The Consent Template CT035, finalized by the Lending Use Case Council, sets the upper bounds for monitoring a borrower’s account for collection purposes, only in case of default on the part of the borrower.
Please note that this template does not include monitoring for the purpose of risk assessment, which is available under CT003. Lenders wanting to take consent for the purpose of monitoring loans irrespective of the default status, need to take a separate consent for monitoring, as given in CT003.
The following definition of Default has been concluded by the Council Members as below:
Installment/EMI/Payable amount remains due more than one day from the due date.
Technical Guardrails for Consent Template CT003 and CT035
| Technical Guardrail | Responsibility |
|---|---|
| FIU to provide disclosure (as a part of the purpose text) that monitoring consent will be activated only if the loan is disbursed and collection consent will be activated only if the loan is under default | FIU will implement the standardized Purpose text as per the CT003 and CT035 in their consent requests, and later this would be automated as a part of Sahamati’s Fair Use System |
| FIU to ensure, technically, that data against monitoring consent will get pulled only if a loan is active and collection consent will get pulled only if the payment under the loan (EMI) is overdue for more than a day. | FIU will be responsible for configuring their back-end systems to ensure this |
| At the end of the journey of a rejected/prepaid customer (purpose fulfilled), the customer shall compulsorily be provided an option to revoke monitoring consent and collection consent, as the purpose is no more valid. | FIU to present a redirection link to the AA page/app for the customer to revoke consent live (as a best practice) or through any other communication channel (in case of non-STP journeys) |
| To ensure that customers are informed about their data being accessed due to monitoring or collection consent, consumers should be regularly notified of data pulls and active consents. | AA to provide regular notifications to consumers via appropriate communication channels. Frequency to be discussed/decided with the AA Steering Group |
| Last published | 17th May 2024 |
Consent Template Information - CT035
| Consent Template Information | Description | Further Explanation |
|---|---|---|
| Consent Template ID | CT035 | For Sahamati's internal records and explanation to the community |
| Status | Active | For Sahamati's internal records and explanation to the community |
| Use Case Category | Account Monitoring | For Sahamati's internal records and explanation to the community |
| Use case | Monitoring a borrower’s account for collection purposes, only in case of default | Exclusive template only for collection purposes for lenders who want to do a more regular tracking of bank balances for borrowers who have defaulted. The FIUs will need to take a separate consent for collections |
Consent Template Attributes and Values - CT035
| Consent Details (Attributes) | Values | Rationale |
|---|---|---|
| Purpose Text (for customers) | As agreed by FIUs to show to the customer: To monitor a borrower’s accounts for (loan / credit card / credit line) collection, in case of overdue payments As per ReBIT: Explicit consent for monitoring of the accounts | To ensure that the purpose explains the underlying use case explicitly and is easy to understand for the customer. FIUs agreed that if the consent for loan monitoring is taken before the loan is sanctioned, the customer should explicitly be informed that this consent will be used for customers data fetch only if the customer has delayed the payment of EMIs by a day |
| Purpose Text (as per ReBIT) | Explicit consent for monitoring of the accounts | As per ReBIT |
| Purpose Code | 104 | In line with existing code of conduct PC001 - https://sahamati.org.in/aa-community-guidelines-v1-2/purpose-codes/ |
| Purpose Code Category Name | Account Query and Monitoring | As per ReBIT |
| FI Types | Deposit | Only deposit account data is required to make a enach presentation for EMI |
| Consent Types | Summary | Only balance in deposit account is required to make a enach presentation for EMI |
| Fetch-type | Periodic | |
| Maximum Frequency | 1 per day | Allows lenders to view the bank balance of the customer before making a enach presentation, the settlement for which happens only once a day The collections fetch has to be executed only after Installment/EMI/payable Amount due more than one day from the due date |
| Maximum FI Data Range | 1 day | Since it’s being pulled daily, incrementally only 1 day’s data is needed |
| Maximum Consent Validity | Coterminous with loan tenure | The FIU needs to ensure that the data is fetched only for the period of loan tenure. In case the loan tenure is not fixed at the time of taking collections consent from the customer, FIUs will show the maximum loan tenure values for that product or customer segment. The FIU will also clearly mention that the consent expiry data will be subject to the upper cap of the sanctioned loan tenure of the borrower. |
| Maximum Data Life | 1 Month | FIUs might want to keep track of the balances for at least a month to understand the patterns/history of customer |
| Last published on: | 17th May 2024 |
What should be the consent validity for short-term loans, under CT003 and CT035 templates
The Council has clarified that for short-term loans, i.e., loans for less than one year, the validity of consent shall not be more than 3 months beyond the tenure of the loan. The council has recommended this to enable lenders to continue monitoring a borrower’s account and optimise their collection strategies in case a borrower delays his/her repayment. Lenders that offer short-term loans, especially unsecured, are at higher risk of default and need flexible collection strategies because of the limited ageing of the particular loan account.
For instance, if the loan tenure is two months, the consent validity can be up to five months and not be coterminous with the loan tenure.
Please refer to Code of Conduct PC004 that elaborates on the need for separate consents for different purposes and illustrates the distinction in loan underwriting and loan monitoring purposes.
Please note that the parameters of the individual consent templates in the Consent Template Library represent upper bounds for the respective use cases, as decided in the relevant User Councils. The parameters in the consent templates should be treated by participant(s) as outer limit(s) and not be construed as legal advice in any manner. Participants are encouraged to review their use case(s) and ensure compliance with applicable laws, including the RBI Master Directions on NBFC-AA and the DPDP Act.
Sahamati will publish additional consent templates as the AA ecosystem evolves based on discussions in the relevant Use Case Councils and the Fair Use Committee. Existing consent templates may also be revised based on statutory and regulatory guidance, including the DPDP Act and the Rules issued thereunder.
