HOW IT WORKS
How Billinate Works
Understanding the Billinate financial cycle
Billinate connects recurring bill payments with a structured workflow involving customer contributions, Fixed Deposits, bank-approved overdrafts and repayment coordination.
The financial cycle, step by step
Registration and onboarding
Customers register on Billinate and complete applicable identity verification, eligibility checks, disclosures and consent requirements.
Bill assessment
Eligible bill details are submitted or identified through approved integrations. Billinate calculates the proposed customer contribution and transaction requirements under the applicable programme rules.
Fixed Deposit creation
The required amount is placed in a Fixed Deposit through the participating bank. The FD is maintained under the bank's account and deposit conditions.
Overdraft assessment
The bank independently assesses the customer and determines whether an overdraft can be sanctioned against the eligible FD.
Bill payment
Once sanctioned, the approved OD amount can be used for the eligible bill-payment workflow through an authorised payment channel.
Financial tracking
Billinate tracks the corresponding bill, FD, OD principal, interest, contributions, repayments and collateral status using bank-confirmed information.
Repayment allocation
Eligible subsequent contributions may be allocated towards older outstanding OD principal under the approved FIFO mechanism.
Settlement and FD lien release
When the relevant OD is fully settled, the bank verifies outstanding obligations and authorises release of the associated lien according to its rules.
Continued participation
Customers may continue with subsequent eligible transactions, subject to their choice, bank approval and applicable programme terms.
Understanding the FD–OD relationship
For illustration:
ILLUSTRATIVE EXAMPLE ONLYFixed Deposit
₹1,000
Illustrative OD
₹900
At an illustrative 90% OD-to-FD ratio, an eligible ₹1,000 FD could support an OD of up to ₹900, if permitted by the bank.
The example does not represent an available Federal Bank or other bank offer. Actual limits, margins, interest and eligibility are determined by the lending institution.
Understanding FIFO repayment
FIFO stands for First-In, First-Out.
Where authorised, the mechanism prioritises older eligible OD principal for repayment before newer principal obligations.
Billinate maintains separate records for:
- FD and associated OD.
- OD principal and interest.
- Customer contributions.
- Principal repayment.
- Outstanding obligations.
- Lien and collateral-release status.
Importantly, paying OD interest does not automatically reduce OD principal.