FINERACT-1443-loan-interest-recover-policy-fix-when-interest-more-than-EMI (#2033)

fineract-provider/src/main/java/org/apache/fineract/infrastructure/configuration/domain/ConfigurationDomainService.java

@@ -75,6 +75,10 @@ public interface ConfigurationDomainService {
 
     boolean isSkippingMeetingOnFirstDayOfMonthEnabled();
 
+    boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI();
+
+    boolean isPrincipalCompoundingDisabledForOverdueLoans();
+
     Long retreivePeroidInNumberOfDaysForSkipMeetingDate();
 
     boolean isChangeEmiIfRepaymentDateSameAsDisbursementDateEnabled();
@@ -97,8 +101,6 @@ public interface ConfigurationDomainService {
 
     boolean isFirstRepaymentDateAfterRescheduleAllowedOnHoliday();
 
-    boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI();
-
     String getAccountMappingForPaymentType();
 
     String getAccountMappingForCharge();

fineract-provider/src/main/java/org/apache/fineract/infrastructure/configuration/domain/ConfigurationDomainServiceJpa.java

@@ -259,8 +259,13 @@ public class ConfigurationDomainServiceJpa implements ConfigurationDomainService
     }
 
     @Override
-    public boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI() {
+    public boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI() {
-        return getGlobalConfigurationPropertyData("is-interest-to-be-appropriated-equally-when-greater-than-emi").isEnabled();
+        return getGlobalConfigurationPropertyData("is-interest-to-be-recovered-first-when-greater-than-emi").isEnabled();
+    }
+
+    @Override
+    public boolean isPrincipalCompoundingDisabledForOverdueLoans() {
+        return getGlobalConfigurationPropertyData("is-principal-compounding-disabled-for-overdue-loans").isEnabled();
     }
 
     @Override

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/data/ScheduleGeneratorDTO.java

@@ -44,7 +44,8 @@ public class ScheduleGeneratorDTO {
     final boolean isSkipRepaymentOnFirstDayofMonth;
     final Boolean isChangeEmiIfRepaymentDateSameAsDisbursementDateEnabled;
     final boolean isFirstRepaymentDateAllowedOnHoliday;
-    final boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI;
+    final boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI;
+    final boolean isPrincipalCompoundingDisabledForOverdueLoans;
 
     public ScheduleGeneratorDTO(final LoanScheduleGeneratorFactory loanScheduleFactory, final ApplicationCurrency applicationCurrency,
             final LocalDate calculatedRepaymentsStartingFromDate, final HolidayDetailDTO holidayDetailDTO,
@@ -53,7 +54,8 @@ public class ScheduleGeneratorDTO {
             final Calendar calendar, final CalendarHistoryDataWrapper calendarHistoryDataWrapper,
             final Boolean isInterestChargedFromDateAsDisbursementDateEnabled, final Integer numberOfdays,
             final boolean isSkipRepaymentOnFirstDayofMonth, final Boolean isChangeEmiIfRepaymentDateSameAsDisbursementDateEnabled,
-            final boolean isFirstRepaymentDateAllowedOnHoliday, final boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI) {
+            final boolean isFirstRepaymentDateAllowedOnHoliday, final boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI,
+            final boolean isPrincipalCompoundingDisabledForOverdueLoans) {
 
         this.loanScheduleFactory = loanScheduleFactory;
         this.applicationCurrency = applicationCurrency;
@@ -71,7 +73,8 @@ public class ScheduleGeneratorDTO {
         this.isSkipRepaymentOnFirstDayofMonth = isSkipRepaymentOnFirstDayofMonth;
         this.isChangeEmiIfRepaymentDateSameAsDisbursementDateEnabled = isChangeEmiIfRepaymentDateSameAsDisbursementDateEnabled;
         this.isFirstRepaymentDateAllowedOnHoliday = isFirstRepaymentDateAllowedOnHoliday;
-        this.isInterestToBeAppropriatedEquallyWhenGreaterThanEMI = isInterestToBeAppropriatedEquallyWhenGreaterThanEMI;
+        this.isInterestToBeRecoveredFirstWhenGreaterThanEMI = isInterestToBeRecoveredFirstWhenGreaterThanEMI;
+        this.isPrincipalCompoundingDisabledForOverdueLoans = isPrincipalCompoundingDisabledForOverdueLoans;
     }
 
     public LoanScheduleGeneratorFactory getLoanScheduleFactory() {
@@ -150,7 +153,11 @@ public class ScheduleGeneratorDTO {
         return isFirstRepaymentDateAllowedOnHoliday;
     }
 
-    public boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI() {
+    public boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI() {
-        return isInterestToBeAppropriatedEquallyWhenGreaterThanEMI;
+        return isInterestToBeRecoveredFirstWhenGreaterThanEMI;
+    }
+
+    public boolean isPrincipalCompoundingDisabledForOverdueLoans() {
+        return isPrincipalCompoundingDisabledForOverdueLoans;
     }
 }

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/domain/Loan.java

@@ -5623,7 +5623,8 @@ public class Loan extends AbstractPersistableCustom {
                 rescheduleStrategyMethod, calendar, getApprovedPrincipal(), annualNominalInterestRate, loanTermVariations,
                 calendarHistoryDataWrapper, scheduleGeneratorDTO.getNumberOfdays(), scheduleGeneratorDTO.isSkipRepaymentOnFirstDayofMonth(),
                 holidayDetailDTO, allowCompoundingOnEod, scheduleGeneratorDTO.isFirstRepaymentDateAllowedOnHoliday(),
-                scheduleGeneratorDTO.isInterestToBeAppropriatedEquallyWhenGreaterThanEMI(), this.fixedPrincipalPercentagePerInstallment);
+                scheduleGeneratorDTO.isInterestToBeRecoveredFirstWhenGreaterThanEMI(), this.fixedPrincipalPercentagePerInstallment,
+                scheduleGeneratorDTO.isPrincipalCompoundingDisabledForOverdueLoans());
         return loanApplicationTerms;
     }
 
@@ -5905,7 +5906,7 @@ public class Loan extends AbstractPersistableCustom {
                 compoundingCalendarInstance, compoundingFrequencyType, this.loanProduct.preCloseInterestCalculationStrategy(),
                 rescheduleStrategyMethod, loanCalendar, getApprovedPrincipal(), annualNominalInterestRate, loanTermVariations,
                 calendarHistoryDataWrapper, numberofdays, isSkipRepaymentonmonthFirst, holidayDetailDTO, allowCompoundingOnEod, false,
-                false, this.fixedPrincipalPercentagePerInstallment);
+                false, this.fixedPrincipalPercentagePerInstallment, false);
     }
 
     /**

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/AbstractLoanScheduleGenerator.java

@@ -286,8 +286,7 @@ public abstract class AbstractLoanScheduleGenerator implements LoanScheduleGener
 
