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AI Agent Profile · LendingIQ · Bengaluru
Hard Bucket Agent AI
Function: DPD 90+ Collections & Legal PrepOperating hours: 8 AM – 7 PM hardcodedRuntime: AWS Bedrock · ap-south-1Model: Claude Sonnet 4Context window: 200K tokens
DivisionCollections
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What this agent does
The Hard Bucket Agent AI prepares the materials required for DPD 90+ account resolution: legal notice drafts for counsel review, structured settlement option briefs within the Board-approved settlement framework, and complete agency hand-off files for accounts being transferred to recovery agencies. It operates at the intersection of the collections function, the legal function, and the NPA Strategy Officer's recovery decisions. Every document it prepares requires a human sign-off before any consequential action is taken — this agent prepares, humans decide and execute.
Primary functions
Legal Notice Preparation
DPD 90+ — counsel review required before dispatchInvoked when: NPA Strategy Officer authorises legal notice preparation for a specific account or account batch
- Reads the account's full CRM history — outstanding principal and interest, all prior contact and payment attempts, any settlement discussions, and the loan agreement terms — and populates the appropriate legal notice template from the counsel-approved library: demand notice under general law, Section 13(2) notice under SARFAESI for secured loans above the applicable threshold, or Arbitration notice per the loan agreement's dispute resolution clause.
- Produces a draft notice with all factual fields populated — borrower name and address as per KYC, outstanding amount as per CBS, notice date, response deadline, and the consequence language approved by legal counsel for that notice type. The draft is explicitly watermarked "DRAFT — LEGAL COUNSEL REVIEW REQUIRED" and is not dispatched from within this agent.
- Flags any factual inconsistencies in the draft that require resolution before dispatch: address discrepancies between the KYC record and the loan agreement, outstanding amount disputes that are open in the CRM, or accounts where a restructuring application is pending — because dispatching a legal notice while a restructuring negotiation is live creates both legal and regulatory complications.
- Does not practise law, interpret the enforceability of specific notice provisions, or advise on the litigation strategy. The draft populates facts into a counsel-approved template — the legal counsel who reviews the draft makes all substantive legal judgments about its content and enforceability.
Output: Legal notice draft — counsel-approved template populated with account-specific facts, flagged inconsistencies, "DRAFT — LEGAL COUNSEL REVIEW REQUIRED" watermark, and routing to the legal counsel review queue.
Settlement Options Brief
When borrower initiates settlement discussion or NPA Officer requests options analysisInvoked when: borrower indicates willingness to settle, or the NPA Strategy Officer requests a settlement options analysis for a specific account
- Reads the Board-approved settlement framework from the policy RAG — the permitted haircut bands by DPD vintage, outstanding amount band, and collateral coverage — and applies the framework to the specific account to produce a structured options brief: the minimum acceptable settlement amount at this DPD under the current policy, the recommended opening offer range, and the maximum allowable haircut that the NPA Officer can approve within delegated authority.
- Presents the options in a structured brief for the NPA Strategy Officer or the human negotiator: Option A (minimum haircut, full principal recovery with waiver of penal charges), Option B (partial principal haircut within policy band with full penal waiver), and Option C (maximum policy haircut with one-time settlement structure). Each option shows the cash recovery, the provisioning release, and the NPV of recovery versus continued litigation — the financial analysis the NPA Officer needs to select an approach.
- Does not negotiate with the borrower, make settlement offers, or approve any haircut. The settlement brief is an internal analysis document for the NPA Strategy Officer and the human negotiator. All borrower-facing settlement communication and all settlement approvals are human acts.
Output: Settlement options brief — framework-compliant option set (A/B/C) with cash recovery, provisioning release, and NPV analysis per option; maximum haircut within NPA Officer's delegated authority; recommended approach based on vintage and recovery probability; routed to NPA Strategy Officer for decision.
Agency Hand-Off Preparation
When NPA Officer decides to transfer account to recovery agencyInvoked when: NPA Strategy Officer authorises recovery agency assignment for an account
- Assembles the complete agency hand-off file: borrower identity and contact details (as per KYC — not any informal contacts), loan agreement summary (sanctioned amount, outstanding principal and interest, penal charges, security interest details), complete payment history since origination, CRM contact log summary, all prior recovery attempts and their outcomes, and the legal notice status (whether a Section 13(2) notice has been served and the response or absence thereof).
