Rebuilding an NBFC lending stack to survive an RBI inspection

Sahaj Credit is an RBI-registered NBFC writing small-ticket unsecured business loans — ₹50,000 to ₹5 lakh, twelve to twenty-four months, to kirana stores and small traders across five states. They came to us with a growth problem and left with a compliance rebuild, because the growth problem was only a sign of a deeper issue.

The stack they had would not survive an inspection

The RBI's Digital Lending Guidelines are very clear on one point: all loan disbursals and repayments must flow directly between the borrower's bank account and the regulated entity's bank account. No middle account, and no pooling in an account controlled by a lending service provider or a technology vendor.

Their existing vendor setup pooled collections in a middle account before moving them to the NBFC. It was easy. It was also exactly what the guidelines forbid, and no new features on top of it could have made it acceptable.

And the operational numbers were bad on their own terms

• KYC turnaround was three days. Documents were emailed, a person looked at them, and the answer came back after the applicant had usually already borrowed from someone faster.
• 19% of NACH mandate registrations were failing, mostly because names and account details did not match, and nobody checked them before submission. Every failed mandate is a customer who must be collected from by hand, forever.
• Balances were a mutable column. There was a loans.outstanding field that code updated. When it did not match the bank, and it often did not, there was no way to tell which was wrong, because there was no history to replay. This kind of bug does not get fixed in testing. An auditor finds it.
• Field collection agents gave paper receipts from a book. Cash matching ran a week behind and depended on trust.

The move put a live book of 14,000 loans onto the new ledger over one weekend. It was matched to the rupee against the bank before the switch was declared done. We had practised it three times on a copy of live data.

Results

• KYC turnaround: 3 days → 11 minutes (P50). Running the checks in parallel is most of the gain. The rest is that automatic checks now settle 87% of applicants without a person ever looking. People look at the 13% where looking is worth the time.
• Mandate success: 81% → 94.6%. Nearly all of that came from penny-drop checking the bank account before submitting the mandate, not after. It was about two days of work that had been waiting there for two years.
• Reconciliation exceptions: 0.03% of postings, each with a named owner and an SLA. They now have a number for this. Before, they only had a feeling.
• Zero rupees in transit through a PRS-controlled account. There is no such account. This was what the board cared about most, and it is the one we are proudest of, because it would have ended the company had it gone the other way.

What changed structurally

Their compliance officer can now answer a regulator's question about any loan in the book (every state, every change, every posting, every consent) from a screen, in front of the person asking. Before this, that answer took a week and a spreadsheet, and they only hoped it was right.

Field collection cost per ₹100 collected fell. The signed-receipt system removed the delay in matching cash and, with it, a kind of leakage nobody had wanted to talk about.