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Part 10 — System Blueprint

Nonfunctionals & Regulatory Constraints

Nonfunctional requirements for an SME lending platform are regulatory controls with engineering acceptance tests. The rules below are verified as of July 2026 and are written for a bank/NBFC/HFC/AIFI-style regulated entity (RE) using branches, digital lending apps (DLAs), lending service providers (LSPs), DSAs, co-lending partners and outsourced technology services.

Requirement idAreaRegulatory sourceSystem requirementAcceptance test
NFR-DR-001Digital lending data residencyRBI Digital Lending Directions, para 13 requires all borrower data to be stored only on servers located in India, and if processed outside India it must be deleted offshore and brought back to India within 24 hours (RBI Digital Lending Directions, 2025).Production databases, object storage, logs, analytics, search indexes, backups and support exports containing borrower data must reside in India regions. Any offshore processing must be approved, logged and auto-deleted within 24 hours.Data-flow inventory proves no borrower data at rest outside India; DLP scan of logging/analytics vendors finds no PAN, Aadhaar, bank account, bureau, GST, ITR, AA or KYC payload outside India.
NFR-DR-002LSP data minimisationDigital Lending Directions allow LSPs to store only basic minimal borrower data needed for operations and place ongoing privacy/security responsibility on the RE.Partner APIs and LSP portals expose only scoped fields: name, contact, coarse application status, next action, assigned cases and payment link where authorised. No raw bureau report, CAM, RCU note, AA transactions, ITR payload or KYC document is exposed unless a signed data-sharing scope explicitly permits it.Contract test calls partner APIs with broad scopes and verifies denial; UI masking tests show bureau/AA/tax data unavailable to partner_api_client and dsa_user.
NFR-DR-003CIC data localisation for specified usersRBI CIC Directions require specified users processing credit information to process/store it in India and retain credit information only for six months or until purpose is satisfied, whichever is earlier (RBI CIC Directions, 2025 public mirror).Bureau/CIC data passed to any specified-user-style vendor or analytics service must remain in India and have purpose-bound TTL.Bureau payload retention job deletes vendor-working copies by TTL; audit can prove the deletion timestamp.
NFR-RT-001KYC record retentionRBI KYC Master Direction requires preservation of customer account information and identification/address records for at least five years after business relationship ends; transaction records must also be preserved for at least five years from transaction date (RBI KYC Master Direction, 2016).kyc_profile, beneficial_owner, screening_hit, document_instance, consent evidence and transaction audit records cannot be hard-deleted before retention expiry.Deletion API refuses active/retention-locked party records; retention report shows expiry date per party and loan.
NFR-RT-002KFS and loan evidence retentionKFS circular makes KFS legally significant borrower disclosure; Digital Lending Directions require digitally signed documents to flow to borrower.kfs_version, APR computation, amortisation schedule, borrower acknowledgement, sanction letter and executed loan documents are immutable and retained with sha256_hash.Regenerate a closed loan evidence pack from stored versions without recomputing APR from current product rules.
NFR-RT-003Consent lifecycleDigital Lending Directions require borrowers to give/deny consent for specific data, restrict disclosure, revoke consent and request deletion/forgetting where applicable.consent_artifact stores purpose, scope, text version, captured channel, evidence, expiry and revocation. Revocation blocks future fetch/sharing but preserves regulated records needed for audit, KYC, servicing, legal and reporting.API call with revoked consent returns consent_required; audit event consent_revoked exists; existing booked-loan evidence remains available to compliance.
NFR-AU-001Immutable auditabilityDigital Lending, KYC, KFS, IRAC, co-lending and outsourcing controls all require reproducible evidence of decisions, consent, disclosures, fund flow and classification.Every material state transition writes audit_event with actor, role, subject, before/after hash, evidence URI, timestamp, reason and approval reference.Random sample of loan_booked, kfs_accepted, npa_classified, dlg_invoked, role_granted and settlement_approved events reconstructs full maker-checker chain.
NFR-AU-002IRAC/date-true classificationRBI IRAC clarification requires day-end objective classification and NPA upgradation only after arrears are cleared.loan_account.current_dpd and asset_classification are computed from due/receipt ledgers; manual override needs approval and audit. Collections cannot edit DPD.Attempt by collections_agent to edit DPD fails; NPA upgrade test succeeds only after all principal and interest arrears across linked facilities are cleared.
NFR-AU-003Co-lending audit and partner syncCo-Lending Directions require partner shares in books within 15 calendar days, separate borrower accounts per RE share, escrow routing, audit scope and next-working-day asset classification sharing (RBI Co-Lending Directions, 2025).partner_share, escrow_movement, partner_ledger and partner_status_event must reconcile daily. SMA/NPA event must be delivered to partner no later than next working day.Simulated npa_classified event creates partner webhook and ack; missing ack breaches SLA; share-not-booked after 15 days creates reconciliation break.