             // will check for EMI amount greater than interest calculated
             if (loanApplicationTerms.getFixedEmiAmount() != null
-                    && loanApplicationTerms.getFixedEmiAmount().compareTo(principalInterestForThisPeriod.interest().getAmount()) < 0
+                    && loanApplicationTerms.getFixedEmiAmount().compareTo(principalInterestForThisPeriod.interest().getAmount()) < 0) {
-                    && !loanApplicationTerms.isInterestToBeAppropriatedEquallyWhenGreaterThanEMIEnabled()) {
                 String errorMsg = "EMI amount must be greater than : " + principalInterestForThisPeriod.interest().getAmount();
                 throw new MultiDisbursementEmiAmountException(errorMsg, principalInterestForThisPeriod.interest().getAmount(),
                         loanApplicationTerms.getFixedEmiAmount());
@@ -333,7 +332,9 @@ public abstract class AbstractLoanScheduleGenerator implements LoanScheduleGener
                     scheduleParams.getOutstandingBalance(), currentPeriodParams.getInterestForThisPeriod(),
                     currentPeriodParams.getFeeChargesForInstallment(), currentPeriodParams.getPenaltyChargesForInstallment(),
                     totalInstallmentDue, !isCompletePeriod);
-
+            if (principalInterestForThisPeriod.getRescheduleInterestPortion() != null) {
+                installment.setRescheduleInterestPortion(principalInterestForThisPeriod.getRescheduleInterestPortion().getAmount());
+            }
             addLoanRepaymentScheduleInstallment(scheduleParams.getInstallments(), installment);
             // apply loan transactions on installments to identify early/late
             // payments for interest recalculation
@@ -379,44 +380,6 @@ public abstract class AbstractLoanScheduleGenerator implements LoanScheduleGener
             scheduleParams.setTotalOutstandingInterestPaymentDueToGrace(Money.zero(currency));
         }
 
-        if (loanApplicationTerms.isInterestToBeAppropriatedEquallyWhenGreaterThanEMIEnabled()
-                && loanApplicationTerms.getInterestTobeApproppriated() != null
-                && loanApplicationTerms.getInterestTobeApproppriated().isGreaterThanZero()) {
-            int emisTobeChanged = 1;
-            for (LoanScheduleModelPeriod installment : (List<LoanScheduleModelPeriod>) periods) {
-                if (!installment.isEMIFixedSpecificToInstallment()) {
-                    emisTobeChanged++;
-                }
-            }
-            if (emisTobeChanged > 1) {
-                emisTobeChanged--;
-            }
-            Money interestTobeApproppriated = loanApplicationTerms.getInterestTobeApproppriated();
-            Money interestFraction = interestTobeApproppriated.dividedBy(emisTobeChanged, mc.getRoundingMode());
-            BigDecimal roundFraction = interestFraction.getAmount().remainder(BigDecimal.ONE);
-            interestFraction = interestFraction.minus(roundFraction);
-            for (LoanScheduleModelPeriod installment : (List<LoanScheduleModelPeriod>) periods) {
-                if (!installment.isEMIFixedSpecificToInstallment()) {
-                    installment.addInterestAmount(interestFraction);
-                    installment.setRescheduleInterestPortion(interestFraction.getAmount());
-                    interestTobeApproppriated = interestTobeApproppriated.minus(interestFraction);
-                }
-            }
-            LoanScheduleModelPeriod lastInstallment = ((List<LoanScheduleModelPeriod>) periods).get(periods.size() - 1);
-
-            if (interestTobeApproppriated.isGreaterThanZero()) {
-                lastInstallment.addInterestAmount(interestTobeApproppriated);
-                BigDecimal rescheduleInterestPortion = BigDecimal.ZERO;
-                if (lastInstallment.rescheduleInterestPortion() != null) {
-                    rescheduleInterestPortion = lastInstallment.rescheduleInterestPortion();
-                }
-                lastInstallment.setRescheduleInterestPortion(rescheduleInterestPortion.add(interestTobeApproppriated.getAmount()));
-            }
-            scheduleParams.addTotalRepaymentExpected(loanApplicationTerms.getInterestTobeApproppriated());
-            scheduleParams.addTotalCumulativeInterest(loanApplicationTerms.getInterestTobeApproppriated());
-            loanApplicationTerms.setInterestTobeApproppriated(Money.zero(currency));
-        }
-
         // determine fees and penalties for charges which depends on total
         // loan interest
         updatePeriodsWithCharges(currency, scheduleParams, periods, nonCompoundingCharges);
@@ -1054,6 +1017,7 @@ public abstract class AbstractLoanScheduleGenerator implements LoanScheduleGener
                 modifiedScheduledDueDate = loanTermVariationsData.getDateValue();
                 if (!loanTermVariationsData.isSpecificToInstallment()) {
                     scheduleParams.setActualRepaymentDate(modifiedScheduledDueDate);
+                    loanApplicationTerms.setNewScheduledDueDateStart(modifiedScheduledDueDate);
                 }
                 loanTermVariationsData.setProcessed(true);
             }
@@ -2397,23 +2361,11 @@ public abstract class AbstractLoanScheduleGenerator implements LoanScheduleGener
             periods.clear();
         }
 
-        BigDecimal rescheuleInterestPortionTobeRetained = BigDecimal.ZERO;
+        if (retainedInstallments.size() > 0
-        for (LoanRepaymentScheduleInstallment retainedInstallment : retainedInstallments) {
+                && retainedInstallments.get(retainedInstallments.size() - 1).getRescheduleInterestPortion() != null) {
-            if (retainedInstallment.getRescheduleInterestPortion() != null) {
+            loanApplicationTerms.setInterestTobeApproppriated(
-                rescheuleInterestPortionTobeRetained = rescheuleInterestPortionTobeRetained
+                    Money.of(loan.getCurrency(), retainedInstallments.get(retainedInstallments.size() - 1).getRescheduleInterestPortion()));
-                        .add(retainedInstallment.getRescheduleInterestPortion());
-            }
         }
-
-        BigDecimal rescheuleInterestPortionTotal = BigDecimal.ZERO;
-        for (LoanRepaymentScheduleInstallment inst : loan.getRepaymentScheduleInstallments()) {
-            if (inst.getRescheduleInterestPortion() != null) {
-                rescheuleInterestPortionTotal = rescheuleInterestPortionTotal.add(inst.getRescheduleInterestPortion());
-            }
-        }
-
-        BigDecimal rescheuleInterestPortionTobeAppropriated = rescheuleInterestPortionTotal.subtract(rescheuleInterestPortionTobeRetained);
-        loanApplicationTerms.setInterestTobeApproppriated(Money.of(loan.getCurrency(), rescheuleInterestPortionTobeAppropriated));
         LoanScheduleModel loanScheduleModel = generate(mc, loanApplicationTerms, loan.charges(), holidayDetailDTO, loanScheduleParams);
 
         for (LoanScheduleModelPeriod loanScheduleModelPeriod : loanScheduleModel.getPeriods()) {
@@ -2640,8 +2592,8 @@ public abstract class AbstractLoanScheduleGenerator implements LoanScheduleGener
             final HolidayDetailDTO holidayDetailDTO) {
         LocalDate nextScheduleDate = null;
         if (loanApplicationTerms.getRecalculationFrequencyType().isSameAsRepayment()) {
-            nextScheduleDate = this.scheduledDateGenerator.generateNextScheduleDateStartingFromDisburseDate(startDate, loanApplicationTerms,
+            nextScheduleDate = this.scheduledDateGenerator.generateNextScheduleDateStartingFromDisburseDateOrRescheduleDate(startDate,
-                    holidayDetailDTO);
+                    loanApplicationTerms, holidayDetailDTO);
         } else {
             CalendarInstance calendarInstance = loanApplicationTerms.getRestCalendarInstance();
             nextScheduleDate = CalendarUtils.getNextScheduleDate(calendarInstance.getCalendar(), startDate);

