16.7 Continuous monitoring and ongoing diligence

A loan that looked fine at sanction can deteriorate quietly over the loan life. Continuous monitoring is the discipline of refreshing key data periodically and reacting to behavioural signals — well before classification (90+ DPD = NPA) confirms what could have been caught months earlier.

For revolving working-capital lines especially — where the loan is alive for years — continuous monitoring is the primary risk-management mechanism post-sanction.

What to monitor

A. Bureau refresh

Cadence: every 90 – 180 days for active borrowers; monthly for high-ticket or high-risk.
Method: soft pulls where supported; hard pulls if soft unavailable.
What it catches: borrower taking new loans elsewhere (debt stacking), DPD on other facilities, status changes (write-offs, wilful defaulter declarations).

B. GST data refresh

Cadence: monthly is ideal (GST 3B is monthly).
Method: borrower’s consent is open-ended within the consent scope; system pulls automatically.
What it catches: turnover decline, late filings, GSTIN suspension / cancellation, drastic change in counter-party mix.

C. Bank-statement refresh (AA)

Cadence: monthly for active revolving lines.
Method: AA consent at sanction with monthly fetch frequency; refresh as scheduled.
What it catches: balance drop, credit-turnover drop, NACH bounces, new EMIs taken elsewhere, unusual cash deposits, account closure / shift.

D. MCA / Udyam status

Cadence: monthly automated lookup.
What it catches: company struck off, director resignation, Udyam status change, share-pattern change.

E. Field re-verification

Cadence: annual for material-ticket; 6-monthly for revolving lines; on EWS.
What it catches: business no longer operating from premises, change in operational tempo, change in licence display.

F. Industry / regulatory news

Cadence: continuous (vendor-driven feeds where available).
What it catches: regulatory action against the borrower / promoter, sector-wide stress, anchor exit.

G. Sanctions / PEP / adverse media

Cadence: at sanction + annually + on any new applicable list.
What it catches: borrower or BO appearing on sanctions list; adverse media event.

H. Litigation refresh

Cadence: annual + on EWS.
What it catches: new civil / criminal / IBC case filed against borrower or promoter.

I. Customer / supplier change

Cadence: monthly via GST data.
What it catches: top-buyer / top-supplier churn; concentration drift.

J. Anchor relationship (where applicable)

Cadence: quarterly (anchor portal if integrated; periodic call otherwise).
What it catches: anchor put borrower on watch, anchor reduced purchase volumes, anchor relationship terminated.

Early Warning Signals (EWS)

The platform’s EWS engine (3.L) processes the data above and surfaces alerts. Common EWS triggers:

Bank-derived

Average bank balance drop > 30% MoM.
Monthly credit turnover drop > 30% MoM, or > 50% over 3 months.
NACH bounces in current month >= 2.
Negative balance days spike (in last 30 days, >= 5 negative-balance days vs prior baseline).
New large EMI detected in bank pattern.
Unusual cash deposit spike.
Account activity stopped (no transactions for >= 14 days).

GST-derived

Late filing of latest 3B.
Turnover decline > 20% MoM or > 30% over 3 months.
GSTIN status change to suspended / cancelled.
Counter-party concentration shift — sudden dependence on a new buyer / loss of major buyer.

Bureau-derived

New high-value loan detected at another lender.
DPD reported on any facility at another lender.
Write-off / settlement reported at another lender.
Multiple recent enquiries (rate-shopping; financial stress).

MCA-derived

Company status changed to under-process / strike-off.
Director resigned recently.
Shareholding pattern change.

Litigation-derived

New case filed against borrower / promoter.
NCLT / IBC proceeding initiated.

Industry / regulatory

Regulatory action against borrower / industry segment.
Anchor relationship deteriorated (for SCF borrowers).

Behavioural / operational

Borrower’s communication non-responsive (calls / SMS not picked up).
Recent visit observations concerning — staff cut, stock down, owner absent.
PTP (promise-to-pay) broken.

EWS triage process

EWS Signal Raised
        │
        ▼
   [Auto-categorise severity: High / Medium / Low]
        │
        ▼
   [Route to risk team queue per severity]
        │
        ▼
   Triage analyst reviews:
   - Recent data
   - Borrower's overall picture
   - Other signals from same borrower
        │
        ▼
   Action determined:
   ├── False positive → close
   ├── Genuine but minor → monitor for X weeks
   ├── Investigate → field re-visit / call borrower
   ├── Restrict draws → for revolving lines, pause limit
   ├── Restructure offer → if borrower needs accommodation
   ├── Recovery escalation → if signal severe
   └── Refer to credit committee → if material exposure

Cadence summary

Signal type	Refresh cadence	Triage SLA
Bank statement (AA)	Monthly	High-severity within `48 hours`
GST	Monthly	Within `1 week`
Bureau	Quarterly	Within `1 week`
MCA	Monthly	Within `2 weeks`
Litigation	Annual + on flag	Within `2 weeks`
Sanctions / PEP	Annual + on update	Immediate on confirmed match
Field re-visit	Annual + on EWS	Visit within `2 weeks` of EWS
Anchor data	Quarterly	Immediate on material status change

Restrict-draws protocol (for revolving lines)

For a revolving WC line, the platform supports pause-on-EWS — temporarily restricting borrower’s ability to draw further without paying down existing balance.

Triggered automatically by severe EWS:

GSTIN cancelled.
Bureau write-off appears.
NCLT proceedings initiated.
Multiple NACH bounces.

Borrower informed; analyst reviews; pause lifted only after investigation.

Communication with borrower on EWS

For minor / informational signals: monitor; do not communicate (avoid spooking borrower needlessly).
For material signals: outreach by RM / analyst to understand from borrower’s side.
For severe signals affecting drawdowns: explicit borrower communication explaining the pause.

Periodic borrower-relationship review

Annual for all active borrowers — light review.
Quarterly for material-ticket / high-risk segments.

The review captures:

Current outstanding + utilisation.
DPD history during the period.
Refreshed bureau / GST / bank metrics.
Field-FI re-verification.
Promoter / BO refresh.
Any litigation / regulatory news.
Renewal recommendation.

What the platform must enforce

Periodic refresh scheduled and tracked — no slippage past SLA.
EWS engine running continuously; signals queued.
Triage queue with SLA timers.
Restrict-draws workflow operational.
Communication templates per severity.

Compliance touchpoints

DPDP — monitoring data is personal data; ongoing consent must cover.
Digital Lending Guidelines — borrower consent for periodic refresh captured upfront.
Fair Practices Code — borrower communication on EWS actions per FPC.
Internal audit — periodic sample-review of EWS triage decisions.