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AI & Digital Lending
…erely experimenting with chatbots and digital journeys? Or has AI begun entering the real operating layers of banking — credit, fraud, underwriting, monitoring, collections, compliance and employee productivity? This blog is an attempt to answer that question. Not through opi…Read in full
AI & Digital Lending
…y stressed account has a past. And in most cases, that past was not silent. The account spoke. It spoke through reduced credits. It spoke through sticky utilisation. It spoke through delayed stock statements. It spoke through cheque returns. It spoke through repeated ad hoc r…Read in full
AI & Digital Lending
…sses that were never properly redesigned. If a process has repeated data entry, AI can make the repetition faster. If a Credit Assessment Memo has weak structure, AI can make the weak structure look polished. If dashboards only show what happened, AI can make the mirror more…Read in full
AI & Digital Lending
Episode 2: The AI Lending Flywheel From Isolated Use Cases to Intelligent Credit Flow In Episode 1, we looked at the hidden waste in lending. Paper is visible. But the deeper waste lies elsewhere — waiting, repeated data entry, du…Read in full
AI & Digital Lending
…ocus on exceptions and risk judgement. Paperless lending removes the file; intelligent lending removes the friction. In credit origination, digitisation and analytics reduce the time relationship managers and credit officers spend on repetitive preparation and routine process…Read in full
Fraud, Ethics & Governance
…e title lawyers. The lesson is to understand that title risk has layers. A legal opinion may clear mortgageability. But credit should still be alert to transaction history. Who was the original owner? How did title devolve? Was there inheritance? Was there partition? Were all…Read in full
Fraud, Ethics & Governance
…was directed to proceed before the DRT with status quo in the meantime. This case also ultimately protected the secured creditor. But for bankers, the operational message remains powerful: Even after a lender takes physical possession, a tenant claim can pull the matter back…Read in full
Fraud, Ethics & Governance
…ate a contractual right, but the real test is whether that right can be converted into an enforceable legal remedy. I n credit, security and recovery, that difference can decide whether a document is merely comforting — or genuinely protective. What the Specific Relief Act Sa…Read in full
AI & Digital Lending
…rday’s controls. This is not merely a technology issue. It is also a governance issue. Boards, investigators, auditors, credit teams, operations teams, legal teams, and policymakers may all need to revisit the language with which fraud is understood. If we continue to rely on…Read in full
Credit & Underwriting
…g data. Financial statements arrive digitally. GST data flows through APIs. Bank statements are analysed automatically. Credit bureau scores are available instantly. In many institutions today, a loan proposal can move through multiple system checks within minutes. Yet, despi…Read in full
Fraud, Ethics & Governance
…nking system, the Reserve Bank of India introduced the CRILC framework — the Central Repository of Information on Large Credits. The objective was simple but powerful. Create a system where banks report early signs of borrower stress so that emerging risks are visible across…Read in full
AI & Digital Lending
The Missing Layer in MSME Lending Walk into most credit departments and observe how a loan application progresses. A surprising amount of time is spent not on analysing the borrower’s business, but on coll…Read in full
AI & Digital Lending
…orged. Collateral was inflated. Stock statements were manipulated. Funds were quietly diverted. Fraud investigators and credit officers learned to look for these signals. Systems evolved to detect them. But something fundamental is changing. As lending decisions increasingly…Read in full
AI & Digital Lending
…ell. The regional team supports the proposal. Yet the file begins its journey. Branch → Regional Office → Head Office → Credit Department → Committee. Clarifications are raised. Additional data is sought.Internal discussions continue. By the time approval finally arrives, the…Read in full
Fraud, Ethics & Governance