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/DecliningBalanceInterestLoanScheduleGenerator.java

@@ -113,7 +113,11 @@ public class DecliningBalanceInterestLoanScheduleGenerator extends AbstractLoanS
                         compoundFee = compoundingMap.get(principal.getKey());
                         compoundingMap.put(principal.getKey(), interestToBeCompounded.plus(compoundFee));
                     }
-                    balanceForInterestCalculation = balanceForInterestCalculation.plus(principal.getValue()).plus(compoundFee);
+                    if (!loanApplicationTerms.isPrincipalCompoundingDisabledForOverdueLoans()) {
+                        balanceForInterestCalculation = balanceForInterestCalculation.plus(principal.getValue());
+                    }
+                    balanceForInterestCalculation = balanceForInterestCalculation.plus(compoundFee);
+
                     if (interestRates.containsKey(principal.getKey())) {
                         loanApplicationTerms.updateAnnualNominalInterestRate(interestRates.get(principal.getKey()));
                     }
@@ -128,42 +132,27 @@ public class DecliningBalanceInterestLoanScheduleGenerator extends AbstractLoanS
         interestForThisInstallment = interestForThisInstallment.plus(result.interest());
         cumulatingInterestDueToGrace = result.interestPaymentDueToGrace();
 
-        Money interestTobeApproppriated = loanApplicationTerms.getInterestTobeApproppriated() == null
+        if (loanApplicationTerms.isInterestToBeRecoveredFirstWhenGreaterThanEMIEnabled()
-                ? Money.zero(interestForThisInstallment.getCurrency())
+                && loanApplicationTerms.isInterestTobeApproppriated()) {
-                : loanApplicationTerms.getInterestTobeApproppriated();
+            interestForThisInstallment = interestForThisInstallment.add(loanApplicationTerms.getInterestTobeApproppriated());
-
+            loanApplicationTerms.setInterestTobeApproppriated(interestForThisInstallment.zero());
-        if (loanApplicationTerms.getFixedEmiAmount() != null
-                && loanApplicationTerms.isInterestToBeAppropriatedEquallyWhenGreaterThanEMIEnabled() && interestForThisInstallment
-                        .isGreaterThan(Money.of(interestForThisInstallment.getCurrency(), loanApplicationTerms.getFixedEmiAmount()))) {
-            LocalDate actualPeriodEndDate = this.scheduledDateGenerator.generateNextRepaymentDate(interestStartDate, loanApplicationTerms,
-                    false);
-            PrincipalInterest tempInterest = loanApplicationTerms.calculateTotalInterestForPeriod(calculator,
-                    interestCalculationGraceOnRepaymentPeriodFraction, periodNumber, mc, cumulatingInterestDueToGrace,
-                    balanceForInterestCalculation, interestStartDate, actualPeriodEndDate);
-
-            Money fixedEmi = Money.of(interestForThisInstallment.getCurrency(), loanApplicationTerms.getFixedEmiAmount());
-
-            if (tempInterest.interest().isGreaterThan(fixedEmi)) {
-                loanApplicationTerms
-                        .setInterestTobeApproppriated(interestTobeApproppriated.plus(interestForThisInstallment.minus(fixedEmi)));
-                interestForThisInstallment = fixedEmi;
-            } else {
-                loanApplicationTerms.setInterestTobeApproppriated(
-                        interestTobeApproppriated.plus(interestForThisInstallment.minus(tempInterest.interest())));
-                interestForThisInstallment = tempInterest.interest();
-            }
         }
 
-        cumulatingInterestDueToGrace = result.interestPaymentDueToGrace();
-
         Money interestForPeriod = interestForThisInstallment;
         if (interestForPeriod.isGreaterThanZero()) {
             interestForPeriod = interestForPeriod.minus(cumulatingInterestPaymentDueToGrace);
         } else {
             interestForPeriod = cumulatingInterestDueToGrace.minus(cumulatingInterestPaymentDueToGrace);
         }
+
         Money principalForThisInstallment = loanApplicationTerms.calculateTotalPrincipalForPeriod(calculator, outstandingBalance,
                 periodNumber, mc, interestForPeriod);
+        if (loanApplicationTerms.isInterestToBeRecoveredFirstWhenGreaterThanEMIEnabled() && principalForThisInstallment.isLessThanZero()
+                && !loanApplicationTerms.isLastRepaymentPeriod(periodNumber)) {
+            loanApplicationTerms.setInterestTobeApproppriated(principalForThisInstallment.abs());
+            interestForThisInstallment = interestForThisInstallment.minus(loanApplicationTerms.getInterestTobeApproppriated());
+            principalForThisInstallment = principalForThisInstallment.zero();
+        }
 
         // update cumulative fields for principal & interest
         final Money interestBroughtFowardDueToGrace = cumulatingInterestDueToGrace;
@@ -173,6 +162,9 @@ public class DecliningBalanceInterestLoanScheduleGenerator extends AbstractLoanS
         principalForThisInstallment = loanApplicationTerms.adjustPrincipalIfLastRepaymentPeriod(principalForThisInstallment,
                 totalCumulativePrincipalToDate, periodNumber);
 
-        return new PrincipalInterest(principalForThisInstallment, interestForThisInstallment, interestBroughtFowardDueToGrace);
+        PrincipalInterest principalInterest = new PrincipalInterest(principalForThisInstallment, interestForThisInstallment,
+                interestBroughtFowardDueToGrace);
+        principalInterest.setRescheduleInterestPortion(loanApplicationTerms.getInterestTobeApproppriated());
+        return principalInterest;
     }
 }

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/DefaultScheduledDateGenerator.java

@@ -327,4 +327,22 @@ public class DefaultScheduledDateGenerator implements ScheduledDateGenerator {
         generatedDate = adjustRepaymentDate(generatedDate, loanApplicationTerms, holidayDetailDTO).getChangedScheduleDate();
         return generatedDate;
     }
+
+    @Override
+    public LocalDate generateNextScheduleDateStartingFromDisburseDateOrRescheduleDate(LocalDate lastRepaymentDate,
+            LoanApplicationTerms loanApplicationTerms, final HolidayDetailDTO holidayDetailDTO) {
+
+        LocalDate generatedDate = loanApplicationTerms.getExpectedDisbursementDate();
+        boolean isFirstRepayment = true;
+        if (loanApplicationTerms.getNewScheduledDueDateStart() != null) {
+            generatedDate = loanApplicationTerms.getNewScheduledDueDateStart();
+            isFirstRepayment = false;
+        }
+        while (!generatedDate.isAfter(lastRepaymentDate)) {
+            generatedDate = generateNextRepaymentDate(generatedDate, loanApplicationTerms, isFirstRepayment);
+            isFirstRepayment = false;
+        }
+        generatedDate = adjustRepaymentDate(generatedDate, loanApplicationTerms, holidayDetailDTO).getChangedScheduleDate();
+        return generatedDate;
+    }
 }

