Valluvanad Money · LMMS — Loan Mapping and Management System

Add-On Loan Close & Regroup Transaction
Worked Example for Client Review

Complete transaction flow with sample values and step-by-step calculations

DocumentWorked Example — Regroup Transaction
VersionDraft 0.4 — for review
Date09/07/2026
Companion toRequirement note "Add-On Loan close and regroup GL"
Purpose of this document. It illustrates, with sample figures, how the proposed Regroup Transaction will calculate eligibility, settlement, and net cash flow. All figures are illustrative. Please review each step and the points for confirmation (Section 8), then sign off in Section 9. Development begins only after this document is approved.

1What the Regroup Transaction Does

Today, when a customer with an existing Gold Loan (GL) lot and an Add-On Loan pledges new gold, the only option is to open a separate new lot with a separate new Add-On Loan. It is not possible to close or combine the existing arrangement into the new one.

The proposed Regroup Transaction is a single transaction, under a single approval, with two legs:

Closing Leg

  • The existing Add-On Loan is always fully closed (settled in full, principal + interest).
  • Closing the linked GLs is optional — the user may close one, several, all, or none.
  • Each GL being closed may carry an optional Token Loss Charge, added to that GL's settlement — same rule as GL Replacement.

New Lot Leg

  • One or more new GLs are pledged and created.
  • Each new GL may carry an optional Documentation Charge, deducted from its disbursement — same rule as GL Replacement.
  • A fresh Add-On Loan is created, linked to the new GL(s) plus any GLs kept open from the closing leg.
One combined Net Cash Flow is shown to the branch: New Lot Amount − Total Closing Leg Amount (positive = payable to customer; negative = customer brings in the shortfall).

How Add-On eligibility is calculated (Gross basis — per Change Request CR-002)

The Gold Rate master holds the full gold value per gram. The system computes the gross gold value from the pledged weight and deducts the outstanding Gold Loan principal (keyed in by the branch; for a brand-new GL this equals its disbursement amount). The balance is the Add-On eligibility:

Gross Gold Value = Pledged Weight (g) × Active Gold Rate per gram Standard Eligibility = Gross Gold Value − Outstanding GL Principal Maximum Permissible Amount = CEILING(Eligible ÷ Rounding Unit) × Rounding Unit (Eligible ≤ 0 → request blocked)

For the Regroup Transaction, the eligibility of the new Add-On Loan is:

Eligible Amount = Standard Eligibility of NEW GL(s) + Current Add-On Outstanding (principal) − Proportionate Principal of the GLs being CLOSED

In words: the new gold contributes fresh headroom, and the slice of the existing Add-On Loan that was riding on the retained GLs is carried into the new Add-On Loan. Retained GLs are not re-appraised for fresh headroom — they carry over only their share of the existing outstanding.

Charges (same calculation logic as GL Replacement — CR-001): Token Loss Charge is optional per closed GL (default ₹0) and is added to that GL's settlement. Documentation Charge is optional per new GL (default ₹0, must be less than the loan amount) and is deducted from its disbursement. Charges affect the cash flow only — they never change eligibility, the deduction of GL outstanding, or allocation ratios. Rows with ₹0 are still displayed. Retained GLs carry no charges (no token surrendered, no fresh documentation).

2Sample Data Used Throughout

Master data
ParameterValue
Active gold rate per gram (Gross basis — full gold value)₹5,500 / g
Rounding Unit₹5,000
Configured Cut-off Date (applies to the Add-On Loan only)01/01/2026

Customer C-005 — existing position (Lot 1): two GLs mapped to Add-On Loan 1.

Lot 1 at time of original approval (01/03/2026)
GLWeightDisbursementLoan DateAllocation Ratio (weight-based)
GL-A60 g₹2,40,00015/02/202660 ÷ 100 = 60%
GL-B40 g₹1,60,00020/02/202640 ÷ 100 = 40%
Total100 g₹4,00,000—100%

At approval (gold rate then ₹4,550/g), eligibility was 100 g × ₹4,550 − ₹4,00,000 GL outstanding = ₹4,55,000 − ₹4,00,000 = ₹55,000. Add-On Loan 1 was approved for ₹55,000 and disbursed on 01/03/2026. The customer has since repaid ₹5,000 of principal.

