18.1 LOS overview and state machine

LOS scope

The Loan Origination System covers the end-to-end journey from lead to disbursed loan. After disbursement, the loan moves to the LMS (18.3).

LOS responsibilities:

Lead acquisition and channel attribution.
Application capture with all data.
KYC / KYB completion.
Data ingestion (bureau, GST, BSA, AA, MCA, Tally).
Underwriting decisioning — rule + scorecard engine.
Manual review workflow for refer cases.
Deviation approval workflow.
Sanction issuance.
Document generation (KFS, agreement, DPN, PG).
eSign + eStamp orchestration.
NACH / eNACH mandate activation.
Pre-disbursement checklist enforcement.
Disbursement execution.
Handoff to LMS.

States

The application’s primary states:

LEAD                       — captured but not converted
DRAFT                      — application started, not submitted
SUBMITTED                  — borrower submitted
KYC_IN_PROGRESS            — KYC workflows running
INGESTION_IN_PROGRESS      — data ingestion running
UNDER_REVIEW               — decisioning + manual review
APPROVED                   — decision approved
DEVIATION_PENDING          — awaiting deviation approval
DECLINED                   — decision declined
REFERRED_TO_COMMITTEE      — escalated to credit committee
WITHDRAWN                  — borrower withdrew
EXPIRED                    — sanction validity lapsed without disbursement
OFFER_ACCEPTED             — borrower accepted offer
DOCS_GENERATED             — documents created
ESIGN_IN_PROGRESS          — multi-signer eSign running
DOCS_EXECUTED              — all docs signed and stamped
MANDATE_ACTIVE             — NACH / eNACH active
DISBURSED                  — funds released, UTR captured
HANDED_OFF_TO_LMS          — terminal LOS state

State machine diagram

LEAD ──qualify──→ DRAFT
DRAFT ──save──→ DRAFT (loop)
DRAFT ──submit──→ SUBMITTED

SUBMITTED ──auto──→ KYC_IN_PROGRESS
KYC_IN_PROGRESS ──auto──→ INGESTION_IN_PROGRESS  (parallel with KYC)
KYC_IN_PROGRESS + INGESTION_IN_PROGRESS ──all-complete──→ UNDER_REVIEW

UNDER_REVIEW ──engine APPROVE──→ APPROVED
UNDER_REVIEW ──engine DECLINE──→ DECLINED
UNDER_REVIEW ──engine REFER + analyst recommend approve──→ APPROVED
UNDER_REVIEW ──engine REFER + analyst decline──→ DECLINED
UNDER_REVIEW ──engine REFER + analyst recommend deviation──→ DEVIATION_PENDING

DEVIATION_PENDING ──approved──→ APPROVED
DEVIATION_PENDING ──declined──→ DECLINED
DEVIATION_PENDING ──escalated──→ REFERRED_TO_COMMITTEE

REFERRED_TO_COMMITTEE ──approved──→ APPROVED
REFERRED_TO_COMMITTEE ──declined──→ DECLINED

APPROVED ──borrower accept──→ OFFER_ACCEPTED
APPROVED ──validity lapse──→ EXPIRED

OFFER_ACCEPTED ──auto──→ DOCS_GENERATED
DOCS_GENERATED ──borrower sign──→ ESIGN_IN_PROGRESS
ESIGN_IN_PROGRESS ──all signers complete──→ DOCS_EXECUTED
DOCS_EXECUTED ──auto──→ MANDATE_ACTIVE  (requires NACH ack)

MANDATE_ACTIVE ──pre-disb checklist + execute──→ DISBURSED
DISBURSED ──auto──→ HANDED_OFF_TO_LMS

[any state] ──borrower withdraw──→ WITHDRAWN

Triggering events (the verbs that move state)

Event	From → To	Source
`lead.qualified`	LEAD → DRAFT (implicit on app creation)	Sales / pre-app
`application.section_saved`	DRAFT loop	Borrower
`application.submitted`	DRAFT → SUBMITTED	Borrower
`kyc.individual.completed` (per promoter)	KYC_IN_PROGRESS condition	KYC module
`kyb.entity.completed`	KYC_IN_PROGRESS condition	KYC module
`data.bank_statement.parsed`	INGESTION condition	Ingestion
`data.gst.pulled`	INGESTION condition	Ingestion
`data.bureau.pulled`	INGESTION condition	Ingestion
`decision.run.completed`	UNDER_REVIEW state update	Decision engine
`decision.approved`	UNDER_REVIEW → APPROVED	Engine / manual
`decision.declined`	UNDER_REVIEW → DECLINED	Engine / manual
`decision.referred`	UNDER_REVIEW remains	Engine
`deviation.approved`	DEVIATION_PENDING → APPROVED	Approver
`deviation.declined`	DEVIATION_PENDING → DECLINED	Approver
`offer.accepted`	APPROVED → OFFER_ACCEPTED	Borrower
`sanction.issued`	(concurrent with OFFER_ACCEPTED)	LOS
`document.generated`	OFFER_ACCEPTED → DOCS_GENERATED	Documentation
`kfs.acknowledged`	(pre-condition for eSign on agreement)	Borrower
`esign.completed` (per signer)	ESIGN_IN_PROGRESS state update	eSign vendor
`esign.all_completed`	ESIGN_IN_PROGRESS → DOCS_EXECUTED	LOS
`mandate.active`	(concurrent with DOCS_EXECUTED)	NACH adapter
`disbursement.executed + utr.captured`	MANDATE_ACTIVE → DISBURSED	Disbursement
`loan.activated`	DISBURSED → HANDED_OFF_TO_LMS	LMS
`application.withdrawn`	* → WITHDRAWN	Borrower
`sanction.expired`	APPROVED / OFFER_ACCEPTED → EXPIRED	Auto-scheduler