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/LoanApplicationTerms.java

@@ -188,7 +188,9 @@ public final class LoanApplicationTerms {
 
     private final boolean isFirstRepaymentDateAllowedOnHoliday;
 
-    private final boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI;
+    private final boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI;
+
+    private boolean isPrincipalCompoundingDisabledForOverdueLoans;
 
     private final HolidayDetailDTO holidayDetailDTO;
 
@@ -209,6 +211,8 @@ public final class LoanApplicationTerms {
     private Money interestTobeApproppriated;
     private final BigDecimal fixedPrincipalPercentagePerInstallment;
 
+    private LocalDate newScheduledDueDateStart;
+
     public static LoanApplicationTerms assembleFrom(final ApplicationCurrency currency, final Integer loanTermFrequency,
             final PeriodFrequencyType loanTermPeriodFrequencyType, final Integer numberOfRepayments, final Integer repaymentEvery,
             final PeriodFrequencyType repaymentPeriodFrequencyType, Integer nthDay, DayOfWeekType weekDayType,
@@ -230,7 +234,8 @@ public final class LoanApplicationTerms {
             BigDecimal approvedAmount, List<LoanTermVariationsData> loanTermVariations,
             Boolean isInterestChargedFromDateSameAsDisbursalDateEnabled, final Integer numberOfDays,
             boolean isSkipRepaymentOnFirstDayOfMonth, final HolidayDetailDTO holidayDetailDTO, final boolean allowCompoundingOnEod,
-            final boolean isEqualAmortization, final BigDecimal fixedPrincipalPercentagePerInstallment) {
+            final boolean isEqualAmortization, final boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI,
+            final BigDecimal fixedPrincipalPercentagePerInstallment, final boolean isPrincipalCompoundingDisabledForOverdueLoans) {
 
         final LoanRescheduleStrategyMethod rescheduleStrategyMethod = null;
         final CalendarHistoryDataWrapper calendarHistoryDataWrapper = null;
@@ -245,8 +250,9 @@ public final class LoanApplicationTerms {
                 recalculationFrequencyType, compoundingCalendarInstance, compoundingFrequencyType, principalThresholdForLastInstalment,
                 installmentAmountInMultiplesOf, preClosureInterestCalculationStrategy, loanCalendar, approvedAmount, loanTermVariations,
                 calendarHistoryDataWrapper, isInterestChargedFromDateSameAsDisbursalDateEnabled, numberOfDays,
-                isSkipRepaymentOnFirstDayOfMonth, holidayDetailDTO, allowCompoundingOnEod, isEqualAmortization, false, false,
+                isSkipRepaymentOnFirstDayOfMonth, holidayDetailDTO, allowCompoundingOnEod, isEqualAmortization, false,
-                fixedPrincipalPercentagePerInstallment);
+                isInterestToBeRecoveredFirstWhenGreaterThanEMI, fixedPrincipalPercentagePerInstallment,
+                isPrincipalCompoundingDisabledForOverdueLoans);
 
     }
 
@@ -273,7 +279,7 @@ public final class LoanApplicationTerms {
                 compoundingMethod, compoundingCalendarInstance, compoundingFrequencyType, loanPreClosureInterestCalculationStrategy,
                 rescheduleStrategyMethod, loanCalendar, approvedAmount, annualNominalInterestRate, loanTermVariations,
                 calendarHistoryDataWrapper, numberOfDays, isSkipRepaymentOnFirstDayOfMonth, holidayDetailDTO, allowCompoundingOnEod, false,
-                false, null);
+                false, null, false);
     }
 
     public static LoanApplicationTerms assembleFrom(final ApplicationCurrency applicationCurrency, final Integer loanTermFrequency,
@@ -291,8 +297,8 @@ public final class LoanApplicationTerms {
             BigDecimal annualNominalInterestRate, final List<LoanTermVariationsData> loanTermVariations,
             final CalendarHistoryDataWrapper calendarHistoryDataWrapper, final Integer numberOfDays,
             final boolean isSkipRepaymentOnFirstDayOfMonth, final HolidayDetailDTO holidayDetailDTO, final boolean allowCompoundingOnEod,
-            final boolean isFirstRepaymentDateAllowedOnHoliday, final boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI,
+            final boolean isFirstRepaymentDateAllowedOnHoliday, final boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI,
-            final BigDecimal fixedPrincipalPercentagePerInstallment) {
+            final BigDecimal fixedPrincipalPercentagePerInstallment, final boolean isPrincipalCompoundingDisabledForOverdueLoans) {
 
         final Integer numberOfRepayments = loanProductRelatedDetail.getNumberOfRepayments();
         final Integer repaymentEvery = loanProductRelatedDetail.getRepayEvery();
@@ -331,7 +337,8 @@ public final class LoanApplicationTerms {
                 loanPreClosureInterestCalculationStrategy, loanCalendar, approvedAmount, loanTermVariations, calendarHistoryDataWrapper,
                 isInterestChargedFromDateSameAsDisbursalDateEnabled, numberOfDays, isSkipRepaymentOnFirstDayOfMonth, holidayDetailDTO,
                 allowCompoundingOnEod, isEqualAmortization, isFirstRepaymentDateAllowedOnHoliday,
-                isInterestToBeAppropriatedEquallyWhenGreaterThanEMI, fixedPrincipalPercentagePerInstallment);
+                isInterestToBeRecoveredFirstWhenGreaterThanEMI, fixedPrincipalPercentagePerInstallment,
+                isPrincipalCompoundingDisabledForOverdueLoans);
     }
 
     public static LoanApplicationTerms assembleFrom(final ApplicationCurrency applicationCurrency, final Integer loanTermFrequency,
@@ -390,7 +397,7 @@ public final class LoanApplicationTerms {
                 recalculationFrequencyType, compoundingCalendarInstance, compoundingFrequencyType, principalThresholdForLastInstalment,
                 installmentAmountInMultiplesOf, loanPreClosureInterestCalculationStrategy, loanCalendar, approvedAmount, loanTermVariations,
                 calendarHistoryDataWrapper, isInterestChargedFromDateSameAsDisbursalDateEnabled, numberOfDays,
-                isSkipRepaymentOnFirstDayOfMonth, holidayDetailDTO, allowCompoundingOnEod, isEqualAmortization, false, false, null);
+                isSkipRepaymentOnFirstDayOfMonth, holidayDetailDTO, allowCompoundingOnEod, isEqualAmortization, false, false, null, false);
 
