Automatic Interest Adjustment for Backdated Transactions
When a backdated transaction is made in the system, internally, the system stores the difference in the interest before and after the backdated transaction in a field and then automatically adjusts it in the next cycle. The difference gets adjusted against the next interest posting transaction for IPT-enabled loans and against the Interest Remaining for non-IPT-enabled loans.
Thus, you can create backdated transactions whose transaction dates are prior to any existing transactions. This means that you can make a backdated payment or a perform a backdated payment reversal without reversing and reapplying the older transactions.
Currently, the system only supports backdated payments, backdated payment reversals, and backdated interest waivers.
Let us look at the details of automatic interest adjustment for backdated transactions for the following types of loans:
IPT-enabled loans
Non IPT-enabled loans