Side effects per transition (selected)

SUBMITTED

KYC orchestration kicked off.
Ingestion orchestration kicked off.
Sales channel attribution finalised.
Lead converted (lead.status = converted).

KYC_IN_PROGRESS → UNDER_REVIEW

All promoter KYC complete.
KYB entity verification complete.
Sanctions screening complete.
BO graph complete.
Decision engine invoked.

APPROVED

sanction row created (LMS-readable).
Offer expiry timer set (typically 15 – 30 days).
Borrower notified (SMS + WhatsApp + email).
KFS preview generated (not yet acknowledged).

OFFER_ACCEPTED

Documentation orchestration kicked off.
KFS finalised.
Agreement, DPN, PG templates rendered.

DOCS_EXECUTED

All documents in DMS.
Evidence package partially assembled.
Mandate activation awaited.

MANDATE_ACTIVE

NACH activation confirmed by sponsor bank.
Pre-disbursement checklist becomes accessible to ops.

DISBURSED

loan_account row created (in LMS).
LMS schedule generated.
LMS daily accrual begins.
Borrower notified with UTR.
Channel partner notified.
Co-lending partner notified (if applicable).
Insurance triggered (if bundled).

Concurrency

Multiple transitions can be in progress simultaneously:

KYC for Director 1 and Director 2 run in parallel.
KYC and Ingestion run in parallel.
eSign signers can act in parallel (per agreement design).
Document generation and mandate activation can run in parallel.

The LOS state machine uses a workflow engine (5.5) to manage these parallel paths and the rendezvous (e.g., “all KYC complete and all ingestion complete = move to UNDER_REVIEW”).

Failure handling

KYC failure

One promoter’s KYC fails → workflow waits for re-attempt.
Multiple failures → REFER to manual.
Permanent failure → DECLINE.

Ingestion failure

AA fetch fails → fallback to PDF upload.
GST OTP fails → reschedule.
Bureau no-hit → REFER if borrower has no bureau record at all.

Decision engine timeout

Engine returns error or timeout → REFER.

Deviation expiry

Deviation pending for too long → escalate or auto-decline.

eSign failure

Single signer fail → switch vendor or paper.
Repeated failures → manual handling.

Mandate failure

NACH rejection by sponsor bank → re-register with corrected details.

Disbursement failure

Payout rail rejection → re-attempt or escalate.
Returned funds → reverse and re-attempt.

SLA expectations

Transition	Target time
SUBMITTED → APPROVED (auto path)	`< 6 hours` typical for standard A-grade
SUBMITTED → APPROVED (manual review)	`< 5 days` p95
APPROVED → OFFER_ACCEPTED	Borrower-dependent (typically `1 – 7 days`)
OFFER_ACCEPTED → DOCS_GENERATED	`< 30 minutes`
DOCS_GENERATED → DOCS_EXECUTED	Borrower-dependent (typically `4 – 24 hours` for eSign multi-signer)
DOCS_EXECUTED → MANDATE_ACTIVE	`< 6 hours` (depends on sponsor bank NACH cycle)
MANDATE_ACTIVE → DISBURSED	`< 1 hour` after checklist clearance
DISBURSED → HANDED_OFF_TO_LMS	`< 5 minutes` (automated)

Audit per transition

Every state transition emits an audit.event:

Actor (user / service).
From state, to state.
Reason / event reference.
Timestamp.
IP, device (where user-driven).

Audit chain (5.13) makes tampering detectable.

Idempotency at state transitions

Every state-changing API call is idempotency-keyed:

Re-submission of application.submit after first success returns the same state, no double-processing.
offer.accept similarly.
disbursement.execute critically — duplicate calls do not double-disburse.

What the platform must enforce

No skip states — transitions follow the diagram; jumping is not permitted.
No state without event — every state change is event-driven and audited.
All pre-conditions (e.g., KYC complete + ingestion complete + decision approved) must be satisfied before downstream state.
Concurrent paths properly synchronised via workflow engine.
Failure paths explicit; no silent state hangs.