RBI got 30 plaints a month against credit bureau CIBIL

NEW DELHI: Every month, over 30 complaints are being filed against CIBIL (Credit Information Bureau (India) Limited) with the Reserve Bank of India for providing erroneous credit information, wrong credit scores and multiple other such incidents.
On the basis of this incorrect information, banks in India lend money to individuals at an increased rate of interest or in many cases just deny giving loans to individuals.
CBIL is a private institution that is given the responsibility to draw financial status of individuals from banks and maintain a record of their financial history with regards to their borrowings and loans from formal sector banks and lending institutions.
A CIBIL score ranges from 300 to 900 and this is a reflection of an individual’s credit history and is the first check that banks carry out to determine the credibility of the borrower. An excellent credit score is often considered to be ranging from somewhere between 750 to 900.
The RBI, while replying to an RTI query by The Sunday Guardian, stated that since January 2020 till the first week of November, the regulatory bank has received 646 complaints against the credit bureau, CIBIL. Out of this, the RBI “resolved” 511 complaints while 135 such complaints are still “pending” with the RBI till date.
CIBIL draws its powers to collect and store financial data of individuals from section 14 and section 17 of Credit Information Companies (Regulation) Act 2005. Several complaints against CIBIL have also been appearing over the social media platforms where their credit scores are being changed without assigning any reason. Many people often complain about the opaque nature of operations of such credit bureaus.
Some have also raised concerns about how their CIBIL score changed “without assigning” any reasons and which have led to their dream of buying a home and car have been shattered. While many have also complained about erroneous CIBIL reports where despite repaying their loan, their loan amount overdue keep reflecting on their CIBIL report.
Individual borrowers for long have been raising complaints about errors in the credit history and many times such complaints with the credit bureau fell into their deaf ears and this had necessitated the RBI to bring in an ombudsman for the credit bureau where time bound resolution of complaints would have to be mandated.
The importance of credit bureau has gained significance since all the lending institutions in the country depend upon the credit history and credit score provided to them by credit bureaus such as CBIL. It is this score provided by CBIL that would determine the interest rate at which the banks would lend money to the individuals and also assess the credit risk of the borrower.