…deserve earlier escalation. For Recovery & Legal Teams Speed and sequencing discipline are strategic tools. Section 95 creditor filings must be evaluated proactively, not reactively. For Credit & Risk Functions Guarantor exposure monitoring must extend beyond annual declarat…Read in full
Fraud, Ethics & Governance
…jects. Ring Risk Matrix Ring Construction Element What Happens at the Jewellery Bench Testing Bias Introduced Resulting Credit / Lending Impact Cast shank (mass-produced rings) Alloy mixed upfront; density varies by casting quality XRF averages alloy + micro-porosity Slightly…Read in full
Fraud, Ethics & Governance
…Deferred distress Latent default risk Re-pledging after redemption Cyclical usage Structural dependency Semi-permanent credit reliance SUMMARY : Bangles do not arrive at the counter all at once. They arrive one at a time — quietly, cautiously, almost apologetically. To the b…Read in full
Fraud, Ethics & Governance
From Temporary Liquidity to Silent Continuity ORNAMENT Sub Series : GOLD JEWELLERY FUNDING : Episode 17 Sunita didn’t pledge her necklace again. She chose bangles. One bangle at first. Then another. Each time it felt small. Each time she told herself she’d cat…Read in full
Credit & Underwriting
ORNAMENT Sub Series : Gold Jewellery Business : EPISODE 16 When Meera walked up to the gold-loan counter with her wedding necklace in hand, she wasn’t thinking about LTV or purity. She was thinking: ‘Can I get enough to cover one month’s bills without losing t…Read in full
Fraud, Ethics & Governance
…des, pawn brokers occupied a quiet but critical space in India’s gold ecosystem — bridging household distress, informal credit demand, and last-mile liquidity. Banks, in turn, saw them as efficient conduits: asset-backed, cash-generative, and seemingly low risk. Over time, ho…Read in full
Fraud, Ethics & Governance
…d Liquidation is straightforward Recovery experience is historically strong This explains why gold loans rarely fail on credit grounds — but often face legal scrutiny on process , as discussed in earlier episodes. 3. 2 Personal Loans & “Fungibility” A frequent argument is: “I…Read in full
Fraud, Ethics & Governance
…sts Gold Jewellery Business Series - Episode 13 India’s gold ecosystem sits at the intersection of culture, collateral, credit, and compliance . As gold loans surge and jeweller-led schemes multiply, so do questions: Why can a customer buy gold on a credit card but not on EMI…Read in full
Fraud, Ethics & Governance
…gh NPAs, but through courts, tribunals, and audits — indicating that gold loan risk manifests as process disputes , not credit failure. PART C — WHY GOLD LOANS RARELY FAIL LEGALLY ON CREDIT GROUNDS Across cases: Borrowers often service interest Collateral value usually exceed…Read in full
Fraud, Ethics & Governance
…ns. The non-availability of precise bank-wise dispute statistics is itself evidence that this risk bypasses traditional credit monitoring frameworks and manifests only when closure is attempted. PART B — FIVE LEGAL FAULT LINES IN GOLD LOANS 🧩 1. Renewal vs Closure (Evergreen…Read in full
Tractor & Rural Finance
…. Why Read Gold Lending from the Balance Sheet? Gold jewellery lending is often described as one of the safest forms of credit in Indian banking. Collateral is physical, liquid, and emotionally anchored. NPAs remain consistently low across cycles. Auctions are rare. Losses ar…Read in full
AI & Digital Lending
…dscape. Take tractor finance, for example. It’s not just about loans for farming equipment. It’s about rural economies, credit access, and the ripple effects on food security. Vivek’s approach connects these dots with clarity and insight. He doesn’t just tell you what’s happe…Read in full
Tractor & Rural Finance
…n banks, gold jewellery loans typically form just 2–10% of total advances , yet contribute 15–35% of incremental retail credit growth during periods of rising gold prices. Segmental disclosures show gold loan outstanding growing at 1. 5–2. 5× the pace of overall retail credit…Read in full
Fraud, Ethics & Governance
…ay Jewellery lending doesn’t fail because gold disappears. It fails because time is misbuilt into the structure. Normal Credit Appraisal vs Timing-Aware Credit Appraisal (Jewellery Business Lending) Area Normal Credit Appraisal Asks Timing-Aware Credit Appraisal Asks Customer…Read in full
Fraud, Ethics & Governance
JEWELLERY BUSINESS SERIES - EPISODE 6 How Can a Banker Tell This Just by Looking at the Balance Sheet ? You cannot see the fraud directly. But you can see the timing distortion very clearly — if you know where to look . Think in four lenses , not one. Lens 1:…Read in full
