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by Rakesh Waghela

13.9 Disbursement

Epic overview

Section titled “Epic overview”

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

Disbursement is the single highest-stakes flow in operations — getting it wrong means real money moving incorrectly. The platform must enforce idempotency (no double-payouts), strict checklist gating, and clean reconciliation against the sponsor bank.

User stories

Section titled “User stories”
  1. As an ops user, I want a single screen with every pre-disbursement check status (KYC, sanction validity, KFS acknowledged, mandate active, etc.) for fast review and execution.
  2. As a maker, I want to create a disbursement instruction; as a checker, I want to approve before execution per the delegated authority matrix.
  3. As a borrower, I want UTR confirmation within minutes of disbursement via SMS + WhatsApp + email.
  4. As a co-lender, I want my share to flow into the co-lending escrow on time and be combined cleanly with the originator’s share before payout.
  5. As a borrower, I want to pay my vendor / supplier directly on disbursement (with explicit consent) without funds passing through me.
  6. As an ops user, I want returned-funds (beneficiary bank rejected) to automatically reverse the loan booking and trigger a re-attempt or close workflow.
  7. As an admin, I want to swap payout vendor (sponsor bank API ↔ RazorpayX ↔ Cashfree) via routing config without code change.
  8. As a finance officer, I want daily reconciliation between sponsor-bank statement and platform’s expected payouts, with exceptions queued.
  9. As a system, I want idempotency-keyed payout calls so a network failure / retry doesn’t cause double-payout.
  10. As a CTO, I want a circuit breaker on payout rail vendors so a slow vendor doesn’t block all disbursements.
  11. As a compliance officer, I want every disbursement audited with pre-disbursement checklist evidence and post-disbursement notifications.
  12. As an analyst, I want to see the disbursement TAT distribution by channel / product / time-of-day for SLA tracking.
  13. As an ops user handling a stuck payout, I want clear ageing visibility and one-click escalation to sponsor bank’s API support.
  14. As a borrower whose bank account fails KYC name-match at penny drop, I want a clear path to update the account and re-attempt.
  15. As a borrower with split disbursement (own account + vendor account), I want both legs visible with separate UTRs.

API requirements

Section titled “API requirements”

Disbursement creation and approval

Section titled “Disbursement creation and approval”
  • POST /v1/disbursements — create instruction. Body: { sanction_id, amount, to_account_token, to_ifsc, purpose, splits[]? }. Returns { disbursement_id, status: "pending_approval" }.
  • POST /v1/disbursements/{id}/approve — maker-checker approval. Body: { approver_id, notes? }.
  • POST /v1/disbursements/{id}/execute — fire to payout rail. Returns { status: "executing" }.
  • POST /v1/disbursements/{id}/cancel — cancel before execution.
  • GET /v1/disbursements/{id}/status — { status, utr?, attempted_at, settled_at }.

Pre-disbursement checklist

Section titled “Pre-disbursement checklist”
  • GET /v1/disbursements/{id}/checklist — current checklist status per pre-condition.
  • POST /v1/disbursements/{id}/checklist/override — manual override with deviation reason.

Co-lending escrow

Section titled “Co-lending escrow”
  • POST /v1/escrow/co-lending/fund — request partner funds release.
  • GET /v1/escrow/co-lending/balance — current escrow balance per partner / pool.
  • POST /v1/escrow/co-lending/disburse — combined disbursement from escrow.

Vendor / split disbursement

Section titled “Vendor / split disbursement”
  • POST /v1/disbursements/{id}/splits — define split legs. Body: { legs: [{ to_account, amount, beneficiary_type }] }.
  • GET /v1/disbursements/{id}/legs/{leg_id} — per-leg status.

Reconciliation

Section titled “Reconciliation”
  • GET /v1/reconciliation/disbursement/{date} — daily recon report.
  • GET /v1/reconciliation/disbursement/exceptions — unmatched queue.
  • POST /v1/reconciliation/disbursement/exceptions/{id}/resolve — ops resolution.

Returned funds

Section titled “Returned funds”
  • POST /v1/disbursements/{id}/returned — capture returned-funds event. Body: { returned_amount, bank_ref, reason_code }.
  • POST /v1/disbursements/{id}/reattempt — re-attempt after issue resolved.

Vendor routing

Section titled “Vendor routing”
  • GET /v1/admin/vendor-routing/payout.
  • POST /v1/admin/vendor-routing/payout.

