5.2.4.8 Schedule Adjustments on Interest Rate Revision

In the Instance of Rate change, differential amount will be adjusted against the Bullet schedule without modifying the existing Installment constant amount. On REVN or VAMI either increase or decrease in the rate increases or decreases the bullet schedule amount without affecting EMI or Tenor. As a result, the EMI of the bullet schedule can be less or more than the other schedules.

The main interest component amount of each installment is re-computed in usual way based on the principal balance and the new rate. The prevailing EMI (EMI present in the current schedule of the transaction – System does not consider EMIs of previous schedules) will be kept constant.

The iteration of reducing Principal balance with above Principal component of EMI continues until the bullet schedule is reached. The last EMI have the remaining Principal amount and the interest as the EMI.

In case of user input installment amortise schedule type contracts, On Rate revision or Margin Rate Fixing, if the sum of Interest and Special Component’s amount exceeds the existing Amortization amount, exception is logged for those contracts in batch.