3.I Disbursement

Purpose

Move funds from lender to borrower (or vendor on borrower’s instruction) reliably and reconcileably, with every pre-condition checked and every regulator-required disclosure captured.

In-scope features

Pre-disbursement checklist

• KYC complete and not expired.
• KYB complete (entity registration, GST active).
• Sanction within validity.
• All borrower-side documents executed (agreement, DPN, PG, mandates).
• KFS acknowledged.
• NACH mandate active (registered with sponsor bank, NPCI ack received).
• Bank account verified (penny drop within tolerance window).
• Sanctions screen clean.
• Decision engine outcome still valid (no new data invalidates).
• Exposure caps unbreached.
• Co-lender approval, if applicable.
• DLG instrument confirmed (if applicable).
• Cooling-off opt-out / acceptance captured (if applicable).

Approval

• Disbursement approval matrix — per ticket, per channel, per product.
• Maker-checker for disbursement instruction.

Payout

• Bank transfer integration — IMPS / NEFT / RTGS via sponsor bank API or payout vendor.
• Escrow / nodal / current account flow — own NBFC’s main account, or co-lending escrow.
• Split disbursement — for vendor-direct disbursement; multiple recipients.
• Vendor / direct disbursement — pay to anchor / vendor / merchant on borrower instruction (with explicit consent per DL Guidelines).
• Invoice-level disbursement — for invoice-backed products.
• Top-up disbursement — on existing line / loan.
• Disbursement cancellation — before UTR generated.

UTR + acknowledgement

• UTR capture — bank returns UTR for each transfer; persisted.
• Acknowledgement to borrower — SMS / WhatsApp / email with UTR and confirmation.
• Status sync — successful, failed, pending, returned.

Reconciliation

• Daily reconciliation of disbursement instructions vs sponsor bank actuals.
• Returned funds handling — if borrower’s bank rejects (account closed, frozen), funds returned; reverse loan booking.

Co-lender coordination

• Escrow management — partner funds released into escrow per agreement; originator’s funds joined; combined disbursed to borrower.
• Partner ack — partner’s loan booking confirmation captured before / after disbursement per agreement.

Out of scope

• LMS schedule / accrual — see 3.J.
• Collections — see 3.K.

Key entities

• DisbursementInstruction — per disbursement; one per draw for revolving line.
• Payee — borrower or vendor on borrower’s behalf.
• PayoutAttempt — per attempt to a payout rail.
• Utr — successful payout reference.
• EscrowMovement — for co-lent disbursement.
• Reconciliation — daily, per account.

Key workflows

1. Single disbursement — checklist passes → instruction created → payout → UTR captured → loan account activated.
2. Co-lending disbursement — checklist + partner ack → escrow funding from partner + originator → combined payout to borrower.
3. Split disbursement — sanction allows multi-recipient → one instruction with multiple legs → reconciled as a set.
4. Top-up draw — line in good standing → draw approved → payout to borrower → schedule generated for this draw.
5. Failed disbursement remediation — bank returns funds → reverse loan booking → notify borrower → re-verify bank account → re-attempt or close.

Integrations

• Sponsor bank payout API — IMPS / NEFT / RTGS / UPI; bank-specific.
• Payout aggregators — Razorpay X, Cashfree Payouts, Setu Bridge, Decentro, M2P.
• Penny-drop service for last-mile bank account check.
• NACH activation status from sponsor bank.
• Sponsor bank statement for reconciliation.

APIs

• POST /disbursements — create instruction.
• POST /disbursements/{id}/approve — maker-checker approval.
• POST /disbursements/{id}/execute — fire to payout rail.
• GET /disbursements/{id}/status.
• POST /disbursements/{id}/cancel.
• GET /reconciliation/disbursement/{date} — daily recon report.

Events emitted

• disbursement.created
• disbursement.approved / disbursement.rejected
• disbursement.executed / disbursement.failed
• utr.captured
• disbursement.returned
• reconciliation.matched / reconciliation.mismatched

Edge cases

• Borrower changes bank account between sanction and disbursement — re-do penny drop + NACH; potential re-agreement.
• Sponsor bank API timeout — async status poll; idempotency key prevents double-payout.
• Funds returned by beneficiary bank — reverse booking; notify and re-attempt or close.
• Co-lender’s funds not in escrow — disbursement queued; partner SLA breach handled.
• Partial disbursement for split — leg fails; decide policy (rollback all or proceed with successful legs).
• NACH ack delayed — disbursement held; reach SLA → escalate.
• Sanction validity expired during checklist run — re-sanction or extend.
• Cooling-off exercised after disbursement — recover principal, refund proportionate fees per RBI rules.

Compliance touchpoints

• Digital Lending Guidelines — direct flow lender → borrower; vendor payout only with explicit consent.
• KYC MD — KYC valid at disbursement.
• Co-Lending Guidelines — escrow / nodal account discipline.
• IT MD — secure communication with sponsor bank.
• DPDP — borrower notification of disbursement.

MVP vs production

Feature	MVP	Production
Single disbursement to borrower	✓	✓
NACH activation pre-check	✓	✓
Co-lending escrow flow	✓ (when first partner integrated)	✓
Vendor payout (with consent)	(Phase 2)	✓
Split disbursement	(Phase 2)	✓
Multi-rail (IMPS / NEFT / RTGS)	✓	✓
Payout vendor failover	(Phase 2)	✓
Real-time UTR + ack	✓	✓
Returned funds workflow	✓	✓
Reconciliation engine	Manual ops at MVP	Auto-recon + exception queue

Related: 3.G Co-lending, 3.J LMS, 4.8 Mandates and repayments, 4.12 Core banking / payouts, 13.9 Disbursement backlog.