Data model

Section titled “Data model”
  • disbursement_instruction, payout_attempt, utr, escrow_movement, disbursement_leg, reconciliation_exception, returned_funds_event.

UI screens

Section titled “UI screens”

Ops-facing

Section titled “Ops-facing”
  • Pending-approval queue with per-disbursement checklist status.
  • Approval screen with full sanction + borrower context + KFS link.
  • Execute screen with final confirmation + idempotency-key generation.
  • Stuck-payout queue with ageing.
  • Daily reconciliation dashboard with exception triage.

Borrower-facing

Section titled “Borrower-facing”
  • Status tracker during disbursement (initiated → processing → completed with UTR).
  • Notification with UTR + amount + account masked.

Admin

Section titled “Admin”
  • Vendor routing config.
  • Payout-rail performance dashboard.
  • Returned-funds analysis.

Backend services

Section titled “Backend services”
  • Disbursement service — orchestration, checklist enforcement, idempotency.
  • Payout adapter with vendor routing, circuit breaker, retry.
  • Escrow management — co-lending escrow + own collection / payout accounts.
  • Reconciliation service — daily recon of sponsor-bank statement vs platform expected.
  • Returned-funds handler — reverse loan booking, trigger remediation.

External integrations

Section titled “External integrations”
  • Sponsor bank payout API — primary rail.
  • RazorpayX Payouts — secondary / aggregator.
  • Cashfree Payouts — alternative.
  • Setu Bridge — for some sponsor banks.
  • Penny-drop service for last-mile bank account verification.

Test cases

Section titled “Test cases”

Happy path

Section titled “Happy path”
  • Pre-disbursement checklist passes → instruction created → approved → executed → UTR captured → loan activated.
  • Co-lending disbursement: partner funds into escrow → originator funds → combined payout → single UTR.
  • Split disbursement: multi-leg payout; each leg gets own UTR.
  • Borrower notification within 2 minutes of UTR capture.

Failure / edge

Section titled “Failure / edge”
  • Sponsor-bank API timeout → idempotency prevents double-payout on retry.
  • Beneficiary bank rejects (account closed / frozen) → funds returned → loan booking reversed.
  • Co-lender’s funds not yet in escrow at execution time → disbursement queued.
  • NACH not active when checklist runs → block.
  • Sanction validity expired between approval and execution → re-sanction or extend.
  • Cooling-off opted-in but not yet elapsed → wait.
  • Approver lacks delegation for amount → escalate.

Reconciliation

Section titled “Reconciliation”
  • Sponsor-bank statement matches every executed payout.
  • Mismatched amount → exception queue with diff.
  • Extra credit in account (returned funds without notification) → flag for ops.
  • Missing payout (system shows executed, bank shows none) → urgent escalation.

Edge cases

Section titled “Edge cases”
  • Borrower changes bank account between sanction and execution → re-do penny drop + NACH; defer execution.
  • Vendor in split disbursement has invalid IFSC → entire split fails; partial-success policy decision.
  • Co-lender’s funds released into escrow but pulled back due to operational issue → reconcile and re-fund.
  • Daily payout volume exceeds sponsor-bank cap → split batches; alternate vendor.
  • RTGS cut-off time approaches → mode auto-downgrades to IMPS / NEFT.
  • Bank holiday → disbursement queued for next working day per policy.
  • Foreign-bank beneficiary (NRE / NRO) — additional FEMA-related checks for transfers above thresholds.
  • Borrower in cooling-off period exercises exit — recover principal, refund proportionate fees.

Acceptance criteria

Section titled “Acceptance criteria”
  • Disbursement latency from sanction to UTR < 2 hours median; < 6 hours p95.
  • Pre-disbursement checklist enforced as hard gate (no bypass without explicit deviation).
  • Idempotency on every payout call (verified via chaos test of duplicate API submissions).
  • Daily reconciliation exception rate < 0.5%.
  • Returned-funds workflow tested end-to-end with bank simulation.
  • Co-lending escrow flow tested with at least one partner.
  • Vendor failover tested with chaos drill.
  • All disbursements audited with checklist evidence and UTR capture.

Compliance touchpoints

Section titled “Compliance touchpoints”
  • Digital Lending Guidelines — direct flow lender → borrower; vendor payout requires explicit consent.
  • KYC MD — KYC valid at disbursement.
  • Co-Lending Guidelines — escrow discipline.
  • IT MD — secure communication with sponsor bank; idempotency.
  • DPDP — borrower notification.
Section titled “Related”