Reverse a Payment Transaction
There may be situations where a lender needs to reverse a payment. For example, if the borrower makes the payment twice, or the borrower pays in excess and lender needs to reverse and re-submit a payment. In such cases, you can reverse a previously created transaction that is posted on the loan contract. The Cleared checkbox on the loan payment transaction detail page, or the Transactions, Payments tab identifies that the transaction is cleared and posted. In addition, you can see the payment amount split between the principal, interest and fee component, for a posted transaction.
A reversal can be done for any payment related transaction, such as, an investor fund transaction, loan disbursal, loan payments, and an investor loan transaction. Once the reversal is processed:
The Cleared checkbox is selected in the payment transaction reversal detail page. If the reversal transaction fails, the Rejected checkbox is selected.
The Cleared and Reversed check boxes are selected for the original loan payment transaction in the transaction detail page and the Transactions tab.
The status of the contract is returned to the state prior to the transaction.
The balances, such as principal, interest, and fees and any interest postings for investors are reverted to the original state.
When the payment s reversed, the Reason Code field on the reversal LPT displays the reversal reason.
Last payment on a contract: Reversing the last payment on a loan reverts the loan status to Active. You must run the Investor Payout Reversal job to reverse the related investor loan transaction and revert the status of the investment order from Inactive to Active.
Interest posting enabled loans: For loans where interest posting is enabled, when you reverse a payment transaction, the interest posting transactions that are partially or fully paid by the payment are reversed to their original state. This applies even in cases where the transaction to be reversed is not the latest transaction, and you must reverse transactions in LIFO order to reach it. The bills and interest postings satisfied through these payments accordingly get marked as paid or partially paid based on the reversed amounts. Similarly, interest posting transactions generated post this LPT are marked as reversed and do not affect the contract status.
Consolidated loan payment: In case of reversal of a consolidated loan payment, the system internally reverses the payments for the constituent loan contracts in LIFO order.
Prepayment causing loan reschedule: In CL Loan 2.4008 and later, reversal of a prepayment that caused a reschedule of the loan also reverses the reschedule action. The original payment schedule is reinstated. Any IPTs created after the reschedule are discarded and created again when the SOD job runs next. Similarly, any bills generated after prepayment are discarded and new bills are generated for the new schedule after reversal when the Billing job runs next. The Loan Payment ID field in the reschedule transaction identifies the payment that caused the reschedule, and upon its reversal, the system also reverses the reschedule, if you are upgrading to CL Loan 2.4008 or later, you must add this field to the reschedule transaction page layout. For more information, refer to section Reverse a Payment Transaction.