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You can indicate that the interest and fee details specified for the product are to be applied to
the new (rolled over) placement. In such a case, the new placement will have interest
payment schedules every month and a processing fee.
You can specify that the interest and fee details defined for the placement being rolled over
(old placement), be made applicable to the new one. In this case, the new placement will have
only one interest payment schedule on Maturity Date and will have no fee.
In addition, you have to specify the following details for a product for which rollovers are
permitted:
Update Utilization
Whether the credit limit utilization is to be updated when a placement is rolled over. That is,
the interest that has been accrued on a placement is also considered as a part of the ‘utilized
amount’ for the purpose of risk tracking. The following example illustrates how this concept
works.
This option applies only if you want to roll over a deal with interest.
Apply Tax
For tax to be applicable on a rolled over deal:

It should be applicable to the product involving the deal

It should not have been waived for the old deal
You should indicate whether tax has to be applied on the rolled over deal also.
Rollover with Interest
You have to specify whether the deal that you are rolling over should be rolled over along with
the outstanding interest. If you so specify, the principal of the new deal will be the sum of the
outstanding principal and the outstanding interest on the old deal. This applies only to deals
with a bearing (add-on) method of interest liquidation.
If all the outstanding interest is paid out, then the deal can be renewed without the interest. If
not, it will be rolled over with the interest that is still outstanding on it.
A deal is rolled over with only the main interest that is outstanding. The main interest is that
interest component which you specify as the ‘main interest’ in the ICCF Product Details
screen (this will be displayed in the Contract Main screen). Other interest components and the
penalty interest if any will not be rolled over.
Deduct Tax on Rollover
When a deal is initiated, tax is applied on the principal of the deal. Now, when this deal is rolled
over or renewed, you have two choices (depending on the tax laws of your Government):

Apply tax on the principal, (outstanding principal + outstanding interest or only the
outstanding principal depending on your specifications), of the new deal, or,

Since the principal of the old deal has already been taxed once, you can choose to
waive the tax on the principal of the rolled over deal. However, if this principal has the
outstanding interest from the old deal incorporated, then only this portion will be taxed.
This option applies only to tax on principal and not to tax on interest.
This field assumes importance, only if:

Tax (for principal as well as interest) has not been waived on the old deal

Tax, has not been waived on the rolled over deal
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