automatically (by the Automatic Contract Update function). If you have not specified that the funds are to be verified, and the funds are insufficient:

 The repayment account will be put into a debit balance if an overdraft is allowed, and the schedules for the components will be liquidated to the extent of the debit balance

allowed. If it crosses the extent of debit balance allowed, the liquidation will be done with an overdraft override that is automatically recorded. The debit interest that is applicable to the account (current or savings) will be applied.

 If the repayment account has not been defined with overdraft, the liquidation will not be processed.

The liquidation order is helpful when you want to liquidate the dues in a certain order: say interest (or interest type of components) first and then the principal. If the deal has been defined with Floating interest, and an interest revision falls due today, the revised rate will be applied before the repayment is processed.

8.6.1 Advices generated for a repayment

Advices are generated by the Automatic Contract Update function during beginning of day processing. While defining a product you may have specified that an advice is to be generated to intimate the customer every time a payment has been liquidated. This will apply to all deals involving the product (refer chapter on product definition). However, for a particular deal, you can suppress this advice. If a repayment advice has been specified for a deal, it will be generated by the Automatic Contract Update function when you run it at the beginning of day.

8.7

Generation of billing advices

A billing notice or advice can be generated, for the benefit of the customer, as a reminder that a payment on a placement is due. When defining a product, you can specify the number of working days before the repayment date when a billing notice is to be generated.

The notice is generated as part of the Automatic Contract Update function when you run it at the beginning of day. The billing advice is generated for the mail medium. This notice will be

generated for repayment of all components.

If you have specified that a notice is to be generated on a certain day and it happens to be a holiday, then the notice is generated depending on your holiday handling specifications in the Branch Parameters screen:

 If you have specified that automatic processes are to be carried out up to the next

working day, the notices slated for generation on the holiday will be generated during end of day processing, on the last working day before the holiday.

 If you have specified that the automatic processes are to be carried out only till System Date (today’s date), notices slated for generation on the holiday will be generated on the next working day immediately after the holiday, during beginning of day processing. Example

Assume that while entering into a contract with Ms Yvonne Cousteau, you specified 10 days here. If today is 20 June 1997 and 21 June 1997 is a holiday, the notices will be generated for payments due on 30 June 1997, during BOD on 20 June 1997.

The notices meant for 1 July 1997 will be generated, during end of day processing, on 20 June 1997 if you have specified that all automatic processes falling due right up to the next working date are to be processed on the System Date (today’s date).

If not, the notices meant for 1 July, will be generated during beginning of day processing, on the working day immediately after the holiday, that is, 22 June.

If the number of days is increased, the system checks for deal with a payment date between the old and the new number of days and will send a billing notice.

If the number of days is decreased, the system will check to see if a notice has been sent already, to avoid duplication. If not, it will send the notice.