Position today (09/07/2026) — figures keyed in by branch user
ItemPrincipalInterestTotal
GL-A outstanding₹2,00,000₹14,000₹2,14,000
GL-B outstanding₹1,30,000₹9,000₹1,39,000
Add-On Loan 1 outstanding₹50,000₹3,500₹53,500

New pledge: the customer brings gold for a new GL-D — 50 g, disbursement ₹2,42,500, dated 09/07/2026. For a brand-new GL, the outstanding principal equals its disbursement amount.

3Scenario A — Main Case: Close GL-A, Retain GL-B, New GL-D

The customer closes GL-A, keeps GL-B open, pledges GL-D, closes Add-On Loan 1, and requests a fresh Add-On Loan 2 linked to GL-D + GL-B. To keep the illustration simple, every scenario requests exactly the Eligible Amount. Charges in this example: the customer has misplaced GL-A's pledge token — Token Loss Charge ₹500; new GL-D carries a Documentation Charge of ₹1,500.

Step 1 — Cut-off date check (Add-On Loan only)

The cut-off applies only to the existing Add-On Loan — GL loan dates are not checked. Add-On Loan 1 was disbursed on 01/03/2026, which is after the cut-off of 01/01/2026, so the lot is selectable. A lot whose Add-On Loan was disbursed on or before 01/01/2026 would be Blocked from this transaction window.

Step 2 — Closing Leg

ItemPrincipalInterestTotal
GL-A outstanding (being closed)₹2,00,000₹14,000₹2,14,000
GL-A Token Loss Charge——₹500
GL-A Settlement (P + I + Token Loss)₹2,14,500
Add-On Loan 1 — full settlement (always fully closed)₹50,000₹3,500₹53,500
Total Closing Leg Amount₹2,68,000

The eligibility deduction term — Proportionate Principal of the GLs being closed — uses the allocation ratio frozen at Lot 1 approval:

Closed-GL Principal Portion = ₹50,000 × 60% (GL-A ratio) = ₹30,000 Carried portion (rides on retained GL-B) = ₹50,000 − ₹30,000 = ₹20,000

Step 3 — Eligibility for the new Add-On Loan 2

StepCalculationAmount
Gross gold value of new GL-D50 g × ₹5,500₹2,75,000
− Outstanding GL-D principal (= full loan amount, before Documentation Charge)−₹2,42,500
Standard eligibility of new GL-D2,75,000 − 2,42,500₹32,500
+ Current Add-On outstanding (principal)₹50,000
− Proportionate principal of closed GLs₹50,000 × 60%−₹30,000
Eligible Amount32,500 + 50,000 − 30,000₹52,500
Maximum PermissibleCEILING(52,500 ÷ 5,000) × 5,000₹55,000

Requested Add-On Loan 2 = Eligible Amount = ₹52,500 → within Maximum Permissible ₹55,000 → Valid ✓

Reading of the figure: ₹32,500 is genuinely new headroom from GL-D (gross value above its own loan); ₹20,000 is the existing exposure carried over on retained GL-B and refinanced inside the new Add-On Loan. Note the charges play no part here — Token Loss and Documentation Charges affect only the cash flow (Step 4).

Step 4 — Net Cash Flow

ItemAmount
New GL-D loan amount₹2,42,500
Less: Documentation Charge (GL-D)−₹1,500
New GL-D disbursement₹2,41,000
New Add-On Loan 2₹52,500
New Lot Amount₹2,93,500
Less: Total Closing Leg Amount (Step 2)−₹2,68,000
Net Cash payable to Customer₹25,500

Step 5 — Revised % and position after approval

The new Add-On Loan 2 is linked to GL-D (50 g) and retained GL-B (40 g) — 90 g in total. New allocation ratios, frozen at approval:

GL in new Lot 2WeightRevised Ratio
GL-D (new)50 g50 ÷ 90 = 55.56%
GL-B (retained from Lot 1)40 g40 ÷ 90 = 44.44%
Total90 g100%
ItemStatus after approvalNote
GL-AClosedSettled in the closing leg
Add-On Loan 1Fully ClosedAlways fully closed in this transaction — even though GL-B stays open
GL-BOpen — re-mappedMoves from Lot 1 to new Lot 2; the loan itself is untouched
GL-DNew50 g, ₹2,42,500
Add-On Loan 2Active₹52,500; ratios GL-D 55.56% / GL-B 44.44%

4Scenario B — All Existing GLs Closed

Same position, but the customer closes both GL-A and GL-B along with Add-On Loan 1, and requests Add-On Loan 2 against GL-D alone — again for exactly the Eligible Amount of ₹32,500. Charges: Token Loss ₹500 on GL-A; GL-B's token is produced, so its charge is ₹0 (row still shown); Documentation Charge ₹1,500 on GL-D.