NFR-SEC-001IT governanceRBI IT Governance, Risk, Controls and Assurance Practices Directions, 2023 apply to commercial banks, NBFC Upper/Middle/Top Layer, CICs and AIFIs from April 1, 2024 and require Board/management oversight, IT risk, information security, assurance, IS audit and business continuity practices (RBI IT Governance Directions, 2023).Maintain IT asset inventory, data classification, risk register, access reviews, IS audit evidence, BCP/DR plans, cyber incident process and control testing for LOS, LMS, BRE, DMS, partner gateway and payments.Quarterly access review and annual IS audit produce evidence; critical systems have documented RTO/RPO and tested restoration logs.
NFR-SEC-002IT outsourcingRBI Outsourcing of IT Services Directions say outsourcing must not diminish RE obligations or impede RBI supervision and require governance, due diligence, risk management, audit/access rights, cross-border controls and exit strategy (RBI IT Outsourcing Directions, 2023).SaaS LOS/LMS/BRE, cloud, document vault, analytics, SMS/email, payment gateway and security operations vendors require contract metadata: audit rights, data location, sub-outsourcing, incident SLA, exit plan and access controls.Vendor cannot be marked active without due diligence checklist; exit test exports data and documents in usable format.
NFR-SEC-003API securityDigital Lending Directions require technology/cyber standards compliance for RE and LSP DLAs; IT directions require access controls and information security.Partner APIs require mTLS or OAuth2 client credentials/signed JWT, HMAC request signing, idempotency keys, IP allowlist, request replay protection and least-privilege scopes.Replay with old timestamp fails; partner cannot access another partner’s application; all write APIs require idempotency.
NFR-SEC-004Sensitive data protectionKYC/Digital Lending rules restrict biometric/full Aadhaar storage and require need-based collection.Store aadhaar_last4 only; never store full Aadhaar or biometric data unless statutory basis is configured and approved. Encrypt PAN, bank account, bureau, GST, ITR, AA and document payloads at rest; mask in UI by role.Static scan and database policy check show no full Aadhaar column; role tests show masked PAN/bank account for non-need-to-know users.
NFR-AV-001Availability for borrower servicingDigital lending and grievance rules require borrower access to documents, complaint channel, grievance officer and loan information.Customer portal/DLA must expose KFS, sanction, repayment schedule, statements, payment status, complaint filing and grievance contacts even if partner channel is down.Partner outage drill proves borrower can still access RE portal and repay directly to RE account.
NFR-AV-002Business continuity for CLACo-Lending Directions require BCP to ensure uninterrupted service to borrowers if CLA terminates.CLA termination cannot break repayment, statement, complaint, NOC, settlement, DPD and CIC reporting services.Disable partner API in test; LMS continues demands/receipts and borrower portal still works.
NFR-AV-003Payment and ledger recoveryDirect fund-flow rules and accounting controls require payment certainty and reconciliation.Payments, receipts, mandates, escrow movements and GL postings must be recoverable from idempotent events. No payment callback may create duplicate loan_transaction.Replay payment callback with same idempotency key returns original result; day-end reconciliation detects missing bank references.
NFR-REP-001CIC reporting timelinessRBI CIC framework requires regular credit information updates; as of July 2026 the scheduler must support fortnightly cycles and entity-specific granular schedules where applicable.Reporting calendar is configuration by RE type, CIC and segment. Rejected CIC records create correction tasks.Generate files for 15th/last-day cycle and 9th/16th/23rd/last-day cycle in test tenant; both pass schema validation.
NFR-REP-002DLA reportingDigital Lending Directions require REs to report DLAs deployed/joined on CIMS, update additions/cessations and certify compliance.DLA inventory stores owner, app/website links, LSP, grievance officer, privacy policy, RE website link, certification status and CIMS ack.New api_client/DLA cannot go live until DLA inventory and compliance certification fields are complete.
