Executive Summary
India’s credit landscape is undergoing a seismic shift. With the rise of digital lending, the Reserve Bank of India’s (RBI) tighter guidelines on risk management, and increasing consumer expectations for faster credit decisions, lenders are under intense pressure to modernize their credit processes.
The Agentic Credit Decisioning Engine from Newgen addresses this exact challenge delivering instant, explainable, and audit-ready decisions that align with India’s regulatory framework, while enabling scalability and personalization.
1. The Indian Credit Ecosystem: Drivers of Change
India’s credit market is one of the fastest growing in the world:
- Retail Credit Growth: Retail loans in India are growing at ~20% YoY (RBI, FY 2023-24), fueled by digital channels.
- SME Credit Gap: Over $330 billion in unmet SME credit demand (IFC study).
- Fintech & Digital NBFC Surge: The number of digital lending apps (DLAs) surged post-COVID, with over 600 operational, many under scrutiny for compliance.
- Regulatory Tightening: RBI’s Digital Lending Guidelines (2022) mandate:
- Transparent decisioning
- Storage of decision data for audit
- Explicit consent management
- Disallowing unregulated data sharing
These shifts demand an intelligent decisioning framework that is fast, fair, explainable, and compliant.
2. What is Agentic Credit Decisioning?
In Newgen’s context, Agentic Credit Decisioning combines AI-driven intelligence with autonomous orchestration, where the engine:
- Understands context (customer profile, risk indicators, regulatory boundaries)
- Decides based on policies, predictive scoring, and external data
- Explains decisions to customers and regulators
- Learns from outcomes to improve future decisions
This isn’t just automation it’s self-directed decisioning with accountability.
3. Why India Needs It Now
3.1. Regulatory Pressures
- RBI mandates transparent algorithms and auditable processes
- Lending institutions must explain credit rejections to customers
- Risk models need periodic validation
3.2. Competitive Urgency
- Public sector banks are modernizing (e.g., SBI’s YONO, PNB’s digital lending push)
- Private banks and fintechs are setting sub-minute approval benchmarks
- Digital-first NBFCs like Bajaj Finance, Tata Capital are redefining customer experience
3.3. Risk Management
- Rising delinquencies in unsecured personal loans (RBI March 2024 report: 90+ DPD ratio up by 45 bps YoY)
- Fraud risk via identity theft and synthetic identities
- Over-leveraging of borrowers due to multiple overlapping loans
4. Newgen’s Agentic Credit Decisioning Engine for India
4.1. Core Capabilities
- Real-Time Data Integration: Pulls CIBIL, CRIF High Mark, Experian scores instantly; integrates with CKYC, Aadhaar, GSTN, IT returns.
- Policy-Driven Decisioning: Applies RBI-compliant credit policies with customizable thresholds.
- Explainable AI (XAI): Every decision, approval or rejection comes with an audit trail and human-readable explanation.
- Regulatory Audit Mode: One-click extraction of decision history for RBI/NHB audits.
- Consent & Data Privacy: Built-in consent flows and encrypted PII storage to comply with Digital Lending Guidelines and DPDP Act.
4.2. Agentic Workflow
- Ingestion: Application data via mobile, web, or branch intake
- Data Fetch & Enrichment: Credit bureau, fraud databases, income verification
- Risk Scoring: AI + policy-based scoring with explainability
- Decisioning: Approve, reject, or refer in under 30 seconds
- Action Orchestration: Trigger disbursement or further underwriting
- Learning Loop: Model retrains based on repayment behavior
5. Key Differentiators for Indian Lenders
- Sub-30 Second Decisioning: Competitive edge for retail and SME loans
- No-Code Policy Updates: Credit managers can tweak rules without IT
- RegTech Integration: Prebuilt connectors for RBI-compliant reporting
- Multi-Lingual Interfaces: Supports regional languages for inclusivity
- Agentic Governance: Combines human oversight with autonomous execution
6. Industry Use Cases in India
6.1. Retail Personal Loans
- Challenge: High volume, low-ticket loans need rapid approvals without increasing NPAs
- Solution: Instant scoring from CIBIL + alternate data (mobile bill payment history, UPI transactions)
- Impact: 40% reduction in manual underwriting; NPA rate lowered by 18%
6.2. SME Lending
- Challenge: Limited formal credit history for MSMEs
- Solution: Integrates GSTN filings, bank statement analysis, UPI merchant transactions
- Impact: Expanded approval coverage by 25% while maintaining risk control
6.3. Housing Finance
- Challenge: Complex documentation, fraud checks
- Solution: Automated OCR of KYC documents, property registry cross-checks
- Impact: Reduced average TAT from 7 days to 48 hours
7. Industry Data & Insights
- Digital Lending Surge: RBI report notes a 12x increase in disbursements via digital modes from FY 2017 to FY 2022.
- Customer Expectation: 75% of Indian borrowers expect instant credit decisions (PwC India survey).
- Risk Gap: 60% of defaults in unsecured lending were preventable with better early warning systems (TransUnion CIBIL, 2023).
8. Compliance & Governance Alignment
Newgen’s engine is built to align with:
- RBI’s Digital Lending Guidelines (2022)
- Master Directions – NBFCs – Housing Finance
- DPDP Act (2023)
- Fair Practices Code
Audit-readiness is embedded no scrambling before inspections.
9. The Strategic Advantage for Indian Lenders
Adopting Newgen’s Agentic Credit Decisioning Engine helps:
- Accelerate Market Share Growth: Win over digital-native customers
- Enhance Trust: Transparent, explainable decisions boost customer confidence
- Reduce Operational Costs: Minimize manual underwriting and document handling
- Mitigate Risk: Early detection of fraud and over-leveraging
In India’s fast-evolving lending landscape, the winners will be those who combine speed, intelligence, and compliance. Newgen’s Agentic Credit Decisioning Engine offers exactly that enabling instant, explainable, and audit-ready credit decisions tailored to Indian realities.
By marrying agentic AI capabilities with deep regulatory compliance and localized integrations, Newgen is helping Indian lenders shift from reactive credit risk management to proactive, intelligent lending.
Call to Action:
Discover how Newgen can help your bank or NBFC deliver faster, fairer, and more compliant credit decisions. Visit https://newgensoft.com/in/solutions/industries/financial-institutions/ai-agents-credit-decisioning-engine/ or contact our India sales team.
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