Maker-Checker Workflows: Why Every NBFC Needs Dual Controls

A maker-checker workflow is simple: any action that could result in financial loss or compliance exposure requires two different staff members — one to initiate, one to approve. This is a foundational control in banking, but many small NBFCs still skip it.

Why it matters for disbursements: A branch manager who can both sanction and disburse a loan is a risk. Not because managers are dishonest, but because single-person controls create undetectable fraud. If the same person initiates and approves, you have no independent verification.

Why it matters for waivers: Penal interest waivers are the easiest place for a field agent to collude with a customer. Without a second approval requirement, a ₹5,000 waiver can be granted with no oversight. At 500 active loans, this adds up quickly.

Why it matters for write-offs: Writing off a loan without dual approval is a compliance failure. RBI examiners expect a defined process with documented approvals — not a unilateral decision by one staff member.

How to implement it: The maker initiates the action (e.g., disbursement request). The checker receives a notification and reviews the full context — application, collateral, amounts. The checker approves or rejects with a reason. Both actions are logged immutably.

What to avoid: Don't allow the same person to be both maker and checker for any transaction. Don't use WhatsApp approvals — they are not auditable. Don't create override permissions that bypass the workflow.

A proper lending platform enforces maker-checker at the system level — you cannot disburse without a checker approval, full stop. This protects your business, your staff, and your RBI standing.