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AI & Digital Lending
…Known and Used This is information that is available to the institution and is also clearly used by the decision-maker. Audited financials, bureau behaviour, banking conduct, collateral value, repayment track record, GST trends and key ratios may all be available and properl…Read in full
AI & Digital Lending
…tability. AI can help organise facts. It can support interpretation. It can improve consistency. It can create a better audit trail. But accountability must remain human. The future of lending is not black-box approval. It is better-supported human judgement. 5. Engage: Make…Read in full
Fraud, Ethics & Governance
…wered: Who explains why a listed matter was not heard? There is: No formal disclosure of reasons No publicly accessible audit trail No grievance redressal mechanism for listing-related issues Accountability, as it stands, is internal—not citizen-facing . A Question of Percep…Read in full
AI & Digital Lending
…meet yesterday’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…Read in full
AI & Digital Lending
…ding , especially for proprietorship and partnership firms . Unlike large corporates, these entities often lack: robust audited financial statements formal governance structures detailed disclosure frameworks. In many cases, the most meaningful risk signals lie outside forma…Read in full
Fraud, Ethics & Governance
…pledging matters more than any single test. Large or unusual tickets are escalated; routine ones are not. Post-sanction audits manage risk that cannot be tested upfront. Speed at the counter is prioritised over metallurgical perfection. Decisions aim to be defensible and rep…Read in full
Fraud, Ethics & Governance
…Design Tweaks Didn’t Work RBI tried incremental controls , not an outright ban: ✔️ LTV caps ✔️ End-use declarations ✔️ Audit & stock statements ✔️ Shorter review cycles ✔️ Classification tweaks But all of these failed because: Form was controlled. Substance was not. 4. The…Read in full
Fraud, Ethics & Governance
…. The Larger Point Gold lending is expanding rapidly — but growth without clarity creates conduct risk . Most disputes, audits, and regulatory pushbacks arise not from bad intent, but from: Product layering Ambiguous responsibility Over-engineering around restrictions Good g…Read in full
Fraud, Ethics & Governance
…) Cooperative Banks Interpretation Closure Disputed ✔️ Multiple reported consumer & HC cases ✔️ Consumer forum cases ✔️ Audit & fraud cases ✔️ Frequent Exit is contested, not default Valuation Challenged ✔️ Yes ✔️ Yes ✔️ Yes ✔️ Yes Valuation fairness litigated Auction Contes…Read in full
Tractor & Rural Finance
…wal-heavy 40–60% >36 months Conditional liquidity Perpetual TSZO never zero Price-dependent exposure TSZO is binary, auditable, and behavioural . 10. Behavioural Signal Decoder Signal Meaning Inference High renewals Exit deferred Duration risk builds Low auctions Stress a…Read in full
Tractor & Rural Finance
…s with TSZO >36 months , High-risk portfolios: a material subset where TSZO has never reached zero . TSZO is binary, auditable, and behaviour-revealing , unlike arrears-based metrics. Annual Full Closure as a Quantitative Test A full closure forces four measurable resets:…Read in full
Credit & Underwriting
…cturing Actually supporting trade credit 6C. Job-Work + Retail (No Separation) Entrusted gold shown as inventory Severe audit and collateral risk 6D. Retail + Bullion Trading MTM gains mask operating stress Price movement mistaken for business strength The Banker’s Reality C…Read in full
Tractor & Rural Finance
…-Specialised Job-Worker Temple jewellery, stone-heavy designs. 3D. Job-Worker with Advance Gold Temporary custody. High audit sensitivity. Critical Banking Rule Never fund gold here. Only fund receivables, tools, or premises—if at all. Manufacturer vs Job-Worker — The Defini…Read in full
Fraud, Ethics & Governance
…softness and precision Some become plain-gold inventory — the banker’s favourite Some become stone-heavy designs — the auditor’s nightmare Every ornament belongs to a family , a bucket , a behaviour pattern . 💠 Bankers rarely see this. 💠 Karigars never forget it. Because…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 tri…Read in full
Fraud, Ethics & Governance
…answer: No. Long answer: Absolutely not — and RBI rules are clear about this. Yet, this confusion persists in branches, audits, and even among frontline staff. This blog breaks down the regulatory truth, the operational reality, and what customers can do when faced with this…Read in full
Fraud, Ethics & Governance
…ence. 🧭 The Real Firewall In risk management, we often speak of the three lines of defence — business, compliance, and audit. But the real firewall lies before all of them. It isn’t built of checklists or dashboards. It’s built of conscience. Ethics is the zero line of defe…Read in full
AI & Digital Lending
…tinely track at the account level , not group level. CIF duplication rates of around 8–12 % are common in internal data audits. That’s how a ₹50 crore sanctioned exposure quietly becomes ₹56 crore overnight. No alarm. No alert. Just absence of a “Golden Source” of truth. The…Read in full
AI & Digital Lending
