Example: Capital Increase and Decrease on a Loan Account
There are two participant loan accounts in a master contract, MC #1:
LO #1 with a committed limit of EUR 13,000
LO #2 with a committed limit of EUR 7,000
Customizing
The master contract is based on a product in which the Facilities feature is active and which is customized as follows:
Facility Control
Attributes |
Value |
Credit Clearing Mode |
1 — Debit Balance The utilization balance of a master contract is the sum of all negative balances of the participants in this master contract. Positive balances are not taken into account. |
Clearing Mode for Currency Translation |
1 — Clearing After Currency Translation |
Utilization Calculation
The Master Contract
The nominal utilization is to be checked against the global external limit.
Participant Loan Accounts
The utilization calculation base relevant for nominal utilization is Current Contract Capital.
Master Contract and Account Processing
MC #1 has a facility with a committed limit of EUR 20,000 and a tolerated overdraft limit of EUR 5,000.
If you attempt to increase the committed limit of LO #1 by EUR 2,000 however, the system performs a global limit check and indicates that such a capital increase is not possible. The capital increase would increase the nominal utilization to EUR 22,000 (EUR 13,000 + EUR 2,000 + EUR 7,000), but the global external limit is EUR 20,000.
Now, consider an attempt at a capital decrease of EUR 4,000 on LO#1. The system updates the nominal utilization of the master contract to EUR 16,000 and does not perform a facility check.
Calculation of the Nominal Utilization after capital decrease:
Participants |
Global External Limit |
Nominally Utilized Amount |
Non-Utilized Amount |
MC #1 |
20,000 |
–16,000 |
4,000 |
LO #1 |
–9,000 |
||
LO #2 |
–7,000 |