Fraud, Ethics & Governance
…sibly. These schemes are marketed aggressively as: Savings Hedging Disciplined accumulation Smart investment But from a credit and risk lens, many of them behave very differently. The Core Question When money flows before gold or without gold , what exactly is being funded? I…Read in full
Credit & Underwriting
…L against it Hidden risk Inventory can be recalled Sale proceeds are first owed to vendor Bank sits behind an invisible creditor 4B. Consignment-Based Distributor How it works Stock placed on display Unsold stock returnable Margin earned only on sale Economic truth Retailer s…Read in full
Tractor & Rural Finance
…Pure Job-Worker Paid per gram or per piece. Minimal working capital need. 3B. Cluster Karigar Unit Family-run. Informal credit cycles. 3C. Skill-Specialised Job-Worker Temple jewellery, stone-heavy designs. 3D. Job-Worker with Advance Gold Temporary custody. High audit sensit…Read in full
Credit & Underwriting
…stomer exists Gold is not bought after a sale — it is bought in anticipation of one. Whether through own funds, bullion credit, metal loans, or supplier arrangements, gold is acquired upfront and sits as inventory. That inventory carries: full gold value, price volatility, an…Read in full
Fraud, Ethics & Governance
…hing extra available to form “equity”. 🔍 3. This gold is not owned by the job-worker Ownership is the key principle in credit. The job-worker does not: pay cash for this gold take price risk have the right to liquidate it independently If a jeweller cannot sell that retained…Read in full
Fraud, Ethics & Governance
Legacy complexity in Indian banking A case for cleaning up our legacy MIS code burden in Indian banking There are moments in policy that go quietly unnoticed — but signal a seismic shift in the way a system thinks. One such moment happened recently. The Reserv…Read in full
AI & Digital Lending
A Risk Philosophy for a Digital Credit World In my early years at Sundaram Finance , my seniors and mentors taught me a line I have never forgotten: “Neththiya Paarthu Panam Kudukaradhu.”…Read in full
Fraud, Ethics & Governance
TAT - The untold stories There was a time when bankers feared NPAs, audits, inspections, and credit committees. Today, they fear something far more colourful: the next morning’s TAT dashboard . One red cell is enough to trigger panic. People raise q…Read in full
Fraud, Ethics & Governance
Globally, the Association of Certified Fraud Examiners (ACFE) will observe its 25ᵗʰ International Fraud Awareness Week from 16 November 2025 to 22 November 2025 , urging organizations and professionals everywhere to “join the movement to minimize the impact of…Read in full
AI & Digital Lending
…governance did. LIMIT TREES The Reality — Too Many LOS, Too Little Linkage Think of the limit tree as a family tree for credit. The root node is the borrower’s total sanctioned limit. Each child node — CC, OD, LC, BG, WCDL — draws from that root. If one branch over-grows, the…Read in full
AI & Digital Lending
Whose baby is it, really? Credit? Operations? Compliance? Pre-disbursement or sanction stage? That question echoes in every credit committee. And it’s the perfect place to start, bec…Read in full
AI & Digital Lending
…d. The immediate fallout? Orders halted, margins vanished, and production shut down in Tiruppur, Noida, and Surat. MSME Credit & Export Relief This isn’t just an export shock. It’s an MSME crisis unfolding in real time, where factories operate on razor-thin margins (~8–15%) a…Read in full
Credit & Underwriting
…aggressively in tapping the EU, ASEAN, Africa, and Latin America to reduce U. S. dependence. Support for MSMEs: Expand credit lines, ease compliance burdens, and provide direct relief in high-risk clusters. Energy Transition: Accelerate the shift toward renewables, green hyd…Read in full
AI & Digital Lending
…een actively explored and piloted in banking and financial services , especially for fraud detection, risk scoring, and credit modelling . a) Fraud Detection Consilient (2025): Building FL-driven fraud detection models for correspondent banking networks to detect mule account…Read in full
AI & Digital Lending
…ces exist but are not fraud registries : CKYCR, PAN/NSDL, Aadhaar offline KYC → identity validation, not fraud history. Credit bureaus (CIBIL/CRIF/Experian/Equifax) → repayment history & scorecards; some have application-level signals, but sharing adverse fraud intel is const…Read in full
