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.

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