18. LOS + LMS deep-dive spec
LOS (Loan Origination System) and LMS (Loan Management System) are the two engines of any lending platform. They are described in module form in 3.E underwriting engine and 3.J LMS, and in backlog form in 13.6 and 13.10.
This section is the spec-level deep-dive — what actually happens inside, in detail. It is the reference an engineer implements against and the baseline an auditor checks against. Conventions described are Indian-practice as commonly followed.
| Page | Covers |
|---|---|
| 18.1 LOS overview and state machine | Application lifecycle states + transitions + events + side effects |
| 18.2 LOS calls and operations | Every operation in LOS — APIs, integrations, validations, gates |
| 18.3 LMS overview and state machine | Loan account states + transitions + events |
| 18.4 Interest computation conventions | Day-count, calendar, leap-year, holiday, EOM, prepayment, restructure conventions |
| 18.5 Schedule generation algorithms | Bullet, EMI, structured, drawdown-based for lines — with worked examples |
| 18.6 Daily batch — order of operations | End-of-day batch sequence — accrual, classification, provisioning, NACH, recon |
| 18.7 Charge ledger mechanics | Per charge type — computation, GL postings, GST handling, waterfall |
| 18.8 Waterfall mathematics | Concrete payment-allocation algorithm with worked examples |
| 18.9 Co-lending share accounting | Share-level postings, dual ledgers, lockstep operations |
| 18.10 Bureau submission file format | CIBIL Consumer + Commercial file format, field reference, submission cycle |
| 18.11 Reconciliation algorithm | Concrete matching algorithm for sponsor-bank vs LMS expected; exception handling |
| 18.12 RBI returns reference | DNBS returns the LMS produces — fields, sources, validation |
| 18.13 Edge cases catalogue | Exhaustive list of edge cases the LOS / LMS must handle |
What’s in scope here vs already covered
Section titled “What’s in scope here vs already covered”Already covered (referenced, not repeated)
Section titled “Already covered (referenced, not repeated)”- High-level architecture: Section 5.
- Schema reference: 5.9.
- Sequence diagrams: 5.8.
- Module surfaces: Section 3.
- Backlog: Section 13.
- NACH file format: 5.14.
What this section adds
Section titled “What this section adds”- State machines — every state and transition, formally.
- Per-operation specs — what happens, what’s validated, what’s posted, what’s audited.
- Computation specs — interest formulas, schedule generation, waterfall mathematics, worked examples that engineers and finance teams can validate against.
- Format references — CIBIL submission, RBI returns.
- Edge case catalogue — the exhaustive operational reality.
Indian-practice conventions
Section titled “Indian-practice conventions”The conventions in this section reflect standard Indian lending practice:
- Day-count convention: actual / 365 (most NBFCs).
- Interest periods: monthly accrual; daily computation on outstanding.
- Holiday handling: typically “push to next working day” for dues.
- Penal charges: separate from interest (per RBI Aug 2023 circular).
- Upgrade on full clearance (per RBI Nov 2021 IRACP clarification).
- GST on fees: standard
18%;CGST + SGSTif intra-state;IGSTif inter-state. - Currency: INR; amounts stored as
NUMERIC(18, 2)(rupees with 2 decimal places for paise). - Rates: stored as decimals (
0.1950for19.50%). - Daily classification: end-of-day per RBI Nov 2021.
Conventions vary by lender. Where this spec recommends, it does so for the SME WC wedge described in this doc. Production conventions must be board-approved and consistent across the platform.