Closing Leg
ItemAmount
GL-A settlement (₹2,14,000 P+I + ₹500 Token Loss)₹2,14,500
GL-B settlement (₹1,39,000 P+I + ₹0 Token Loss)₹1,39,000
Add-On Loan 1 — full settlement₹53,500
Total Closing Leg Amount₹4,07,000
Eligibility — deduction now covers 100% of the outstanding
StepCalculationAmount
Standard eligibility of new GL-D50 g × ₹5,500 − ₹2,42,500₹32,500
+ Current Add-On outstanding (principal)₹50,000
− Proportionate principal of closed GLs₹50,000 × (60% + 40%)−₹50,000
Eligible Amount₹32,500
Maximum PermissibleCEILING(32,500 ÷ 5,000) × 5,000₹35,000

Consistency check: when every existing GL is closed, the carried portion cancels out and eligibility reduces to the new GL alone — exactly the existing Combined Transaction behaviour.

Net Cash Flow
ItemAmount
New Lot Amount (GL-D disbursement ₹2,41,000 + Add-On ₹32,500)₹2,73,500
Less: Total Closing Leg Amount−₹4,07,000
Net Shortfall — payable BY customer−₹1,33,500

The net figure is negative, so the customer must bring in ₹1,33,500 for the transaction to proceed. The branch confirms this with the customer before submitting for approval.

After approval: GL-A, GL-B, Add-On 1 all Closed; new Lot 2 = GL-D New with Add-On Loan 2 ₹32,500, ratio 100%.

5Scenario C — No GLs Closed (Pure Add-On Refinance)

The customer keeps both GL-A and GL-B open, pledges GL-D, and only replaces the Add-On Loan: Add-On 1 is closed and a larger Add-On Loan 2 is taken against all three GLs — for the Eligible Amount of ₹82,500. No GLs are closed, so no Token Loss Charge arises; the Documentation Charge of ₹1,500 on GL-D still applies.

Closing Leg — Add-On settlement only
ItemTotal (P + I)
Add-On Loan 1 — full settlement₹53,500
Total Closing Leg Amount₹53,500
Eligibility — nothing deducted, full outstanding carried
StepCalculationAmount
Standard eligibility of new GL-D50 g × ₹5,500 − ₹2,42,500₹32,500
+ Current Add-On outstanding (principal)₹50,000
− Proportionate principal of closed GLsno GLs closed₹0
Eligible Amount₹82,500
Maximum PermissibleCEILING(82,500 ÷ 5,000) × 5,000₹85,000

Requested = Eligible Amount = ₹82,500 ≤ Maximum Permissible ₹85,000 → Valid ✓

Net Cash Flow
ItemAmount
New Lot Amount (GL-D disbursement ₹2,41,000 + Add-On ₹82,500)₹3,23,500
Less: Total Closing Leg Amount−₹53,500
Net Cash payable to Customer₹2,70,000
Revised % — new Lot 2 spans all three GLs (150 g)
GL in new Lot 2WeightRevised Ratio
GL-D (new)50 g33.33%
GL-A (retained)60 g40.00%
GL-B (retained)40 g26.67%
Total150 g100%

6Transaction Flow Summary

#StepPerformed by
1Select customer and existing lot — cut-off date filter applied to the lot's Add-On Loan (GL dates are not checked)Branch user
2Tick GLs to close vs retain; key in outstanding P + I and optional Token Loss Charge per closed GL, plus the Add-On Loan outstanding (settled in full)Branch user
3Enter new GL(s): weight, loan amount, optional Documentation Charge (disbursement computed), loan dateBranch user
4System computes eligibility (Section 1 formula), Maximum Permissible, and validates the requested new Add-On amountSystem
5System shows combined Net Cash Flow; branch confirms with customer (especially if a shortfall)System / Branch
6Submit — one transaction covering both legs goes for a single approvalBranch user
7On approval: closing leg processed, old Add-On fully closed, retained GLs re-mapped, new lot created with revised ratios frozenApprover / System

