Backdated Renewal
When a bank or customer agrees new condition fixing on the date of renewal and the new condition fixing takes effect on the date when the old condition fixing and inpayment agreement expired (retrospectively), this is referred to as “backdated renewal”.
If there is no agreed new condition fixing or inpayment agreement in place at the end of the current condition fixing period, the system locks the account and a post-processing order (PPO) is created.
At a future date, when the backdated renewal occurs, you retrieve the account from the PPO and you create a new condition fixing period or inpayment agreement period at the end date of the old condition fixing period (backdated). In this case, interim condition fixing is not created by default.
Example
Consider the following loan contract:
Loan contract details |
Date(s) |
Current condition fixing period: |
Jan 1, 2007 to Jan 1, 2008 |
Current agreement period: |
Jan 1, 2007 to Jan 1, 2010 |
Individual condition 1: |
Jan 1, 2007 to Oct 30, 2007 |
Individual condition 2: |
Jan 1, 2007 to Oct 1, 2008 |
Individual condition 3: |
Jun 1, 2008 to Feb 1, 2009 |
Individual condition 4: |
Dec 1, 2007 to May 1, 2008 |
Date of renewal: |
May 1, 2008 |
New condition fixing period: |
Jan 1, 2008 to Jan 1, 2010 |
With backdated renewal, all individual conditions that are valid at the start date of the new condition fixing period, that is, on Jan 1, 2008, are proposed for inclusion in the new condition fixing. Therefore, only individual conditions 2 and 4 are proposed at renewal.
Individual condition 1, which ends before start date of the new condition fixing period, is not proposed at renewal.
Individual condition 3, which is valid after the start date of the new condition fixing period, is deleted.
Backdated renewal is illustrated in the following figure:
