In this guide 6 sections
An approval trail is one record per decision. It names who asked, who approved, the date, the papers they relied on and the reason. Use the same fields for a sanction, a penalty waiver and a write off. Then software can enforce the order and keep the history.
What an auditor wants to see on one line
Ask any auditor what hurts. It is a waiver with no name against it. Or a write off approved verbally by a manager who has since left the company. The amount is rarely the issue.
The missing story is. A good record answers six questions on a single line: who asked, who approved, when, for which loan account, on what papers and why. One blank answer sinks the whole entry. It cannot be defended.
Think of the record as a letter to a stranger. A new auditor, a successor or a regulator will read it years later without you in the room. Every line must make sense to someone who never met the borrower.
The fields every approval record carries
Use one template for sanctions, waivers and write offs so staff learn it once. The loan officer fills the request block. The approver fills the decision block. Never the same person.
Keep reasons in a short fixed list plus one free-text line. A fixed list lets you count later how often hardship, dispute or the death of a borrower led to a waiver, which tells you where policy needs work.
- Loan account number and borrower name
- Type: sanction, penalty waiver or write off
- Amount requested and amount approved
- Requested by, date and reason code
- Approved or rejected by, date and remark
- Papers attached, listed by name
Sanctions: limits, conditions and the papers behind them
A sanction records the amount, the tenure, the rate, the security and every condition to be met before disbursal. Conditions are where files go quiet. Name the officer responsible and a deadline against each.
Match the approver to the amount. A branch manager signs up to one limit, a regional head signs to the next and a credit committee decides above that. Write those limits on the template itself, so nobody has to guess who may sign.
Record changes to a sanction as new lines, never overwrites. If the amount rises after a review, the old figure and the new one both stay visible with their approvers. History is the point of the exercise.
Waivers and write offs need a harder second look
A penalty waiver forgives what the borrower owes. A write off removes the balance from the book while the claim may still live. Both cost the lender, so the approver should not be the officer who handles the account.
Attach the evidence: collection notes, the legal notice, the field visit report, a death certificate or a police complaint where relevant. For a write off, record the recovery plan that follows, even when it reads: pursue by notice each year.
Review waivers monthly. One recovery officer asking for many is a pattern. Raise it with the branch head.
- Collection notes and visit reports
- Legal notice and its reply
- Borrower’s written request or hardship letter
- Recovery plan after a write off
Moving the template into software without losing the rules
Software can enforce what paper only suggests. It can block an approver from clearing their own request, route a large amount to the next level and lock a record once approved. It stamps the time itself. Nobody can edit it.
Before you build, run the template on paper for one month and count how many records come back with a field blank. Those blanks show which fields must become mandatory in the system, and you can hand that list straight to whoever configures the workflow.
Approval trail record
A single form with three blocks. The Request block holds account number, borrower, decision type, amount requested, reason code and requester. The Evidence block lists attached papers with a tick for each. The Decision block holds approver, approver level, date, amount approved, remark and a line for the next step. A strip along the bottom lists approver limits by role, so the form explains itself.
Open a blank worksheet to printQuestions owners ask
Who should approve a penalty waiver?
Someone senior to the officer who asked, and not involved in collecting the account. Your policy sets the exact level. Print that level on the template.
Is a write off the same as forgiving the debt?
No. A write off clears the balance from the books for accounting, while the lender may still pursue recovery. The record should say which approach follows.
How long should approval records be kept?
For as long as your regulator, auditor or loan agreement requires. Ask your auditor for the period and store records where they cannot be edited.
Can approvals run over mobile chat?
Chat is quick but hard to audit. If it happens, paste the approver’s message into the record before close of business and note the minute it was sent. Software that routes approvals avoids the copying.