- Prepares the agency mandate document within the parameters authorised by the NPA Strategy Officer: the recovery target, the permitted contact methods (governed by RBI's recovery agent conduct guidelines — no third-party contact, no contact outside 8 AM–7 PM, no threatening behaviour), the reporting cadence required from the agency, and the escalation triggers that require the agency to refer back to LendingIQ rather than acting independently.
- Documents the agency assignment in the CRM and Audit Trail Agent AI — the date of assignment, the agency identity, the mandate scope, and the authorising officer. RBI's guidelines on recovery agents require that the engagement of an external recovery agent and the instructions given to them be documented and available for regulatory inspection.
Output: Agency hand-off file — complete account data package, agency mandate document, CRM assignment record, audit trail entry with authorising officer, and a briefing note for the agency on the account's history and the recovery approach authorised.
Hard guardrails
Will notDispatch a legal notice. Notices are drafted for counsel review and require the authorised officer's sign-off before dispatch. A legal notice sent without counsel review and proper authorisation is a legal liability, not a recovery tool.
Will notApprove a settlement. Settlement approvals require the NPA Strategy Officer's sign-off within their delegated authority or the Board Committee's approval above that threshold. The agent prepares the options analysis; the officer makes the call.
Will notMandate a recovery agency without NPA Strategy Officer authorisation. Agency mandates have regulatory and reputational implications — the conduct of an authorised recovery agency is attributed to LendingIQ under RBI's guidelines.
Will notPrepare notices or settlements for accounts where a SARFAESI notice is under active legal challenge without flagging the legal hold to the NPA Officer and legal counsel. Continuing recovery proceedings on a legally challenged account without counsel awareness creates litigation risk.
Known limitations
Legal notice drafting quality is bounded by the counsel-approved template library. Novel account situations — complex co-borrower arrangements, disputed loan transfers, cross-collateralisation structures — may not map cleanly to existing templates, and the agent will flag the template mismatch rather than improvise. A template gap requires counsel to draft a bespoke notice.Review the legal notice template library annually with legal counsel to ensure coverage of the full range of account structures in the current portfolio. Gaps in the template library delay NPA recovery actions — the review is a risk management priority, not a documentation exercise.
Settlement framework application is only as current as the Board-approved framework in the RAG. Informal changes to settlement authority or practice that have not been formally documented in the policy will not be reflected in the agent's options brief, creating a gap between the brief and the NPA Officer's actual mandate.Every change to the settlement authority framework — even informal delegation expansions — must be documented in the settlement policy and the RAG updated before the next settlement options brief is generated. Undocumented authority changes are governance gaps regardless of operational convenience.
Important Reads
Learn more about how to deploy Hard Bucket Agent AI to your lending workflow.
- Use case #0001Legal notice preparation: what Hard Bucket AI drafts before SARFAESI filingAn NPA account that has crossed DPD 90 has not simply missed payments — it has entered a legal regime with specific documentation requirements, mandatory notice periods, and statutory obligations that must be satisfied before the institution can exercise any secured creditor rights. The Hard Bucket Agent AI prepares every document in that pre-litigation sequence automatically: the Section 13(2) demand notice, the account statement, the property valuation update, and the compliance checklist — before the legal team opens the file.Read article →
- Use case #0002Settlement offer calibration: how Hard Bucket AI calculates the optimal waiverA one-time settlement offered too generously recovers less than the borrower would have paid under a restructured schedule. A settlement offered too conservatively is rejected — and the institution proceeds to SARFAESI, spending 18 months and significant legal costs to recover less than the settlement would have produced. The Hard Bucket Agent AI calculates the settlement range that maximises recovery while remaining within the borrower's demonstrated capacity to accept — and does so before the negotiation begins.Read article →
- Use case #0003Agency hand-off: the data package Hard Bucket AI sends to recovery agenciesThe institution is responsible for the conduct of every recovery agent acting on its behalf — whether directly employed or through an outsourced agency. An agency that engages in prohibited collections conduct creates regulatory liability for the institution, not just for the agency. The Hard Bucket Agent AI sends agencies a data package that is simultaneously complete enough to be effective and conduct-bound enough to be compliant — with every prohibited action explicitly stated and every permitted contact documented.Read article →