RBI norms on Cibil will allow tracking of credit record

Many people use credit cards and large group of people take loans from the banks but how many of them are aware that their repayment track record is maintained by an agency-centralized credit information bureau India (Cibil). Not many. Generally the agency gets the information from the banks. The banks pass on the repayment track record of the borrowers and the credit card holders to the agency. From here the banks can get the complete credit history of the individual before lending money.

The data stored with Cibil positive or negative, plays a major role in determining whether a borrower’s future loan application gets accepted or rejected. But it is very unfortunate, unlike US or UK, Indian borrowers cannot access this information to verify its authenticity. The existing state of affairs may hopefully change soon. A senior banker suggested that Cibil should provide written intimation about a borrower's credit history, or publish it on a website, which an individual could access by paying a token fee.

Now Cibil has come forward and in a written communiqué to TOI, the credit bureau said, "We are expecting guidelines from the RBI in this regard. Once the guidelines are made available, we expect to be in a position to share credit information reports with individuals." However, till such a system is in place, "if there is some mistake (in my credit profile), I cannot get it rectified", says Bejon Misra of Delhi's Consumer Voice.

The senior banker said not many borrowers are aware that disputes over an insignificant amount can lead to negative credit history. He gave one instance in relation to this: "Suppose a person owes Rs 10,300 to a credit card company and has a dispute over the Rs 300 in charges, and refuses to pay this balance. Interest will rise on this amount and a small problem will become a big one... Certain systems are triggered off. For such a small dispute, your housing loan of Rs 10 lakh may get rejected." The banker has advised the borrowers, that they must pay up the entire amount and dispute the charges only after doing so.

Even in the recently released 2006-07 annual report on the banking ombudsman's scheme disputes that have reached the redressal body over "wrong reporting of status of (credit) card-holder's dues to credit information companies" has been mentioned.

An official of the ombudsman’s office mentioned such complaints might be over payment disputes which have been resolved but credit bureau might not have been informed about the development. On this subject, the credit bureau clarified, "Cibil is a neutral service provider, which maintains information on borrowers on basis of data reported to it by credit granting institutions. In cases of disputed data, Cibil will consider information provided by credit granting institution and update it in its database. Again, in cases where dispute is resolved, and any modification is made to borrower's details, credit granting institution needs to report rectified data to Cibil and Cibil database is updated immediately."

Relating to credit cards, Sachin Khandelwal, head (cards) at ICICI Bank, said sometimes negative history is created if a consumer stops using the card without informing the card-issuing bank. "My suggestion to customers is to make sure when you exit a card relationship, make the card outstanding zero, and get the bank's written confirmation on this."