ClassExamplesStorageAccess
restricted_identityPAN, Aadhaar last four, CKYC id, DOB, mobile, email, addressIndia only; encrypted at rest; field-level maskingKYC, compliance, credit need-to-know, audit read-only
restricted_financialBureau report, AA transactions, GST, ITR, bank statements, income variablesIndia only; encrypted; purpose TTL for vendor copiesCredit, risk, compliance, audit; partner only by explicit consent scope
regulated_loan_recordloan_account, repayment_due, loan_transaction, asset_classification, kfs_versionIndia production and DR; immutable event logLMS, finance, servicing, collections read/write by role
legal_security_recordcollateral_asset, security_charge, CERSAI, NeSL, title, valuation, insuranceIndia only; document vault hashLegal, ops, credit, audit
partner_operationalPartner refs, webhook logs, partner_share, escrow_movement, partner_status_eventIndia only; signed event logPartner ops, finance, risk, scoped partner API
public_or_lowProduct master, branch list, public grievance contactsIndia preferred; CDN allowed if no borrower dataBroad internal/public where approved
RecordMinimum retention ruleDeletion behavior
KYC/CDD records and identification/address evidenceAt least 5 years after business relationship ends under KYC Master DirectionRetention lock until expiry; legal hold overrides expiry.
Loan transaction recordsAt least 5 years from transaction date under KYC record-management principles and longer as accounting/legal policy requiresNo hard delete while account active, disputed, litigated or under audit.
KFS, sanction, executed loan documentsRetain for loan life plus legal limitation/audit policy; never less than KYC/transaction minimum where tied to accountImmutable document versions; superseded versions remain.
Bureau/CIC raw reportsRetain only for permitted credit/regulatory purpose; vendor copies follow purpose TTLMasked UI, encrypted archive, delete working copies.
AA/GST/ITR raw payloadsRetain according to consent/data-life and regulated evidence policyStop future fetch on revocation; retain evidence used for decision if legally required.
Audit eventsRetain for loan life plus audit/legal policyAppend-only; corrections are compensating events.
Payment, escrow and GL recordsRetain per accounting, tax, AML and audit policyNo deletion before reconciliation and statutory retention.
DLA/CIMS reports and certificationsRetain while DLA/partner active plus regulatory audit periodKeep ceased DLA evidence and CIMS ack.
SystemTargetRationale
LMS core, repayment, DPD batch99.9% monthly; RPO 15 minutes; RTO 2 hoursDues, receipts, DPD, CIC and collections depend on date-true ledger.
Payment/escrow reconciliation99.9% during banking windows; day-end completion mandatoryDirect fund-flow and GL controls.
Customer portal/DLA core servicing99.5% monthly; graceful degradation for read-only docsBorrower disclosures, complaints and repayment access.
Partner API gateway99.5% monthly for active programsCo-lending share sync and partner-originated applications.
Document vault99.9% monthly; RPO 15 minutesKFS, executed documents, security and audit evidence.
BRE/LOS origination99.5% business-hours targetOrigination TAT; failure can pause data_pending or prescreen_pending.
Collections platform99.5% business-hours targetRecovery conduct, PTP and allocation evidence.
ControlRequirement
AuthenticationWorkforce users use SSO/MFA; partner_api_client uses mTLS/OAuth2/signed requests; service accounts are non-human and scoped.
AuthorisationRBAC plus attribute guards from actors permissions; branch, partner, vendor, application, loan and case scopes enforced server-side.
Maker-checkerRequired for KYC approval, disbursement, bank account change, waiver, settlement, write-off, collateral release, DPD override and privileged access.
EncryptionTLS 1.2+ in transit; AES-256 or equivalent for object/database encryption; per-tenant or per-domain keys for high-sensitivity payloads.
SecretsNo secrets in code, logs or partner payloads; rotate API keys/certificates; store in approved secrets manager.
LoggingStructured logs with request id and actor; no raw bureau, AA, ITR, GST, Aadhaar, bank account or document payload in application logs.
MonitoringAlert on failed disbursement, duplicate payment callback, DPD batch failure, CIC reject spike, partner webhook failure, privilege grant, mass export and after-hours admin action.
Vulnerability managementPatch critical vulnerabilities by severity SLA; run VA/PT and dependency scanning; track exceptions with expiry.
Incident responseSecurity incident workflow records detection, containment, borrower/regulator impact, evidence, remediation and board/compliance notification.
DR testingRestore database, document vault and event log in DR drill at least annually and after major architecture change.
TestExpected result
Create offshore log sink containing PANDeployment blocked or DLP alert fails release gate.
Delete active kyc_profileRejected with retention-lock reason.
Partner API asks for raw AA transactionsRejected unless data_sharing_partner scope explicitly includes that field and policy permits it.
DPD batch failsIncident opens; CIC file generation blocked; collections consumes last successful snapshot with stale-data warning.
Same disbursement callback replayedNo duplicate loan_transaction; previous result returned by idempotency key.
User self-grants credit_managerRejected; privileged access requires independent approval and expiry.
Co-lending partner endpoint downpartner_status_event retries; borrower servicing remains available through RE portal.