Overview
An Inter-Company Deposit (ICD) is an unsecured borrowing by corporates and FIs from other corporate entities registered under the Companies Act 1956. The corporate having surplus funds would lend to another corporate in need of funds.
Navigating to the Inter-corporate deposit
Click on Loan Facility within the Liability option in the system side panel. This will open the Inter Company Deposit blotter.
Creating a new ICD in Finvisage
Click on the + symbol within the menu in the bottom right corner of the ICD blotter to open the new ICD screen. This will open screen to add a new ICD.
The new ICD screen is divided in to:
1. Basic details of the ICD
2. Effective interest rate schedule
3. Other relevant fields
Basic details within an ICD include -
1. Entity - the legal entity within the user's organisation that is executing the ICD contract
2. Counterparty - the external party that is making the deposit
3. Currency - currency for the principal amount
4. Deposit number - internal id used to refer the specific ICD in all contracts
5. Principal - the principal notional for the deposit
6. Value date - date from which the interest calculation begins
7. End date - end date of the ICD
8. Tenure - this is autocalculated in days from the value date and end date
Effective interest rate schedule captures the current ongoing interest either in fixed or floating format. If the interest rate changes before the end date or closure of the ICD, the same can be recorded with the date from which the same shall be effective. This will revise the interest rate calculations.
In other relevant fields, the user will need to enter:
1. Days in a year type - this is used for interest rate calculation. This dropdown has two options: Actuals days in a year and Constant days.
If actuals days in a year is selected, the interest rate calculation takes in to account the number of days in the year in which the interest is being accrued. For instance, in leap years, it will automatically divide annual interest rate by 366 days for daily interest calculations.
If constants days is selected, the user shall be prompted to enter the desired number of days annually that must be assumed for the calculations.
2. Use first day for calculation - if the interest is payable on first day i.e. value date, this has to be selected. In default cases, the interest for day (i) is due on day (i+1). Where this is not the case and it is due on same date, this option will be selected.
3. Use last day for calculation - if interest is payable on first day, the user has to confirm if the same is then payable on last day i.e. end date. If yes, the system takes care of the same in interest payment schedule calculations.
4. Put or call - select whether the ICD is of put or call type.
5. Security trustee - this is a free text field for capturing the name of the trustee
6. Additional info - any additional information that the user may wish to capture in the ICD