What: an option on the product level to automatically lock interest / fees / penalties after the loan account is X number of days in arrears. Therefore, if the loan account is in arrears:
(a) From the 1th day till the Xth day - there would be no change to the current process
(b) From Xth day - the account would be automatically locked until is it manually unlocked or until the loan is cured, i.e. again 0 days in arrears.
(c) If the loan account is cured (back to 0 days in arrears) - it should be automatically unlocked
Why: many countries mandate that scheduled interest / fees / penalties payments that have been in arrears for a specified period (for example 90 days or longer) must be excluded from the value of the loan. Currently, this process has to be performed manually for all the accounts > X days in arrears.
Enable option to lock multiple accounts
For locking loan accounts, ideally Mambu would allow an option for the user to select all related accounts that are to be locked. The current work around would be for the user to manually select each account and lock each one individually. However, it would be useful if Mambu would allow to lock more than one account at a time, for example to lock accounts that are in arrears for over 90 days.
- Dorota Nosal
- Jan 12 2015
An option to freeze accruing interest / fees / penalties on a loan account
What: an option to freeze interest/fees/penalties, ideally:
(a) automatically after specified number of X days in arrears (on the product level)
(b) manually on the account level (similar as can be done currently with the lock function)
The implication of freezing a loan account would be that no accounting entries would be posted when a loan account is frozen (i.e. all the interest / fees / penalties would stop being accrued in the background and being recognized in the ledger until the account is unfrozen).
Why: if a client cannot continue to make payments due to bankruptcy or financial distress, organisations might want to completely stop interest from accruing in the background. Additionally, accounting rules in most countries require that interest needs to stop being accrued after a certain number of days loan account is in arrears, for example account in arrears:
(a) 1-90 days - no change to accruing interest / fees / penalties
(b) 90-180 days - interest/ fees / penalties are accrued to a suspense account (it's not recognised as income anymore)
(c) > 180 days - interest/ fees / penalties are not accrued at all (are frozen, and not recognised in the ledger at all)
Allow Locking of Loans through API
Locking of Loans was implemented on the UI to prevent further accruals of interest or penalties on a loan account. It would be great to be able to do that through the API as well, with the use case that an external workflow app tries to lock all loans which are in arrears 60 or more days need to stop accruing interest and penalties.
Possibly higher level discussion needed whether it should be possible to do something on the UI which can't be done through APIs (API first approach, see Amazon AWS).\
Accounting layer for locking and unlocking of loan accounts
- Dorota Nosal
- Mar 16 2015