Loan repayment scam or I have less knowledge?

Today morning I was sitting in a bank to see the status of the loan which is progressing for last 6 months. I heard a conversation between Bank Staff and a customer.

Customer: Madam I am paying additional payment of 27000 every month but I did not see my principle amount is reduced.

Bank staff: Sir your EMI is 23000 rit?

Customer: yes madam.

Bank staff: wait a minute I will check

(Type writting sound comes as tok tok tok tttotok totok total)

Bank Staff: Sir what ever excess payment you are paying will hot the interest amount only if you did not ask us to adjust principle amount. Sofor the last 5 months all ur additional payment went to interest amount.

Customer: oh ok then fine I am happy. Thankyou for assisting.

Here my split personality Mr Doubt Dhanabal came out. How the excess payment will go to interest amount where there is no outstanding intrest amount is there. My understanding is only the outstanding principle amount will be there? 

With this where did that amount of 27000 * 5 months went? Is this the new trick from banks or a scam or I don't have banking knowledge?