…ination teams saw it as an ops task , not underwriting data. Disbursement was seen as the first “real exposure” moment. Auditors tested pre-drawdown , not pre-sanction . Why This is Risky Exposure begins at sanction , not disbursal — a lapsed or fake LEI can already taint th…Read in full
AI & Digital Lending
…ticipant sends corrupted updates to bias the global model. Robust aggregation , client vetting , drift monitoring , and audit trails . Operational Complexity Building and managing FL infra in-house is resource-heavy. Start with a managed FL platform or open-source stacks lik…Read in full
AI & Digital Lending
…system are telling us (composite interview snippets) Public-sector branch manager, North India: “Policy says cash-flow. Audit wants collateral. Give me a weekly-sweep product and a clean AA journey; I’ll move.” Private-bank risk head : “Guarantees help, but our claim cycle t…Read in full
Credit & Underwriting
…d pay outs and rapid loan book growth were debt-funded, while actual repayments lagged. Source: Grant Thornton forensic audit (Economic Times coverage). Suzlon Energy (2015–2019) Inventory build-up and rising receivables starved operational cash, even during revenue upticks.…Read in full
AI & Digital Lending
…d for a working capital facility, the branch manager flipped through his file and said, “Where’s your last three years’ audited balance sheet and collateral documents?” Suresh, perplexed, opened his bank app: “Aren’t these monthly credits proof enough of my business activity…Read in full
AI & Digital Lending
…phasized projected cash flows and inventory cycles. Yet, over time, banks drifted toward relying on static indicators — audited financials, ITRs, and ratios like: Current Ratio DSCR (Debt Service Coverage Ratio) Working Capital Gap via MPBF (Maximum Permissible Bank Finance)…Read in full
AI & Digital Lending
…a streams. Credit officers are not yet trained to "read" behavioral and digital signals the way they are taught to read audited financials. There's no regulatory push yet mandating digital trail integration — so it remains "good to have" and not "must-have." Credit committee…Read in full
AI & Digital Lending
…turnover method,” and projections derived from last year’s trial balances. These are comfort zones for both bankers and auditors. But for the average kirana trader, services provider, or digital-first start up — this model is often a poor reflection of reality. Their busines…Read in full
AI & Digital Lending
…e FDs need verification from authority No in-person/voice confirmation from Mayor's office All instructions logged with audit trail No documented compliance trace visible Cross-verification by compliance/risk unit Familiarity and status bias overrode escalation norms Enhance…Read in full
AI & Digital Lending
…verified credibility, claims are processed with secondary scoring and routed for refund in tiered tranches. 🧾 4. Agent Audit Trail Agent Mapping: Compile a list of known Sahara agents by district, block, or society clusters using historical promotional material, public comp…Read in full
AI & Digital Lending
…data cases for manual review. Explainable AI : Models that log and communicate why a decision was made can be faster to audit, escalate, and correct. Parallel workflows : Real-time escalation queues for exceptions can reduce delays without compromising on fairness. The goal…Read in full
Tractor & Rural Finance
Originally written on May 27, 2017 Questions that are frequently asked, with specific regard to Audit / Internal Check / Hindsighting - call it what you may, are very many. Yet the ones that don't get addressed properly and remain very critical are :…Read in full
Tractor & Rural Finance
Used Tractor valuation has always been a challenge. The attempt is constantly to metricize, templatize and simplify the valuation process. They buyer and seller need to conclusively arrive at a value. Today, majority of us use one of the following methods to b…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
Tractor & Rural Finance
AGNA - Awareness / Red Flags " The Intuition" Facial expressions and show of emotions are by far the best indicators of intentions. Many a time these are quick, short or even subtle. Yet the trained eye is able to capture these. Just like finger print types, w…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
Fraud, Ethics & Governance
…ere. It is about some lovely concepts that came out the discussion. It was with a group of friends – all of us from the Audit / Compliance / Regulatory Check / Fraud Prevention background. It was fun, with a lot of new lessons making me feel humbled. Here are some of the exp…Read in full
Fraud, Ethics & Governance
…ere. It is about some lovely concepts that came out the discussion. It was with a group of friends – all of us from the Audit / Compliance / Regulatory Check / Fraud Prevention background. It was fun, with a lot of new lessons making me feel humbled. Here are some of the exp…Read in full
Fraud, Ethics & Governance
…Observation 2 : Theory of “Win -Win” Here’s a small story, which I believe exists in every organization : Mr. Herb was audited by his employer at the time, Allstate Insurance, because his clients were so happy. The company was sure he must be overpaying their claims. Mr. He…Read in full
Credit & Underwriting
…amples 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 / money terms as the ca…Read in full