AI & Digital Lending
Policy Vs Practice Series In FY 2024–25, MSME lending powered ahead as the fastest‑growing credit segment in India.” MSME loans surged 14. 1% , outstripping retail (11. 7%) and services (11. 2%) Their share of total (non‑food) bank credit hit an a…Read in full
Fraud, Ethics & Governance
Policy Vs Practice Series Policy Intent When the SARFAESI Act was introduced in 2002, it was hailed as a game-changer. For the first time, banks in India could enforce security interests without the long wait of civil courts . The intent was clear: empower len…Read in full
Fraud, Ethics & Governance
Policy Vs Practice The Setting (Rating Methodologies) A branch credit officer is reviewing a ₹50 crore working capital renewal for a reputed engineering firm. The borrower proudly points to their BBB rating from a leadi…Read in full
Fraud, Ethics & Governance
…rom RBI’s capital adequacy norms to provisioning requirements — are designed to safeguard the banking system and ensure credit discipline. Practice Reality: In real-world cycles, these very rules often push banks to lend more in booms and less in downturns — exactly the oppos…Read in full
Fraud, Ethics & Governance
…slow-moving deposit costs can blunt the intended effect — at least in the short term. Liquidity alone doesn’t guarantee credit flow; confidence, demand, and risk appetite matter just as much. ♻️ Why the Cycle Repeats We’ve seen this movie before. In 2020, in 2015, even in 200…Read in full
Tractor & Rural Finance
…BFCs: Re-engineer disbursement processes to fit the 15-day cap or redesign products for Mode 1. For Banks: Build faster credit ops for milestone/staggered products or risk losing co-lending share. For Regulators: Consider sector-specific relaxations where staged disbursements…Read in full
Credit & Underwriting
…s. But behind glossy numbers, cash flows may be telling a very different story. Fund Flow Analysis — an often-neglected credit appraisal tool — can unmask whether operations are genuinely generating liquidity or simply inflating assets. In this episode, we’ll revisit real-wor…Read in full
AI & Digital Lending
…today’s risk committees and appraisal notes, a dangerous trend is setting in — ratios rule, narratives are ignored . 🧾 Credit officers are asked: “Is the Current Ratio above 1.33?”“Has the DSCR touched 1.5?” But here's the uncomfortable truth : These numbers are surface sign…Read in full
AI & Digital Lending
…gator - Microfinance Microfinance Institutions (MFIs) have long been the torchbearers of financial inclusion, extending credit to India’s most underserved populations. But in a world that's fast digitizing, MFIs face a fresh challenge: how to leverage the Account Aggregator (…Read in full
AI & Digital Lending
…rers. Most of his payments come via NEFT or UPI from three mid-sized clients. His account reflects ₹2.2 lakh in monthly credits — all verifiable, digital, and consistent. Account Aggregator Yet when he applied for a working capital facility, the branch manager flipped through…Read in full
AI & Digital Lending
…erences. His inflows come through UPI, small cash deposits, and advance payments via PhonePe. But when asked for a CMA (Credit Monitoring Arrangement) statement by a bank, he looked bewildered. Cash Budgeting What Ramesh had — and what the bank didn’t ask for — was a simple m…Read in full
AI & Digital Lending
…ism. No Form 16. No GST registration. No traditional balance sheet. Just her bank passbook filled with GPay and PhonePe credits. "Frustrated, Priya held up her GPay dashboard to the relationship manager as proof of income. But it wasn’t enough." So what’s stopping banks from…Read in full
AI & Digital Lending
…d his GPay dashboard: ₹7.8 lakh worth of receipts over 6 months, from 300+ unique customers, all paying through QR. The credit officer paused. He’d never been taught how to read a digital trail as a proxy for creditworthiness . The Central Question on UPI Inflows: Can digital…Read in full
AI & Digital Lending
Section 1: The Illusion of Structure For decades, India’s MSMEs have been navigating a labyrinth of credit norms designed to bring structure, logic, and discipline to working capital financing. From the moment a small business approaches a bank, its viabil…Read in full
Fraud, Ethics & Governance