     }
 
@@ -417,8 +424,8 @@ public final class LoanApplicationTerms {
                 applicationTerms.calendarHistoryDataWrapper, applicationTerms.isInterestChargedFromDateSameAsDisbursalDateEnabled,
                 applicationTerms.numberOfDays, applicationTerms.isSkipRepaymentOnFirstDayOfMonth, applicationTerms.holidayDetailDTO,
                 applicationTerms.allowCompoundingOnEod, applicationTerms.isEqualAmortization,
-                applicationTerms.isFirstRepaymentDateAllowedOnHoliday, applicationTerms.isInterestToBeAppropriatedEquallyWhenGreaterThanEMI,
+                applicationTerms.isFirstRepaymentDateAllowedOnHoliday, applicationTerms.isInterestToBeRecoveredFirstWhenGreaterThanEMI,
-                applicationTerms.fixedPrincipalPercentagePerInstallment);
+                applicationTerms.fixedPrincipalPercentagePerInstallment, applicationTerms.isPrincipalCompoundingDisabledForOverdueLoans);
     }
 
     private LoanApplicationTerms(final ApplicationCurrency currency, final Integer loanTermFrequency,
@@ -443,7 +450,8 @@ public final class LoanApplicationTerms {
             final CalendarHistoryDataWrapper calendarHistoryDataWrapper, Boolean isInterestChargedFromDateSameAsDisbursalDateEnabled,
             final Integer numberOfDays, final boolean isSkipRepaymentOnFirstDayOfMonth, final HolidayDetailDTO holidayDetailDTO,
             final boolean allowCompoundingOnEod, final boolean isEqualAmortization, final boolean isFirstRepaymentDateAllowedOnHoliday,
-            final boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI, final BigDecimal fixedPrincipalPercentagePerInstallment) {
+            final boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI, final BigDecimal fixedPrincipalPercentagePerInstallment,
+            final boolean isPrincipalCompoundingDisabledForOverdueLoans) {
 
         this.currency = currency;
         this.loanTermFrequency = loanTermFrequency;
@@ -517,8 +525,9 @@ public final class LoanApplicationTerms {
         this.totalPrincipalAccounted = principal.zero();
         this.isEqualAmortization = isEqualAmortization;
         this.isFirstRepaymentDateAllowedOnHoliday = isFirstRepaymentDateAllowedOnHoliday;
-        this.isInterestToBeAppropriatedEquallyWhenGreaterThanEMI = isInterestToBeAppropriatedEquallyWhenGreaterThanEMI;
+        this.isInterestToBeRecoveredFirstWhenGreaterThanEMI = isInterestToBeRecoveredFirstWhenGreaterThanEMI;
         this.fixedPrincipalPercentagePerInstallment = fixedPrincipalPercentagePerInstallment;
+        this.isPrincipalCompoundingDisabledForOverdueLoans = isPrincipalCompoundingDisabledForOverdueLoans;
     }
 
     public Money adjustPrincipalIfLastRepaymentPeriod(final Money principalForPeriod, final Money totalCumulativePrincipalToDate,
@@ -743,6 +752,10 @@ public final class LoanApplicationTerms {
         return periodNumber == numberOfRepayments;
     }
 
+    public boolean isLastRepaymentPeriod(final int periodNumber) {
+        return periodNumber == this.actualNumberOfRepayments;
+    }
+
     /**
      * general method to calculate totalInterestDue discounting any grace settings
      */
@@ -1248,7 +1261,7 @@ public final class LoanApplicationTerms {
         Money interestDue = Money.zero(outstandingBalance.getCurrency());
 
         final BigDecimal periodicInterestRate = periodicInterestRate(calculator, mc, this.daysInMonthType, this.daysInYearType,
-                periodStartDate, periodEndDate);
+                periodStartDate, periodEndDate);// 0.021232877 ob:14911.64
         interestDue = outstandingBalance.multiplyRetainScale(periodicInterestRate, mc.getRoundingMode());
 
         return interestDue;
@@ -1334,7 +1347,6 @@ public final class LoanApplicationTerms {
 
     private Money calculatePrincipalDueForInstallment(final int periodNumber, final Money totalDuePerInstallment,
             final Money periodInterest) {
-
         Money principal = totalDuePerInstallment.minus(periodInterest);
         if (isPrincipalGraceApplicableForThisPeriod(periodNumber)) {
             principal = principal.zero();
@@ -1795,15 +1807,30 @@ public final class LoanApplicationTerms {
     }
 
     public Money getInterestTobeApproppriated() {
-        return interestTobeApproppriated;
+        return interestTobeApproppriated == null ? this.principal.zero() : interestTobeApproppriated;
     }
 
     public void setInterestTobeApproppriated(Money interestTobeApproppriated) {
         this.interestTobeApproppriated = interestTobeApproppriated;
     }
 
-    public boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMIEnabled() {
+    public Boolean isInterestTobeApproppriated() {
-        return isInterestToBeAppropriatedEquallyWhenGreaterThanEMI;
+        return interestTobeApproppriated != null && interestTobeApproppriated.isGreaterThanZero();
     }
 
+    public boolean isInterestToBeRecoveredFirstWhenGreaterThanEMIEnabled() {
+        return isInterestToBeRecoveredFirstWhenGreaterThanEMI;
+    }
+
+    public boolean isPrincipalCompoundingDisabledForOverdueLoans() {
+        return isPrincipalCompoundingDisabledForOverdueLoans;
+    }
+
+    public LocalDate getNewScheduledDueDateStart() {
+        return newScheduledDueDateStart;
+    }
+
+    public void setNewScheduledDueDateStart(LocalDate newScheduledDueDateStart) {
+        this.newScheduledDueDateStart = newScheduledDueDateStart;
+    }
 }

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/PrincipalInterest.java

@@ -25,6 +25,7 @@ public class PrincipalInterest {
     private final Money principal;
     private final Money interest;
     private final Money interestPaymentDueToGrace;
+    private Money rescheduleInterestPortion;
 
     public PrincipalInterest(final Money principal, final Money interest, final Money interestPaymentDueToGrace) {
         this.principal = principal;
@@ -43,4 +44,12 @@ public class PrincipalInterest {
     public Money interestPaymentDueToGrace() {
         return this.interestPaymentDueToGrace;
     }
+
+    public Money getRescheduleInterestPortion() {
+        return rescheduleInterestPortion;
+    }
+
+    public void setRescheduleInterestPortion(Money rescheduleInterestPortion) {
+        this.rescheduleInterestPortion = rescheduleInterestPortion;
+    }
 }

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/domain/ScheduledDateGenerator.java

@@ -43,4 +43,7 @@ public interface ScheduledDateGenerator {
 
     LocalDate generateNextScheduleDateStartingFromDisburseDate(LocalDate lastRepaymentDate, LoanApplicationTerms loanApplicationTerms,
             HolidayDetailDTO holidayDetailDTO);
+
+    LocalDate generateNextScheduleDateStartingFromDisburseDateOrRescheduleDate(LocalDate lastRepaymentDate,
+            LoanApplicationTerms loanApplicationTerms, HolidayDetailDTO holidayDetailDTO);
 }

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/loanschedule/service/LoanScheduleAssembler.java

