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https://issues.apache.org/jira/browse/FINERACT-1567?page=com.atlassian.jira.plugin.system.issuetabpanels:comment-tabpanel&focusedCommentId=17523365#comment-17523365
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Rahul Pawar commented on FINERACT-1567:
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[~francisguchie] [~ikimbrah] [~eroemma] , I have tested this feature
thoroughly, and also gone through the documentation (under "For Pre-mature
Closure"):
[https://docs.mifos.org/user-manual/for-administrators-mifos-x-platform/administration/products/recurring-deposit/recurring-deposit-product-fields]
and came to the conclusion that, this penalty interest feature works for a
penalty on *the "account's interest rate" and not on the amount.*
If penalty interest is more than interest rates (given for recurring accounts)
then instead of going negative, it considers 0% interest rate. For Example,
penalty interest is 10% and interest rate (given for recurring account) is 7%
it will considered as 0% interest given while closing the application
prematurely. and whole principal is allowed to withdraw with 0% interest
if penalty interest is 2% and interest rate (given for recurring account) is 7%
then interest given on the amount will be 5%.
> Apply penal interest For Pre-mature Closure
> -------------------------------------------
>
> Key: FINERACT-1567
> URL: https://issues.apache.org/jira/browse/FINERACT-1567
> Project: Apache Fineract
> Issue Type: Bug
> Components: Savings
> Reporter: Francis Guchie
> Assignee: Rahul Pawar
> Priority: Major
> Attachments: For Pre-mature Closure Apply Penal Interest.jpeg,
> image-2022-04-06-10-23-58-789.png
>
>
> !For Pre-mature Closure Apply Penal Interest.jpeg!
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