THIS IS A TEST INSTANCE. ALL YOUR CHANGES WILL BE LOST!!!!
Reduce risk of appraiser & customer collusion
Goals
- To provide deeper support for various collaterals & increase the adoption of the Collateral Module. This document lists down some of the features that can be added to the current collateral module.
Background and strategic fit
- Some of the collaterals typically used in the industry are:
- Equities
- Shares of cooperative banks by members: Loan is granted on the dividends from profits of bank, not the inherent value of the shares itself
- GST write offs, invoices & cash flows for MSMEs
- Gold
- Vehicles
- Real estate (both land & infra)
- Inventory of MSMEs
- Soft assets:
- Open source collateral modules are seeing limited adoption in the industry due to the minimal features supported. These modules typically have a definition of the collateral & an associated static collateral value. To increase the adoption, we must offer a deeper support for collaterals
- Summary of this document can be found here
Requirements
# | Title | User Story | Importance | Notes |
---|---|---|---|---|
1 | Insurance of collateral | As a loan administrator, I should be able to capture the details of the insurance taken for the collateral | Must have |
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2 | Markdown due to depreciation/damage of asset | As a loan administrator, I should be able to markdown asset due to damage identified during appraisal or depreciation through tenure | Must have | |
3 | Collateral Tracking | As a loan administrator, I should be able to capture any unique ID associated with the collateral | Must have |
|
4 | Tracking fair market value | As a loan administrator, I should be able to know the current value of collateral of loan | Good to have |
|
5 | Reduce appraiser & customer collusion | As a loan administrator, I should be able to create and document an audit process for collaterals | Must have |
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6 | Liquidity & price stability of collateral | As a loan administrator, I should be able to price in the risk due to liquidity/price stability of collateral | Good to have |
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Please refer to this document for further details of features & prioritisation.
Not Doing
- Loan top-ups are assumed to be handled separately outside the collateral module & are not covered here
- Facility to convert a secured loan into a secured loan (in loan take overs) are to be handled outside the collateral module
- Non-human centric approaches to appraisal such as algos/CV requiring significant effort are not taken up in this version
- Usage of poverty module to relax collateral & LTV thresholds is also not taken up here