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18.13 Edge cases catalogue

Production LMS / LOS handles thousands of edge cases. This page catalogues the meaningful ones — what’s expected, what often goes wrong.

LOS edge cases

Application

1. Borrower abandons mid-application

Expected: save state; resume capability for ~30 days; auto-purge thereafter.
Common failure: state persisted but resume URL broken; borrower starts fresh, loses earlier data.

2. Borrower applies via two channels simultaneously

Expected: dedup at lead stage; both channels see “borrower already in process”; attribution policy decides which channel “wins”.
Common failure: two applications created; duplicate KYC effort; conflicting status.

3. Borrower changes loan amount mid-application

Expected: amount editable until submit; re-runs eligibility check.
Common failure: backend cached old amount; decision runs on old.

4. Borrower with multiple GSTINs (multi-state)

Expected: each GSTIN linkable; data pulled per GSTIN; consolidated view.
Common failure: only primary GSTIN considered; multi-state turnover under-stated.

5. Co-applicant out of country

Expected: Aadhaar OTP may fail (UIDAI permits OTP only to Indian SIM); alternate eSign path.
Common failure: stuck; manual intervention needed.

6. Borrower’s data changes mid-application

Expected: re-trigger relevant verifications; recompute decision.
Common failure: old data reflected in sanction; mismatch downstream.

KYC

7. PAN-Aadhaar name fuzzy mismatch

Expected: similarity score < 0.70 → REFER; rare names sometimes flagged.
Common failure: false-decline of legitimate borrowers; or false-accept of true mismatches if score not checked.

8. V-CIP session fails repeatedly

Expected: max attempts capped; switch vendor; alternative path.
Common failure: borrower stuck retrying same failing vendor.

9. CKYC duplicate / multiple KIN

Expected: CKYC system should be unique by PAN; in practice, sometimes multiple KINs exist for same borrower (legacy data). Pick latest; flag for cleanup.
Common failure: confusion; KYC marked complete but wrong KIN persisted.

10. Aadhaar offline zip corrupt / signature invalid

Expected: borrower re-fetches from UIDAI; alternative OVD path.
Common failure: silent failure; borrower confused.

11. Sanctions screening false positive

Expected: REFER for disposition; document false-positive determination; clear.
Common failure: borrower declined for common-name match without manual review.

Data ingestion

12. AA partial fetch (some accounts only)

Expected: nudge borrower for missing; proceed with partial if material sufficient.
Common failure: silent acceptance of incomplete data; bad decision.

13. AA TSP returns garbage / different schema

Expected: schema validation; failover to alternate TSP.
Common failure: parsing crashes; data not ingested.

14. PDF bank statement scanned / image-only

Expected: OCR fallback; quality check; if low quality, manual handling.
Common failure: bad OCR data fed into scoring; false signals.

15. Tampered bank statement detected

Expected: tampering flag → DECLINE or REFER for fraud review.
Common failure: flag missed; borrower approved on falsified data.

16. GST not filed for recent period

Expected: REFER until borrower files; alert borrower with timeline.
Common failure: stale GST data used; decision based on out-of-date.

17. Bureau no-hit

Expected: REFER; consider new-to-credit pathway; rely on cash-flow.
Common failure: auto-decline.

18. Periodic refresh data conflicts with original

Expected: surface as EWS; analyst review.
Common failure: silent override; loss of historical context.

Decisioning

19. New data arrives mid-decision-run

Expected: queue for re-run after data settle.
Common failure: decision uses inconsistent data snapshot.

20. Co-lending: dual policy disagrees

Expected: both approve → co-lend; only originator approves → own book (if eligible); only partner approves → decline.
Common failure: mis-routing.

21. Policy bug declines genuine borrowers

Expected: sandbox catches in testing; production roll-out is gated.
Common failure: policy deployed without sandbox; mass false-declines until rollback.

22. Deviation auto-escalation timeout

Expected: auto-escalate to higher authority; ultimately auto-decline if no action.
Common failure: stuck pending forever.

Sanction / docs

23. Sanction expires while borrower mid-eSign

Expected: extend or re-sanction.
Common failure: loan effectively orphaned; manual rescue.

24. eStamp paper unavailable in state

Expected: fallback workflow (alternate vendor or physical stamping).
Common failure: stuck.

25. Multi-signer eSign one signer drops out

Expected: nudge; alternative; eventually re-issue.
Common failure: incomplete eSign blocks sanction.

Expected: error-code-specific remediation; bank account re-validation; re-register.
Common failure: borrower stuck; manual intervention.

Disbursement

27. Borrower changes bank account between sanction and disbursement

Expected: re-do penny drop + NACH; potential re-execution of agreement.
Common failure: disbursement to old (invalid) account.

Expected: idempotency prevents double-disbursement; status polled.
Common failure: double-disbursement if idempotency mishandled.

29. Beneficiary bank rejects (account frozen / closed)

Expected: returned funds workflow; reverse loan booking; re-attempt or close.
Common failure: orphan loan with bank account that never received funds; LMS thinks loan active.

30. Co-lender’s funds not yet in escrow at execution time

Expected: disbursement queued; partner SLA monitoring.
Common failure: borrower expects disbursement; lender hasn’t received partner funds; stuck.