@@ -448,7 +448,10 @@ public class LoanScheduleAssembler {
                 Date.from(expectedDisbursementDate.atStartOfDay(ZoneId.systemDefault()).toInstant()), HolidayStatusType.ACTIVE.getValue());
         final WorkingDays workingDays = this.workingDaysRepository.findOne();
         HolidayDetailDTO detailDTO = new HolidayDetailDTO(isHolidayEnabled, holidays, workingDays);
-
+        final boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI = this.configurationDomainService
+                .isInterestToBeRecoveredFirstWhenGreaterThanEMI();
+        final boolean isPrincipalCompoundingDisabledForOverdueLoans = this.configurationDomainService
+                .isPrincipalCompoundingDisabledForOverdueLoans();
         return LoanApplicationTerms.assembleFrom(applicationCurrency, loanTermFrequency, loanTermPeriodFrequencyType, numberOfRepayments,
                 repaymentEvery, repaymentPeriodFrequencyType, nthDay, weekDayType, amortizationMethod, interestMethod,
                 interestRatePerPeriod, interestRatePeriodFrequencyType, annualNominalInterestRate, interestCalculationPeriodMethod,
@@ -460,7 +463,8 @@ public class LoanScheduleAssembler {
                 compoundingMethod, compoundingCalendarInstance, compoundingFrequencyType, principalThresholdForLastInstalment,
                 installmentAmountInMultiplesOf, loanProduct.preCloseInterestCalculationStrategy(), calendar, BigDecimal.ZERO,
                 loanTermVariations, isInterestChargedFromDateSameAsDisbursalDateEnabled, numberOfDays, isSkipMeetingOnFirstDay, detailDTO,
-                allowCompoundingOnEod, isEqualAmortization, fixedPrincipalPercentagePerInstallment);
+                allowCompoundingOnEod, isEqualAmortization, isInterestToBeRecoveredFirstWhenGreaterThanEMI,
+                fixedPrincipalPercentagePerInstallment, isPrincipalCompoundingDisabledForOverdueLoans);
     }
 
     private CalendarInstance createCalendarForSameAsRepayment(final Integer repaymentEvery,

fineract-provider/src/main/java/org/apache/fineract/portfolio/loanaccount/service/LoanUtilService.java

@@ -144,15 +144,17 @@ public class LoanUtilService {
         boolean isFirstRepaymentDateAllowedOnHoliday = this.configurationDomainService
                 .isFirstRepaymentDateAfterRescheduleAllowedOnHoliday();
 
-        boolean isInterestToBeAppropriatedEquallyWhenGreaterThanEMI = this.configurationDomainService
+        boolean isInterestToBeRecoveredFirstWhenGreaterThanEMI = this.configurationDomainService
-                .isInterestToBeAppropriatedEquallyWhenGreaterThanEMI();
+                .isInterestToBeRecoveredFirstWhenGreaterThanEMI();
+        boolean isPrincipalCompoundingDisabledForOverdueLoans = this.configurationDomainService
+                .isPrincipalCompoundingDisabledForOverdueLoans();
 
         ScheduleGeneratorDTO scheduleGeneratorDTO = new ScheduleGeneratorDTO(loanScheduleFactory, applicationCurrency,
                 calculatedRepaymentsStartingFromDate, holidayDetails, restCalendarInstance, compoundingCalendarInstance, recalculateFrom,
                 overdurPenaltyWaitPeriod, floatingRateDTO, calendar, calendarHistoryDataWrapper,
                 isInterestChargedFromDateAsDisbursementDateEnabled, numberOfDays, isSkipRepaymentOnFirstMonth,
                 isChangeEmiIfRepaymentDateSameAsDisbursementDateEnabled, isFirstRepaymentDateAllowedOnHoliday,
-                isInterestToBeAppropriatedEquallyWhenGreaterThanEMI);
+                isInterestToBeRecoveredFirstWhenGreaterThanEMI, isPrincipalCompoundingDisabledForOverdueLoans);
 
         return scheduleGeneratorDTO;
     }

fineract-provider/src/main/resources/sql/migrations/core_db/V392__interest_recovery_conf_for_rescedule.sql

@@ -0,0 +1,29 @@
+--
+-- Licensed to the Apache Software Foundation (ASF) under one
+-- or more contributor license agreements. See the NOTICE file
+-- distributed with this work for additional information
+-- regarding copyright ownership. The ASF licenses this file
+-- to you under the Apache License, Version 2.0 (the
+-- "License"); you may not use this file except in compliance
+-- with the License. You may obtain a copy of the License at
+--
+-- http://www.apache.org/licenses/LICENSE-2.0
+--
+-- Unless required by applicable law or agreed to in writing,
+-- software distributed under the License is distributed on an
+-- "AS IS" BASIS, WITHOUT WARRANTIES OR CONDITIONS OF ANY
+-- KIND, either express or implied. See the License for the
+-- specific language governing permissions and limitations
+-- under the License.
+--
+
+delete from c_configuration where name = 'is-interest-to-be-appropriated-equally-when-greater-than-emi';
+
+INSERT INTO `c_configuration` (`name`, `value`, `date_value`, `enabled`, `is_trap_door`, `description`)
+VALUES
+    ('is-interest-to-be-recovered-first-when-greater-than-emi', 0, NULL, 0, 0, 'If enabled, when interest amount is greater than EMI, the additional interest is recovered first before princupal');
+
+
+INSERT INTO `c_configuration` (`name`, `value`, `date_value`, `enabled`, `is_trap_door`, `description`)
+VALUES
+    ('is-principal-compounding-disabled-for-overdue-loans', 0, NULL, 0, 0, 'If enabled, it donot consider principal of an upaid installment for calculating interest of next installment. this is for testing back-dated loan sshedule');

integration-tests/src/test/java/org/apache/fineract/integrationtests/LoanRescheduleOnDecliningBalanceLoanTest.java

@@ -225,31 +225,31 @@ public class LoanRescheduleOnDecliningBalanceLoanTest {
     }
 
     /**
-     * enables the configuration `is-interest-to-be-appropriated-equally-when-greater-than-emi`
+     * enables the configuration `is-interest-to-be-recovered-first-when-greater-than-emi`
      **/
     private void enableConfig() {
-        GlobalConfigurationHelper.updateEnabledFlagForGlobalConfiguration(this.requestSpec, this.responseSpec, "34", true);
+        GlobalConfigurationHelper.updateEnabledFlagForGlobalConfiguration(this.requestSpec, this.responseSpec, "42", true);
     }
 
     /**
-     * disables the configuration `is-interest-to-be-appropriated-equally-when-greater-than-emi`
+     * disables the configuration `is-interest-to-be-recovered-first-when-greater-than-emi`
      **/
     private void disableConfig() {
-        GlobalConfigurationHelper.updateEnabledFlagForGlobalConfiguration(this.requestSpec, this.responseSpec, "34", false);
+        GlobalConfigurationHelper.updateEnabledFlagForGlobalConfiguration(this.requestSpec, this.responseSpec, "42", false);
     }
 
     @Test
     public void testCreateLoanRescheduleRequestWithInterestAppropriation() {
         // create all required entities
         this.createRequiredEntities();
-        this.createAndApproveLoanRescheduleRequestForInterestAppropriation();
+        this.createAndApproveLoanRescheduleRequestForRecoverInterestInterestFirst();
 
     }
 
     /**
      * create new loan reschedule request
      **/
-    private void createAndApproveLoanRescheduleRequestForInterestAppropriation() {
+    private void createAndApproveLoanRescheduleRequestForRecoverInterestInterestFirst() {
         LOG.info(
                 "---------------------------------CREATING LOAN RESCHEDULE REQUEST FOR INTEREST APPROPRIATTION-------------------------------------");
 
@@ -279,8 +279,8 @@ public class LoanRescheduleOnDecliningBalanceLoanTest {
         final HashMap loanSummary = this.loanTransactionHelper.getLoanSummary(requestSpec, generalResponseSpec, loanId);
         final Float totalExpectedRepayment = (Float) loanSummary.get("totalExpectedRepayment");
 
