Credit arrangement states
- 14 Jul 2021
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Credit arrangement states
- Updated On 14 Jul 2021
- 1 Minute To Read
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Article summary
A Credit Arrangement defines the maximum amount a client can borrow through loans and overdrafts. To establish the initial state of a credit arrangement, navigate to Administration, General Setup, and Internal Controls, where you can set it to either Pending Approval or Approved. If set to Pending Approval, all arrangements will require user approval, necessitating the Approve Credit Arrangements permission. Actions available in the Pending Approval state include undoing approval, closing, withdrawing, and rejecting arrangements, with specific permissions required for each. Once a credit arrangement is Approved, it becomes active and cannot be withdrawn or rejected, nor can its terms be edited if it is in Closed states. All transitions between states are recorded on the account, ensuring a clear audit trail of activities related to credit arrangements.
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A Credit Arrangement is a maximum amount a client (individual, group or company) can take out in loans and overdrafts.
Set the initial state of a credit arrangement
Credit arrangements can be set up to transition between the Pending Approval and Approved states.
To set the initial state of a credit arrangement:
- On the main menu, go to Administration > General Setup > Internal Controls.
- Select the New Credit Arrangement Initial State to be either
Pending ApprovalorApproved. - Select Save Changes.
If you set the configuration above to Pending Approval, then all credit arrangements will be created with this state and will require user approval.
You must have the Approve Credit Arrangements permission enabled in order to approve a credit arrangement.
Pending approval
These are the actions possible on credit arrangements in the Pending Approval state, and their corresponding permissions:
| Action | Required Permission |
|---|---|
| Undo approval | Undo Approval Credit Arrangement |
| Close (withdraw) | Withdraw Credit Arrangements |
| Undo withdraw | Undo Withdraw Credit Arrangements |
| Close (reject) | Reject Credit Arrangements |
| Undo reject | Undo Reject Credit Arrangements |
Please Note
A credit arrangement must first be approved before you can add accounts to it. You can't add accounts to a credit arrangements that is in the Pending Approval state.
Activities will be captured on the account every time a credit arrangement transitions between states.
Rejecting or withdrawing a credit arrangement is only possible from the Pending Approval state.
Approved
A credit arrangment in the Approved state is considered an active credit arragnement. Active credit arrangements can no longer be withdrawn or rejected. It is also not possible to edit the terms of credit arrangements in the Closed (Withdrawn) or Closed (Rejected) states.
Please be Aware
Once accounts have been added to a credit arrangement, the credit arrangment can no longer be deleted.
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