LMS edge cases

Schedule / accrual

31. Bank holiday / weekend due date

Expected: per board policy — push to next working day or stay; accrual continues; NACH presentation timed appropriately.
Common failure: missed presentation; borrower not given grace.

32. Repayment received before due date

Expected: applied per allocation; if advance, held against next due.
Common failure: counted as overpayment refunded; loses tracking.

33. Partial NACH success

Expected: partial credit; remaining as bounce; charges applied appropriately.
Common failure: full bounce treatment when partial succeeded.

34. Multiple bounces in NACH cycle

Expected: re-presentation per NACH rules (typically 2 – 3 attempts); after cap, mark as final bounce; escalate.
Common failure: unlimited re-presentation; sponsor-bank may flag.

35. Leap year impact on `Actual / 365`

Expected: borrower effectively pays one extra day of interest in leap years; small (~0.27% of annual rate).
Common failure: convention mishandled; year-end mismatch.

36. EOM (end-of-month) for monthly schedules

Expected: Feb 28/29 handling; months with 31 due on 31st.
Common failure: month-end calculation goes to invalid date (e.g., Feb 31).

Classification

37. Daily classification crossing month-end

Expected: daily snapshots; monthly aggregates derived.
Common failure: monthly-only classification (now non-compliant per Nov 2021 IRACP).

38. Upgrade from NPA on partial payment

Expected: NOT permitted per Nov 2021; only full clearance upgrades.
Common failure: legacy logic upgrades on partial.

39. Restructured loan upgrade attempt

Expected: only after observation period + satisfactory performance + approval.
Common failure: auto-upgrade after a few clean months.

40. Multi-loan borrower with mixed performance

Expected: per-loan classification; borrower-level view influences operational priority.
Common failure: borrower-level downgrade applied to all loans without policy basis.

Repayment / waterfall

41. Repayment with disputed charge

Expected: allocate per waterfall but flag for dispute resolution.
Common failure: payment held in suspense indefinitely.

42. Foreclosure of floating-rate MSME with charge applied

Expected: NO foreclosure charge (RBI 2014 ban).
Common failure: charge mistakenly applied; regulator-flag.

43. Penal charge capitalised into principal

Expected: NEVER (RBI Aug 2023 ban).
Common failure: legacy LMS still does this.

44. Multi-draw revolving line repayment

Expected: per agreement — FIFO across draws or specific draw.
Common failure: silent attribution; mis-mapped.

Restructure / write-off

45. Restructure after restructure (re-restructure)

Expected: treated as fresh stress event; further downgrade; tighter review.
Common failure: ignored; appears as routine.

46. Write-off post-restructure-period

Expected: per board approval; bureau updated.
Common failure: silent write-off without approval trail.

47. Post-write-off recovery

Expected: cash basis recognition; bureau updated to reflect recovery.
Common failure: recovery recorded but bureau not updated.

Co-lending

48. Partner classification mismatch (lockstep failure)

Expected: same-day update both sides.
Common failure: originator classifies NPA; partner sees Standard for days; audit issue.

49. DLG cap approached / breached

Expected: alerts at 4%, 4.5%; breach prevented.
Common failure: silent breach; regulator-flag.

50. Buyback / substitution mid-cycle

Expected: per agreement; LMS supports the transition.
Common failure: data state inconsistent post-substitution.

GST / accounting

51. GST rate change mid-loan

Expected: apply prospectively; invoice versioned.
Common failure: retroactive application.

52. Multi-state operations (CGST+SGST vs IGST)

Expected: per invoice, per state of supply.
Common failure: wrong tax mode applied.

53. Backdated correction to a loan

Expected: adjustment journal with full audit trail.
Common failure: silent retroactive change.

Borrower data

54. Borrower’s primary mobile changes mid-loan

Expected: borrower updates; verified; old mobile retained for audit.
Common failure: communication fails; borrower unreachable.

55. Borrower’s primary bank account changes

Expected: new account verified; new NACH mandate; old marked inactive.
Common failure: NACH continues to old account; bounces.

56. Borrower deceased

Expected: special handling; recovery against estate per applicable succession.
Common failure: standard collection process inappropriate.

Bureau / reporting

57. CIC rejects monthly file

Expected: error file parsed; rejected rows fixed; re-submission.
Common failure: rejection not acted on; subsequent month builds on bad data.

58. RBI return discrepancy with management accounts

Expected: investigated; usually classification / cut-off issue.
Common failure: explained away; recurring.

Vendor / integration

59. Vendor API breaking change

Expected: monitoring detects; alternate vendor active; fix vendor adapter.
Common failure: silent failures; build-up.

Expected: vendor adapter updated; reconciliation continues.
Common failure: reconciliation breaks; exceptions pile up.

What the platform must enforce

For each edge case:

Detection — automated where possible.
Triage — clear queue + ownership.
SLA — within-time resolution.
Audit trail — every action documented.
Postmortem — recurring edge cases drive policy / system changes.

How to use this catalogue

Pre-launch: ensure platform handles each case correctly.
Operational discipline: ops team aware of patterns.
QA: test cases cover each edge.
Documentation: each module’s docs reference the relevant cases.
Training: ops / credit / collections staff trained on edge handling.

Every other page in §18 — these edge cases are the “what the system handles” reference for the conventions and algorithms described elsewhere.
11. Risk register — operational risks.
13. Implementation backlog — edge cases inform user-story / test-case design.