-        assertEquals(12186, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT is NOK");
+        assertEquals(10831, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT is NOK");
-        assertEquals(123682, totalExpectedRepayment.intValue(), "TOTAL EXPECTED REPAYMENT is NOK");
+        assertEquals(125184, totalExpectedRepayment.intValue(), "TOTAL EXPECTED REPAYMENT is NOK");
 
         LOG.info("Successfully approved loan reschedule request (ID: {})", this.loanRescheduleRequestId);
 
@@ -327,7 +327,7 @@ public class LoanRescheduleOnDecliningBalanceLoanTest {
         final HashMap loanSummary = this.loanTransactionHelper.getLoanSummary(requestSpec, generalResponseSpec, loanId);
         final Float totalExpectedRepayment = (Float) loanSummary.get("totalExpectedRepayment");
 
-        assertEquals(12326, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT is NOK");
+        assertEquals(10831, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT is NOK");
         assertEquals(131512, totalExpectedRepayment.intValue(), "TOTAL EXPECTED REPAYMENT is NOK");
 
         LOG.info("Successfully approved loan reschedule request (ID: {})", this.loanRescheduleRequestId);
@@ -338,13 +338,13 @@ public class LoanRescheduleOnDecliningBalanceLoanTest {
     public void testCreateLoanRescheduleRequestForInterestAppropriationAndFixedEMI() {
         // create all required entities
         this.createRequiredEntities();
-        this.createAndApproveLoanRescheduleRequestForInterestAppropriationAndFixedEMI();
+        this.createAndApproveLoanRescheduleRequestForRecoverInterestFirstAndFixedEMI();
     }
 
     /**
-     * create new loan reschedule request with combination of date change, interest appropriation and fixed emi
+     * create new loan reschedule request with combination of date change, recover interest first and fixed emi
      **/
-    private void createAndApproveLoanRescheduleRequestForInterestAppropriationAndFixedEMI() {
+    private void createAndApproveLoanRescheduleRequestForRecoverInterestFirstAndFixedEMI() {
         LOG.info(
                 "---------------------------------CREATING LOAN RESCHEDULE REQUEST FOR INTEREST APPROPRIATTION-------------------------------------");
 
@@ -379,8 +379,8 @@ public class LoanRescheduleOnDecliningBalanceLoanTest {
 
         assertEquals(5000, totalFixedDueForPeriod.intValue(), "EXPECTED FIXED REPAYMENT is NOK");
 
-        assertEquals(15316, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT is NOK");
+        assertEquals(15417, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT is NOK");
-        assertEquals(120806, totalExpectedRepayment.intValue(), "TOTAL EXPECTED REPAYMENT is NOK");
+        assertEquals(121412, totalExpectedRepayment.intValue(), "TOTAL EXPECTED REPAYMENT is NOK");
 
         LOG.info("Successfully approved loan reschedule request (ID: {})", this.loanRescheduleRequestId);
 
@@ -390,7 +390,7 @@ public class LoanRescheduleOnDecliningBalanceLoanTest {
     public void testCreateLoanRescheduleRequestWithMultpleInterestAppropriation() {
         // create all required entities
         this.createRequiredEntities();
-        this.createAndApproveLoanRescheduleRequestForInterestAppropriation();
+        this.createAndApproveLoanRescheduleRequestForRecoverInterestInterestFirst();
 
         this.createAndApproveLoanRescheduleRequestForSecondInterestAppropriation();
 
@@ -429,9 +429,105 @@ public class LoanRescheduleOnDecliningBalanceLoanTest {
         final HashMap loanSummary = this.loanTransactionHelper.getLoanSummary(requestSpec, generalResponseSpec, loanId);
         final Float totalExpectedRepayment = (Float) loanSummary.get("totalExpectedRepayment");
 
-        assertEquals(12187, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT in Second Reschedule is NOK");
+        assertEquals(10831, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT in Second Reschedule is NOK");
-        assertEquals(130750, totalExpectedRepayment.intValue(), "TOTAL EXPECTED in Second Reschedule REPAYMENT is NOK");
+        assertEquals(133470, totalExpectedRepayment.intValue(), "TOTAL EXPECTED in Second Reschedule REPAYMENT is NOK");
 
         LOG.info("Successfully approved loan reschedule request (ID: {})", this.loanRescheduleRequestId);
     }
+
+    @Test
+    public void testCreateLoanInterestGreaterThanEMIFromGapWithRecalculationEnabledAndPrincipalCompoundingOff() {
+        this.enableConfig();
+        this.enablePrincipalCompoundingConfig();
+        // create all required entities
+        this.createRequiredEntitiesWithRecalculationEnabledWithPrincipalCompoundingOff();
+        this.createApproveLoanRescheduleRequestWithRecalculationEnabledWithPrincipalCompoundingOff();
+        this.disablePrincipalCompoundingConfig();
+        this.disableConfig();
+    }
+
+    private void createRequiredEntitiesWithRecalculationEnabledWithPrincipalCompoundingOff() {
+        this.createClientEntity();
+        this.createLoanProductWithInterestRecalculation();
+        this.createLoanEntityWithScheduleGapWithInterestGreaterThanEMIAndPrincipalCompoundingOff();
+    }
+
+    /**
+     * enables the configuration `is-principal-compounding-disabled-for-overdue-loans`
+     **/
+    private void enablePrincipalCompoundingConfig() {
+        GlobalConfigurationHelper.updateEnabledFlagForGlobalConfiguration(this.requestSpec, this.responseSpec, "43", true);
+    }
+
+    /**
+     * disables the configuration `is-principal-compounding-disabled-for-overdue-loans`
+     **/
+    private void disablePrincipalCompoundingConfig() {
+        GlobalConfigurationHelper.updateEnabledFlagForGlobalConfiguration(this.requestSpec, this.responseSpec, "43", false);
+    }
+
+    /**
+     * submit a new loan application, approve and disburse the loan
+     **/
+    private void createLoanEntityWithScheduleGapWithInterestGreaterThanEMIAndPrincipalCompoundingOff() {
+        String firstRepaymentDate = "01 January 2015";
+
+        LOG.info("---------------------------------NEW LOAN APPLICATION------------------------------------------");
+
+        final String loanApplicationJSON = new LoanApplicationTestBuilder().withPrincipal("15000").withLoanTermFrequency("24")
+                .withLoanTermFrequencyAsMonths().withNumberOfRepayments("24").withRepaymentEveryAfter("1")
+                .withRepaymentFrequencyTypeAsMonths().withAmortizationTypeAsEqualInstallments().withInterestCalculationPeriodTypeAsDays()
+                .withInterestRatePerPeriod("25").withInterestTypeAsDecliningBalance().withSubmittedOnDate(this.dateString)
+                .withExpectedDisbursementDate(this.dateString).withFirstRepaymentDate(firstRepaymentDate)
+                .withinterestChargedFromDate(this.dateString).build(this.clientId.toString(), this.loanProductId.toString(), null);
+
+        this.loanId = this.loanTransactionHelper.getLoanId(loanApplicationJSON);
+
+        LOG.info("Sucessfully created loan (ID: {} )", this.loanId);
+
+        this.approveLoanApplication();
+        this.disburseLoan();
+    }
+
+    /**
+     * create new loan reschedule request with recalculation enabled in Loan product
+     **/
+
+    private void createApproveLoanRescheduleRequestWithRecalculationEnabledWithPrincipalCompoundingOff() {
+        LOG.info(
+                "---------------------------------CREATING LOAN RESCHEDULE REQUEST FOR LOAN WITH RECALCULATION------------------------------------");
+
+        final String requestJSON = new LoanRescheduleRequestTestBuilder().updateGraceOnPrincipal(null).updateGraceOnInterest(null)
+                .updateExtraTerms(null).updateRescheduleFromDate("01 March 2015").updateAdjustedDueDate("01 July 2015")
+                .updateRecalculateInterest(true).build(this.loanId.toString());
+
+        this.loanRescheduleRequestId = this.loanRescheduleRequestHelper.createLoanRescheduleRequest(requestJSON);
+        this.loanRescheduleRequestHelper.verifyCreationOfLoanRescheduleRequest(this.loanRescheduleRequestId);
+
+        LOG.info("Successfully created loan reschedule request (ID: {} )", this.loanRescheduleRequestId);
+
+        final String aproveRequestJSON = new LoanRescheduleRequestTestBuilder().getApproveLoanRescheduleRequestJSON();
+        this.loanRescheduleRequestHelper.approveLoanRescheduleRequest(this.loanRescheduleRequestId, aproveRequestJSON);
+        final HashMap response = (HashMap) this.loanRescheduleRequestHelper.getLoanRescheduleRequest(loanRescheduleRequestId, "statusEnum");
+        assertTrue((Boolean) response.get("approved"));
+
+        LOG.info("Successfully approved loan reschedule request (ID: {})", this.loanRescheduleRequestId);
+
+        final Map repaymentSchedule = (Map) this.loanTransactionHelper.getLoanDetail(requestSpec, generalResponseSpec, loanId,
+                "repaymentSchedule");
+        final ArrayList periods = (ArrayList) repaymentSchedule.get("periods");
+
+        HashMap period = (HashMap) periods.get(5);
+        Float totalDueForPeriod = (Float) period.get("totalDueForPeriod");
+
+        final HashMap loanSummary = this.loanTransactionHelper.getLoanSummary(requestSpec, generalResponseSpec, loanId);
+        final Float totalExpectedRepayment = (Float) loanSummary.get("totalExpectedRepayment");
+
+        assertEquals(798, totalDueForPeriod.intValue(), "EXPECTED REPAYMENT is NOK");
+        assertEquals(22567, totalExpectedRepayment.intValue(), "TOTAL EXPECTED REPAYMENT is NOK");
+
+        LOG.info("Successfully approved loan reschedule request (ID: {})", this.loanRescheduleRequestId);
+
+    }
+
 }

