Ideas for the Mambu Banking Engine

Add Option to Start Index Rate Period at the Approval date

Background: 

The current logic in Mambu for index rate linked products is to start the index rate on the disbursement date:

  • For dynamic accounts, the rate applied will be the rate from the current moment (so the index rate will be updated on disbursement date)
  • For fixed accounts, the rate applied will be the rate from disbursement transaction

What:

  • add an option to choose which index rate should be applied on a given loan account: index rate starting on the approval date or starting on the disbursement date

Why:

For certain products, the rate for the first instalment will already be captured in the legal documentation agreed with the client on the approval date. The rate provided to the customer will be an all-in rate (including any margin/spread built) and this will be on legal documentation that will be electronically sent to the customer, who will have x number of days to sign these documents.

If the index rate is changed within the given timeframe, the customer may still be within the allowed timeframe to return the documentation but have the rate changed (at disbursement), although the legal documentation alludes to a previous rate.

This may cause legal loan documentation to be invalidated/open to challenge. 

  • Dorota Nosal
  • Feb 9 2015
  • Attach files