What: An option to “Lock” a credit arrangement, which would suspend the possibility of any disbursements on accounts assigned to a given credit arrangement. This should be possible either:
Automatically - triggered by any loan/ overdraft account under the credit arrangement being X days in arrears.
Manually - i.e whenever decided by a user (this option should be supported both from the UI, as well as via API). Only Users with a specific permission should be allowed to manually “Lock” a credit arrangement.
Once a Credit Arrangement is “Locked”:
- it should not be possible to make any disbursements on loan accounts under a credit arrangement or withdrawals on deposit overdraft accounts under a credit arrangement
- the state of the Credit Arrangement should change to “Locked”
- an Activity should be registered to capture the state of the credit arrangement
Credit Arrangement should be “Unlocked” either:
- If locked automatically: if there are no accounts fulfilling the X days in arrears locking conditions
- If locked manually by a User - there should be a separate permission to allow organisations to decide which users should be able to unlock disbursements under a credit arrangement (however, if a lock has been placed manually, it should only be possible to remove it manually)
Why: To temporarily prevent a customer from using their available existing credit limit in specific situations, mostly related to collections, e.g.:
- a customer is in a financial difficulty
- customer is “In arrears” with a small chance of recovering the current debt
In order to increase the exposure, and therefore the risk of not being able to recover the debt, organisations should be able to lock further disbursements.
The customer should be able to continue drawing from the limit once they recover from the situation and the block is lifted.