Over the past five years, working capital loans — dominated by Cash Credit (CC) and Overdraft (OD) facilities — have accounted for a substantial share of bank credit in India. Designed to bridge short-term liquidity gaps, th…Read in full
Fraud, Ethics & Governance
…ked it between meetings. It asked for name, PAN, and Aadhaar number. He entered it all. Within 48 hours, two fraudulent credit card accounts were opened in his name. One had already been maxed out. ❝ He didn’t believe the sender. He believed the clock. ❞ 🧠 THE BIAS AT PLAY:…Read in full
AI & Digital Lending
…ro-mining” or plantation-themed investments to dupe rural communities. 🏦 4. Cooperative Society/Chit-Fund Ponzi Adarsh Credit Co-op Society , with branches in Tamil Nadu, Rajasthan, and beyond, drew in ₹8,000 crore from depositors through unrealistic interest offers before c…Read in full
AI & Digital Lending
…no longer a fringe experiment. It’s mainstream, scaling faster than regulators can blink. But in this rush to digitize credit, we’ve forgotten to ask:Who trained the algorithm? Who monitors it? And most critically — who takes the blame when it’s wrong? The Statistical Realit…Read in full
AI & Digital Lending
…facing the problems and thereafter starts his saga….. The largest contributor to Stage 4 and Stage 3 , have been Dealer Credits to Customers. Dealers issue a Margin Money Receipt for the purpose of documentation / loan. Yet he gives a credit to the customer for repayment. Clu…Read in full
Tractor & Rural Finance
Originally Written on Jun 21, 2018 "Vivek ! we are in the business of secured funding" announced a classmate of mine who worked for a NBFC. A few of us met for tea, and it was normal to start off a thought trail as many interesting facets of our work come fort…Read in full
Tractor & Rural Finance
…there is carving out “exclusivity” image which signifies customer friendliness. The “Experience” of buying or availing credit has been key. While some like the State Bank of Travancore ( Currently SBI ) believed in the “personal touch”, HDFC believed in “Speed” and “Reliable…Read in full
Tractor & Rural Finance
…ke financiers silence as "Go Ahead" sign and indulge in all kinds of practices. These would range from giving parrallel credit to customer for margin money, bond execution between dealer and customer, RC issual being withheld till margin payment is complete. Just because a pr…Read in full
Tractor & Rural Finance
…ession discussions, one of my team mates asked " We have multiple functions attached to a Retail Loan - Sales/Business, Credit/ Underwriting, Policy Drafting, Product Management, Operations, Collections, Customer Service, Marketing etc. Which amongst these would be most criti…Read in full
Tractor & Rural Finance
…iation in implements used and what was reported during initial FI, then the verification controls at the branch and the Credit team are said to be weak . FI is a defined process and hence this observation will qualify as NEGLIGENCE. The management would be keen on knowing the…Read in full
Tractor & Rural Finance
Originally Written on May 9, 2017 One of the first aspects I was taught to look at in a Tractor, was ........... Guess what - Not Engine, HP, Pulling Capacity, Use, Condition, Model popularity etc. It was about deducing information from mere look at the Tracto…Read in full
AI & Digital Lending
AI-driven lending is fast, digital, and convenient —but are borrowers really aware of the hidden risks? Interest rates that dynamically change without notice Hidden processing & penalty fees buried in fine print Arbitration clauses that block legal recourse Au…Read in full
Fraud, Ethics & Governance
…ere is no process, sequences of activity are out of radar and do not even come with purview of governance. Paradigm 5 - Credit Bureau Behavioral Patterns My interactions with many across various financial institutions or banks, have shown a new pattern : (a) The Credit Bureau…Read in full
Fraud, Ethics & Governance
…s is the bias that the human instinct has towards truth. If we look at the activities of Field Investigation, Sourcing, Credit Underwriting, Fraud Evaluations, this principle is at work The Sourcing Team believes that the Customer is uttering the Truth, unless the sourcing of…Read in full
Credit & Underwriting
…i sessions, when discussions meandered into questioning the need for a separate underwriting faction. The hypothesis : “Credit Assessment / Underwriting as a process is a drain / bane, in the RURAL FINANCE background. “ Instead of straightaway being judgemental, I stepped bac…Read in full