7Formula Summary

-- Standard eligibility (Gross basis — per CR-002) -- Gross Gold Value = Pledged Weight × Active Gold Rate per gram Standard Eligibility = Gross Gold Value − Outstanding GL Principal (keyed in; for a new GL = its disbursement amount) Maximum Permissible = CEILING(Eligible ÷ Rounding Unit) × Rounding Unit (Eligible ≤ 0 → request blocked) -- Regroup: Closing Leg -- Closed GL Settlement = Outstanding P + I + Token Loss Charge (optional, ≥ 0) Closing Leg Amount = Σ(Closed GL Settlements) + Add-On Outstanding P+I (settled in FULL) Closed Principal Portion = Add-On Outstanding Principal × Σ(Ratios of closed GLs) -- Regroup: New Add-On Eligibility -- Eligible Amount = (New GL Weight × Rate − New GL Outstanding Principal) + Add-On Outstanding Principal − Closed Principal Portion -- Net Cash Flow -- New GL Disbursement = Loan Amount − Documentation Charge (optional, ≥ 0, < Loan Amount) New Lot Amount = Σ(New GL Disbursements) + New Add-On Amount Net Cash Flow = New Lot Amount − Closing Leg Amount (negative = customer pays the shortfall) Charges affect cash flow ONLY — never eligibility or ratios -- Revised % (frozen at approval of the new lot) -- Ratio (each GL in new lot) = GL Weight ÷ Total Weight of new lot (new GLs + retained GLs) -- Cut-off eligibility for selection -- Lot selectable = Add-On Loan Disbursement Date > Configured Cut-off Date (GL loan dates are NOT checked)

8Points for Confirmation

Please confirm the following interpretations. The calculations above assume the answer shown in bold.

  1. Eligibility basis (as clarified): the gold rate is the full gold value per gram (Gross basis); eligibility = gross gold value − outstanding GL principal, keyed in by the branch per GL. If the eligible amount is zero or negative, the request is blocked.
  2. "Current Outstanding" in the eligibility formula (as clarified): principal only. Interest on the old Add-On Loan is always collected in cash through the closing leg and is never refinanced into the new Add-On Loan.
  3. Retained GLs: they contribute only their carried share of the existing outstanding — they are not re-appraised for fresh headroom at the current rate, even if the rate has risen since their lot was approved.
  4. Existing Add-On Loan: always fully closed in this transaction — there is no partial replacement variant.
  5. Scenario C (no GLs closed): confirm this variant is permitted — i.e. the transaction may close only the Add-On Loan while retaining every GL.
  6. Cut-off date scope (as clarified): the configured cut-off applies only to the existing Add-On Loan's disbursement date; a lot whose Add-On Loan was disbursed on or before the cut-off cannot be selected. GL loan dates are not checked.
  7. Allocation ratio basis: gold weight (GL weight ÷ total lot weight), consistent with the current system. Retained GLs use their originally recorded weight.
  8. Net Cash Flow: the New Lot Amount includes the new Add-On Loan amount in addition to the new GL disbursement(s), matching the current Combined Transaction behaviour.
  9. Approval: one single approval covers both legs; a return or rejection cancels the entire transaction (neither leg is processed).
  10. Charges (as clarified): Token Loss Charge per closed GL and Documentation Charge per new GL, with the same rules as GL Replacement (CR-001): optional, default ₹0, ₹0 rows still displayed, Documentation Charge must be less than the loan amount, both visible to the approver. Charges never affect eligibility or allocation ratios. Retained GLs carry no charges. Please confirm one point: the new Add-On Loan itself carries no Documentation Charge (charges apply to GLs only, as in GL Replacement) — our assumption is no.

9Approval & Sign-off

Approval of this document confirms the calculation method, the transaction flow, and the answers to Section 8, and authorises the start of development.

Prepared bySyut Technologies
Date: 09/07/2026
Reviewed by (Client)Name / Designation
Date: ____________
Approved by (Client)Name / Signature
Date: ____________
LMMS — Loan Mapping and Management System · Valluvanad Money · Worked Example, Draft 0.4 (09/07/2026).
Companion documents: URD v0.6 · Calculation Examples v0.6 · CR-001 (GL Replacement Charges — Token Loss & Documentation, whose calculation rules are reused here) · CR-002 (Eligibility Rate Basis — Gross). Eligibility here uses the Gross basis introduced by CR-002; transactions processed before the CR-002 cut-over were calculated on the earlier Net basis and remain unchanged.