Note
17 January 2026 · Priya Nair
How interest parameter drift shows up in a sample
A product sheet says one rate. The origination application applies another. The difference is often small, until the book is large.
Parameter drift is a dull phrase for a sharp problem. The product committee approves a rate, a fee, a lock-in, or a rebate method. Months later the origination application still prints letters, but the table it reads is not the table in the circular. Customers sign the letter. The book inherits the difference.
In recalculation samples we do not start with the screen. We start with the written product sheet and the circular that authorised it. Then we rebuild the instalment, the fee, and any origination illustration by hand or in a controlled worksheet. Only then do we compare the origination application’s output. The finding is the difference, with the file reference attached.
Islamic facilities need their own worksheets. A rebate illustration generated at origination is part of the customer record even if the facility later behaves as expected in the core. If the origination application uses a conventional reducing-balance picture for a product that is not supposed to be explained that way, we write that down. We do not argue theology; we compare the printout with the product sheet.
Staff loans, staff-related rates, and promotional windows are where drift hides. A promotional end date that was never closed in the origination application will keep producing letters after the campaign has been withdrawn. That is a financial-control issue and, depending on the letter, a customer-treatment issue. Both belong in the findings paper.
We quantify the sample. We do not invent a portfolio-wide loss figure unless the engagement letter asks for a separately scoped extrapolation and the data can support it. A honest small sample is more useful to an audit committee than a large number with no file behind it.
If you already suspect drift, send the product sheets and a month of origination letters before we argue about fees. A short scoping conversation in Shah Alam is usually enough to see whether a full recalculation engagement is warranted or whether a single product family should be tested first.