A mandate outage can break your month. Here’s how to prevent it.

Why putting all your collection eggs in one basket is riskier than you think

Here's a scenario that keeps NBFC CFOs up at night: You're managing 10,000 active loans with strong collection rates. Then your primary mandate partner hits a roadblock that may be a technical issue or regulatory scrutiny. Within hours, majority of your automated collections grind to a halt.

This isn't fear-mongering. It's the reality most Indian NBFCs face today.

The single point of failure problem

You’ve spent years digitising loan origination. Slick apps, instant approvals, seamless disbursals. But when it comes to collections? Most institutions are still running on a single mandate channel. Whether it's eNACH through a single sponsor bank or UPI Autopay as the only option, this concentration creates a vulnerability that's easy to overlook, until something goes wrong.

The DCB Bank situation showed us precisely what this looks like. When operational challenges arose, NBFCs that used DCB exclusively as their sponsor bank saw decline rates jump by 17.4% practically overnight. For a mid-sized lender with a ₹500 crore book, that meant an ₹87 crore collection gap in a single month.

The fallout? Immediate liquidity pressure. A 17.4% decline spike translates to roughly 15–20 additional days in the average collection cycle, basically, wiping out 1–2 months of usable runway for NBFCs operating on tight liquidity buffers.

NPA ratios climb as automated recovery stalls. And here's what often gets overlooked: your human collection agents suddenly find themselves buried under workload that was previously handled by automated mandates.

The uncomfortable truth? Industry estimates suggest that a significant majority of NBFCs depend on a single mandate type. This means the entire sector is vulnerable to channel-specific failures, whether due to technical glitches, issues with banking partners, or regulatory shifts targeting a single payment mode.

What smart diversification actually looks like

Building a multi-channel mandate strategy isn't about adding complexity; it's about achieving a more comprehensive approach. It's about matching the right collection method to each customer while building redundancy into your infrastructure.

Start with instant eNACH for your core portfolio.Quick authentication for the core portfolio covering 80% the collection volume, ideal for salaried customers.

Deploy UPI Autopay strategicall.A convenient option for small-ticket personal loans and consumer durable financing.

Layer in dunning automation as your safety net. When auto-debit fails, trigger payment links with TPV (Third Party Validation) enabled. TPV ensures repayments come only from pre-approved source accounts. Critical for home loans or high-value products where regulators scrutinize fund sources.

Build smart payment routing logic. Two consecutive mandate failures should automatically trigger an alternate channel or TPV-enabled payment link. No manual intervention required.

The trick is creating a customer choice framework without overwhelming borrowers. A salaried professional taking a ₹5 lakh personal loan should set eNACH as the default option. A rural LAP customer may initially see physical mandates, with digital options available for those who are comfortable with technology.

The numbers your CFO actually cares about

Diversification without measurement is just hope. Here's what to track:

Channel concentration: No single mandate type should comprise more than 60% of your portfolio. If one channel is handling 80% of collections, you've got concentration risk.

Sponsor bank distribution: Spread across multiple banking partners. The DCB incident taught us this lesson the hard way.

Failure mode analysis: Identify which collection methods are most effective for various customer segments and loan products. This data drives better mandate selection over time.

These aren't just operational metrics; rather, they present as risk indicators that rating agencies and lenders scrutinise when evaluating NBFC stability.

The path forward

NBFCs looking to reduce mandate-related disruptions are increasingly turning to payment infrastructure platforms that centralise access to multiple collection rails.

Payment infrastructure platforms, such as Decentro, offer plug-and-play connectivity to eNACH and UPI Autopay, allowing lenders to diversify their channels without managing separate vendors or integrations. 

As we close 2025, the question isn't whether to diversify your mandate strategy. It's whether you can afford not to.

The next collection crisis might target a different channel. However, NBFCs with resilient, multi-mode infrastructure will continue to collect payments while competitors scramble to find alternatives.