The 'Liability Adjustment' is to adjust the internal entries on the Liability Panel for the Loan contracts. The 'Booking Amount' field changes the Liability amount without creation of new Amendment transaction. The 'Booking Amount' field is used to de-recognize remaining non-utilized amounts.
When a negative amount is entered the current liability will be reduced by the amount and in case of positive amount there will be an increase the current liability.
The amount of the contract is not changed by an internal adjustment.
When a Loan contract becomes Past due/Overdue, it could reach the Non Performance stage, where recovering the amount becomes doubtful. This necessitates reclassification of the liability. A new checkbox 'Non Performing Loan' will be enabled only for Past due contracts.
Upon checking this, the liability will be reclassified as 'NPA'. This implies that the booking entries will also be updated. For Past Due contracts, when 'Non Performing Loan' checkbox is selected, existing Past due liability will be out-booked and the same will be booked in Non Performing loan liability.
To do Liability Adjustment for the existing Loan contracts, TRTTEN transaction is used.
Select it from the menu item[Financing Products -> Loan -> Other > Liability Adjustment].
Non Performing Loan (NPA):
When you have made your changes, click on the ( ) Save function to save all the the data entered in the transaction to the database.