Mambu Banking Engine

Ideas aimed to improve the current experience provided by the Mambu Banking Engine.

Continue Fee amortisation after rescheduling/ refinancing a loan

What: Continue Fee amortisation after rescheduling/ refinancing a loan account

Why:

With the current behaviour, when the loan is rescheduled - the whole remaining balance of the unamortised fee is immediately recognised as income.

However, from the accounting point of view, this is incorrect because this is still the same loan account only with amended conditions and terms. Therefore, the fee income should continue being amortised over a different remaining period of time.

This issue will affect especially longer-term loans and/ or when a loan account is rescheduled in the middle of its term because too big amount of the fee will be recognised as income at once.

There’s currently no workaround for this issue.

  • Dorota Nosal
  • Jan 11 2018
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  • Irina Murgescu commented
    27 Sep, 2018 07:53am

    Hi

    First of all thanks a lot for your input.

    I think that the Aha Idea APP-659 will answer to your first comment, meaning the possibility to transfer the balance from various loans into one loan.

    Related to the second comment, hope that I'm understanding it right. You already can capitalise the applied accrued interest in the principal balance of the new loan account. 

  • Chetan Goel commented
    26 Sep, 2018 01:16pm

    Additionally, the interest accrued figure also goes down to nil upon refinance / reschedule - can this also be allowed to continue taking the accrued interest figure from original loan onto the new loan as a starting point?

  • Chetan Goel commented
    26 Sep, 2018 01:15pm

    As part of this, a related query is if a functionality can be provided to transfer balance from various loans onto one loan is feasible? Essentially, this becomes important for tranched draw downs where by a Credit Arrangement might end up having multiple accounts making it difficult to manage these. The above functionality can be then used for amalgamation of accounts

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