Hi All, This has been a very good discussion with great idea sharing around the topic. I really appreciate Mohammed for taking the initiative to work on this enhancement.
Could we please have a story created in Fineract JIRA with all the required details captured? Regarding the acceptance criteria for this enhancement, I am aligned with the following points: - The system should allow debit transactions on a savings account even when there is an insufficient balance. - In such cases, the savings account should move into a negative balance, and any further debit transactions on the same account should be restricted until the negative balance is fully settled. - There should be a global configuration named allow-negative-balance-on-savings-account, which should be disabled by default. - There should be a configurable global limit on the maximum allowed negative balance. - Accounting behavior should remain unchanged and follow the existing accounting configuration for savings product debit transactions. My only concern is around introducing a new transaction type or a separate API for this functionality. From a customer perspective, this is still a standard withdrawal. Using the existing debit transaction flow should be sufficient and would help avoid the following scenarios: - Organizations must explicitly check account balances before initiating debit transactions. - Any additional complexity, when the existing configurations for “allow-negative-balance-on-savings-account” and the "negative balance limit" can already govern the behavior using current transaction types. So I believe the existing debit transaction mechanism with the above configurations should address the requirement cleanly without new API or new permissions for the same. Regards, Bharath Lead Implementation Analyst | Mifos Initiative PMC Member | Apache Fineract Mobile: +91.7019635592 http://mifos.org <http://facebook.com/mifos> <http://www.twitter.com/mifos> On Fri, Feb 6, 2026 at 5:59 PM Paul <[email protected]> wrote: > Great team work. 👍 > Thanks for the effort. > > -- > Paul > > On Fri, Feb 6, 2026, 5:33 AM Anu Omotayo via dev <[email protected]> > wrote: > >> Thanks Mohammed, you can go ahead please. >> >> In terms of naming convention, I think we should use "force debit" >> because its a banking terminology: >> >> API: withdrawal-force-debit >> >> Permissions: WITHDRAW SAVINGSACCOUNT FORCE DEBIT, WITHDRAW >> SAVINGSACCOUNT FORCE DEBIT CHECKER >> >> System configuration: allow-force-debit-on-savings-account, >> force-debit-on-savings-account-limit >> OR allow-negative-balance-on-savings-account, >> negative-balance-on-savings-account-limit >> >> Regards >> Anu Omotayo >> >> On Friday, February 6, 2026 at 05:39:58 AM GMT+1, Mohammed Saifulhuq < >> [email protected]> wrote: >> >> >> Hi Ayush, >> >> Thank you for sharing that real-world scenario. That is exactly the >> 'silent failure' risk we want to avoid. >> >> It seems we are converging on the *'Negative Balance with Limits'* >> approach as the most robust solution because: >> >> 1. >> >> *Accounting:* It respects GAAP/IFRS liability recognition immediately >> (General Ledger accuracy). >> 2. >> >> *Transparency:* As you noted, it prevents the 'missing money' >> confusion for the end-user. >> 3. >> >> *Safety:* The proposed min-overdraft-limit configuration prevents the >> infinite debt risk I mentioned earlier. >> >> @Anu / @Paul — seeing as we have consensus on both the technical and >> functional sides, are you happy for me to proceed with drafting the >> implementation plan for the *Negative Balance with Configurable Limits* >> model? >> >> Best, Mohammed Saifulhuq >> >> On Thu, Feb 5, 2026 at 10:07 PM AYUSH SINGH <[email protected]> >> wrote: >> >> Hi everyone, >> >> The discussion regarding "user confusion" vs. "accounting accuracy" is >> very relevant. I recently saw a real-world case where a user didn't >> maintain a minimum balance, resulting in a -₹3,000 state due to bank >> charges. >> When they eventually deposited funds, the money was "auto-deducted" to >> cover the debt. Because the system didn't make the negative balance >> transparent, the user was left confused, thinking their deposit had simply >> disappeared until they contacted the bank. >> >> This supports Mohammad's point about the importance of General Ledger >> accuracy and transparency. If we use a "shadow" or "pending" balance as >> Alberto suggested, we might actually increase user support tickets because >> the debt isn't visible to the customer until their new deposit vanishes. >> >> I suggest we prioritize a model that reflects the true liability on the >> user's dashboard to avoid this "missing money" experience. >> >> Best, >> Ayush Singh >> >> >> On Thu, Feb 5, 2026, 9:37 PM Mohammed Saifulhuq < >> [email protected]> wrote: >> >> Hi Alberto, >> That is an interesting approach, but I see a few architectural risks with >> a 'Pending Transaction' model versus a true 'Negative Balance' model for >> this specific use case: >> Regulatory Reality: When a 'Force Post' occurs (e.g., a tax levy or >> regulatory fee), the liability is often immediate. The customer is in debt >> to the bank at that exact second. Keeping the balance at 0 and hiding the >> debt in a 'pending' state might misrepresent the actual General Ledger (GL) >> position of the bank. >> Interest Calculation: If the account is effectively overdrawn, the bank >> usually needs to accrue interest on that debt immediately. Fineract's >> existing interest engine handles negative balances (overdrafts) naturally. >> If we use a 'pending' queue, we would need to rebuild the interest >> calculation