integration-tests/src/test/java/org/apache/fineract/integrationtests/common/GlobalConfigurationHelper.java

@@ -90,8 +90,8 @@ public class GlobalConfigurationHelper {
         ArrayList<HashMap> actualGlobalConfigurations = getAllGlobalConfigurations(requestSpec, responseSpec);
 
         // There are currently 37 global configurations.
-        Assertions.assertEquals(37, expectedGlobalConfigurations.size());
+        Assertions.assertEquals(38, expectedGlobalConfigurations.size());
-        Assertions.assertEquals(37, actualGlobalConfigurations.size());
+        Assertions.assertEquals(38, actualGlobalConfigurations.size());
 
         for (int i = 0; i < expectedGlobalConfigurations.size(); i++) {
 
@@ -355,14 +355,6 @@ public class GlobalConfigurationHelper {
         isFirstPaydayAllowedOnHoliday.put("trapDoor", false);
         defaults.add(isFirstPaydayAllowedOnHoliday);
 
-        HashMap<String, Object> isInterestAppropriationEnabled = new HashMap<>();
-        isInterestAppropriationEnabled.put("id", 34);
-        isInterestAppropriationEnabled.put("name", "is-interest-to-be-appropriated-equally-when-greater-than-emi");
-        isInterestAppropriationEnabled.put("value", 0);
-        isInterestAppropriationEnabled.put("enabled", false);
-        isInterestAppropriationEnabled.put("trapDoor", false);
-        defaults.add(isInterestAppropriationEnabled);
-
         HashMap<String, Object> isAccountMappedForPayment = new HashMap<>();
         isAccountMappedForPayment.put("id", 35);
         isAccountMappedForPayment.put("name", "account-mapping-for-payment-type");
@@ -423,6 +415,22 @@ public class GlobalConfigurationHelper {
         isAccountNumberRandomGenerated.put("trapDoor", false);
         defaults.add(isAccountNumberRandomGenerated);
 
+        HashMap<String, Object> isInterestAppropriationEnabled = new HashMap<>();
+        isInterestAppropriationEnabled.put("id", 42);
+        isInterestAppropriationEnabled.put("name", "is-interest-to-be-recovered-first-when-greater-than-emi");
+        isInterestAppropriationEnabled.put("value", 0);
+        isInterestAppropriationEnabled.put("enabled", false);
+        isInterestAppropriationEnabled.put("trapDoor", false);
+        defaults.add(isInterestAppropriationEnabled);
+
+        HashMap<String, Object> isPrincipalCompoundingDisabled = new HashMap<>();
+        isPrincipalCompoundingDisabled.put("id", 43);
+        isPrincipalCompoundingDisabled.put("name", "is-principal-compounding-disabled-for-overdue-loans");
+        isPrincipalCompoundingDisabled.put("value", 0);
+        isPrincipalCompoundingDisabled.put("enabled", false);
+        isPrincipalCompoundingDisabled.put("trapDoor", false);
+        defaults.add(isPrincipalCompoundingDisabled);
+
         return defaults;
     }
 

integration-tests/src/test/java/org/apache/fineract/integrationtests/common/loans/LoanApplicationTestBuilder.java

@@ -77,6 +77,7 @@ public class LoanApplicationTestBuilder {
     private List<HashMap<String, Object>> datatables = null;
     private List<Map<String, Object>> approvalFormData = null;
     private String fixedPrincipalPercentagePerInstallment;
+    private String interestChargedFromDate;
 
     public String build(final String clientID, final String groupID, final String loanProductId, final String savingsID) {
         final HashMap<String, Object> map = new HashMap<>();
@@ -150,6 +151,7 @@ public class LoanApplicationTestBuilder {
         map.put("submittedOnDate", this.submittedOnDate);
         map.put("loanType", this.loanType);
         map.put("collateral", this.collaterals);
+        map.put("interestChargedFromDate", this.interestChargedFromDate);
 
         if (repaymentsStartingFromDate != null) {
             map.put("repaymentsStartingFromDate", this.repaymentsStartingFromDate);
@@ -382,4 +384,9 @@ public class LoanApplicationTestBuilder {
         this.fixedPrincipalPercentagePerInstallment = fixedPrincipalPercentagePerInstallment;
         return this;
     }
+
+    public LoanApplicationTestBuilder withinterestChargedFromDate(String interestChargedFromDate) {
+        this.interestChargedFromDate = interestChargedFromDate;
+        return this;
+    }
 }