Tractor & Rural Finance
A recent chance meeting at an Agri University, led a group of us discussing very broadly on the systems orientation / adapting of an algorithm based approach in Agri Business Management. It was very interesting to note , of trends, where in many farmers used t…Read in full
Tractor & Rural Finance
…he current age, have mechanisms to produce duplicate invoices / bills. a. If subsidy is not available for a customer, a credit of 6 months is provided for the amount of Subsidy and sale is booked. Invoice is provided to financier stating “No Subsidy”. Within 6 months, about 4…Read in full
Tractor & Rural Finance
…ever, the focus has shifted from product and capability to Pricing, Discounts, Exchange Values etc. Manufacturers offer credit, inventory credit based on the dealer capital and constitution. Many of them have floated separate finance companies and fund dealers through this ar…Read in full
Leadership & Reflection
The “Pre-Owned” vehicles have always been a special segment !! To the world of tractors this is nothing new either. A colleague of mine was exchanging notes with me on the various facets involved in Used / Pre-Owned Tractors. The key link as we discussed, turn…Read in full
Credit & Underwriting
In a recent ACFE conference, I was lucky to hear Mr. Muralidharan, Co-Founder, Hethi, talk of "disruptive change" in a new and novel way. He was mentioning that if we could clone our knowledge / experiences into bots making ourselves redundant, and look beyond…Read in full
Tractor & Rural Finance
THUREEYA / SAHASRAHARA - The overview / Big Picture " The Brain " One of the main challenges in the assessment methodology is – Dissection / eliciting information with the big picture in mind. To understand this better, we take the example of a jigsaw puzzle w…Read in full
Tractor & Rural Finance
…technique. To explain this further, the best segment of customers are SHG (Self Help Groups) and EC / MSME ( Enterprise Credit / Micro, Small & Medium Enterprises ). These customers are less veiled than the other customers who do get trained to hide their emotions. While tech…Read in full
Tractor & Rural Finance
…ned himself with an example. A customer was assessed by them, and found fit to be financed. Based on their policies and credit norms, the customer was evaluated for 80% Loan to Value on a particular asset ( let's say a truck ). 6 Months later, this asset had to be repossessed…Read in full
Tractor & Rural Finance
Continued from Part 1.... ANAHADHA - Information Eliciting " The Immunity System" Information about the Customer builds better health in the Customer - Financier Relationship. Ultimately, irrespective of use, the intention forming happens in this CHAKRA. Inten…Read in full
Credit & Underwriting
…g of Farm Equipments is in itself an exhibition of Intent patterns. An honest person would rather be concerned with his credit track record being spoilt due to such exhibition of protest through non-payment. This is a case where the farmer earns well enough, and yet would lik…Read in full
Fraud, Ethics & Governance
…re a filter had been placed to screen and stop the entry of a certain set of profiles into my portfolio, as part of the credit process and soon found that the system had been hoodwinked and the very profiles we wanted to push back had entered the system and was part of my por…Read in full
Fraud, Ethics & Governance
…te. Nay, NBFCs are not excluded in this rat"e" race. Can we all confidently say that all our internal stakeholders of – Credit, Operations, Sales and Strategic heads all understand the business and its model well ? If your answer was Senrios do understand - Seniors in the com…Read in full
Fraud, Ethics & Governance
…e whole thing ? None of the departments were able to put it up in this clarity. The simple thing that would have helped credit in understanding is what pH value of soil is required for Lemon Cultivation – 5.5 – 6.5 pH; Coconut has 5.5 – 8.0 ; Mango – 4.5 – 7.0; So if the cust…Read in full
Credit & Underwriting
…ance and asked for examples to my line of Tractor Finance. "Ok - let's begin defining contributors - sales, operations, credit, collections, audit teams. A common factor runs through all - productivity. Yet this is spoken of, in average terms. That is sum of units / files / m…Read in full