logic to look at the 'shadow' balance, which adds significant >> complexity. >> Complexity on Deposit: Your approach requires a new event listener on >> every deposit to 'sweep' the pending queue. This introduces concurrency >> challenges. >> I believe the 'Negative Balance with Limits' approach stays closer to >> standard GAAP/IFRS accounting principles where a liability is recognized >> immediately on the ledger. >> Thoughts? >> >> Best, >> Mohammed Saifulhuq >> >> On Thu, 5 Feb, 2026, 9:27 pm Jose Alberto Hernandez, < >> [email protected]> wrote: >> >> Hello! >> >> I would like to propose a more robust method: >> >> 1. Keep the Savings Account as is, don't update the allowed overdraft or >> something else, >> 2. Generate a new transaction type that will be applied once the account >> has some balance, this can be added to the Savings Account with a new >> command >> 3. Include a new Balance amount, similar as we have now, totalBalance >> amount and available amount, to include those transactions, this new >> balance usually will be negative when the Savings Account has these >> transactions to be applied >> >> The idea of this new transaction type is to record the different pending >> stuff to be applied the next time the account has some deposit >> >> What do you think? >> >> Thanks and regards >> Alberto >> >> On Wed, Feb 4, 2026 at 8:09 PM Mohammed Saifulhuq < >> [email protected]> wrote: >> >> Hi Anu and Campbell, >> This is a critical feature for regulatory compliance, especially for >> institutions handling automated service charges or tax deductions where >> rejecting the debit is not a legal option. >> I agree with Anu's architectural approach, particularly separating this >> into a distinct API command (withdrawal-force-post). Mixing this logic into >> the standard withdrawal flow could create dangerous loopholes where >> overdrafts happen accidentally. >> One additional consideration: >> If we enable allow-negative-balance, we should also consider if this >> requires a 'Limit' configuration (e.g., 'Max Overdraft Amount'). Allowing >> infinite negative balance might pose a risk if a force-post API is abused >> or looped. >> I am happy to pick up the implementation of the Global Configuration and >> the Permission structure if we have consensus on the design. >> Best, >> Mohammed Saifulhuq >> >> On Thu, 5 Feb, 2026, 6:08 am Anu Omotayo via dev, < >> [email protected]> wrote: >> >> Hello, >> >> I had a similar discussion with my colleague on savings account with >> negative balance about two weeks ago. The ask was to debit customer savings >> accounts for regulatory reasons even if the account balance is 0. >> >> Also, I had a negative balance in my account with a commercial bank days >> ago due to a bank charge that I wasn't expecting. >> >> Below is a suggestion on how I think this feature can be implemented in >> fineract. >> >> 1. An "allow-negative-balance-on-savings-account" can be added to the >> global configuration to enable/disable this feature. >> >> 2. It should be implemented as a separate API due to its sensitive nature >> e.g (e.g ~ >> /fineract-provider/api/v1/savingsaccounts/14/transactions?command=withdrawal-force-post). >> The "allow-negative-balance-on-savings-account" setting should be >> checked before the transaction is posted. >> >> 3. New permissions such as WITHDRAW SAVINGSACCOUNT FORCE DEBIT, WITHDRAW >> SAVINGSACCOUNT FORCE DEBIT CHECKER should be created and used for the new >> API. >> >> Regards >> Anu Omotayo >> >> >> >> On Sunday, January 11, 2026 at 01:12:07 AM GMT+1, Campbell Burgess < >> [email protected]> wrote: >> >> >> Paul.... Very well laid out. Thank you. >> >> Bottom line... negative consumer deposit (savings accounts in Fineract) >> routinely go negative, with and without, formal arrangements and with (but >> also without) account holder opt-in. >> >> If what I am now guessing is correct, that Fineract does not readily >> support a force-post, what is the best path forward. >> >> Again, we are happy to do all the lifting and contribute the work product >> to the community, of course, expecting independent review and oversight. >> >> Campbell >> >> >> On 1/10/2026 10:37 AM, Paul wrote: >> >> *Regulation E (Electronic Fund Transfers):* For one-time debit card and >> ATM transactions, banks cannot charge an overdraft fee unless the consumer >> has explicitly *opted in*. However, even without an opt-in, a bank is >> legally permitted to pay the transaction (creating a negative balance) as >> long as it does *not* charge a fee. >> >> -- >> >> Herring BANCORP ® >> >> >> *C. Campbell Burgess *President/CEO >> Office: (806) 373-3921 | Direct: (806) 242-3704 >> >> [email protected] >> >> >> *Herring Bancorp* >> 2201 Civic Circle, Suite 1000 >> <https://www.google.com/maps/search/2201+Civic+Circle,+Suite+1000+%0D%0A++++++++++++Amarillo,+TX+79109?entry=gmail&source=g> >> Amarillo, TX 79109 >> <https://www.google.com/maps/search/2201+Civic+Circle,+Suite+1000+%0D%0A++++++++++++Amarillo,+TX+79109?entry=gmail&source=g> >> >> www.herringbank.com >> >> CONFIDENTIALITY NOTE: This e-mail is intended only for the use of the >> individual or entity to which it is addressed and may contain information >> that is privileged, confidential and exempt from disclosure under >> applicable law. If the reader of this e-mail message is not the intended >> recipient, or the employee or agent responsible for delivery of the message >> to the intended recipient, you are hereby notified that any dissemination, >> distribution or copying of this communication is prohibited. 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