CIBIL - Credit Information Bureau (India) Limited (CIBIL)

The Credit Information Companies (Regulation) Act, 2005, and various Rules and Regulations issued by Reserve Bank of India has empowered CIBIL or (Credit Information Bureau (India) Ltd to collect the data from various types of credit grantors (i.e. lenders). and then share the same within the group. The legislation has enabled banks to submit data to CIBIL without obtaining borrower consent This has enabled CIBIL to tracks repayment history of bank customers loans, credit cards and further banking finances. The access to this database is usually available only to officials of banks. Whenever a person approaches bank for a fresh loan

By August, 2007, 154 credit grantors have accepted membership to CIBIL. These include 79 banks accounting for over 90% of the total credit outstanding amongst the commercial banks, 16 HFCs accounting for over 70% of the total credit outstanding amongst the HFCs, 11 FIs accounting for over 90% of the total credit outstanding amongst the FIs, 2 Credit Card Companies accounting for over 90% of the total credit outstanding amongst the CCCs, 7 State Financial Corporations and 41 major NBFCs representing a substantial portion of the credit outstanding of that sector.

At present, CIBIL collects and updates the information about the borrowers from its Members (who are actually credit grantors) only. (However, later on it is likely that this information will be supplement by CIBIL with public domain information so as to create a truly comprehensive snapshot of an entity’s financial track record)..

Then CIBIL allows the credit grantors to have access to its database to search and gain a complete picture of the payment history of a credit applicant.

Thus, we can say that CIBIL collects commercial and consumer credit-related data and collates such data to create and distribute credit reports to Members. (A Credit Information Report (CIR) is a factual record of a borrower's credit payment history compiled from information received from different credit grantors. Its purpose is to help credit grantors make informed lending decisions - quickly and objectively).

What Are the categories for classifying the Data?

The data of the bureau can be broadly classified into two categories :

Commercial Bureau : The Commercial Bureau, which has credit information on non-individual borrowers, has been launched on May 8, 2006, with a database of 6.73 Lakh accounts contributed by 37 Members. Subsequently, our database has grown over 17.8 Lakh accounts contributed by 71 Members. As per the relevant RBI circulars, CIBIL is already maintaining a database of Suit-Filed accounts of Rs. 1 Crore and above and Suit-Filed accounts (willful defaulters) of Rs. 25 Lacs and above.

In its initiative to improve Credit flow to SMEs, CIBIL is being supported under SME Financing and Development Project implemented by Project Management Division, SIDBI, with an aim to ensure flow of credit to the under penetrated SME sector while increasing banks’ profitability and market penetration (via sound credit decisions) and reducing non-performing loans (via credit information tools).

Consumer Bureau : The Consumer Bureau was launched on April 5, 2004 with a database of 4 million accounts contributed by 13 Members. Subsequently, our database has grown over 114 million accounts contributed by 94 Members. The Consumer Bureau reports are available to Members, who have submitted all their data to CIBIL in an acceptable format (Principle of Reciprocity).

Who Can Access CIRs? Can a Borrower obtain copy of CIR from CIBIL ?

Reports can be accessed by Members on the principle of reciprocity i.e. only those Members who have provided all their data to CIBIL are permitted to access CIRs. Members can do so only to take valid credit decisions. Disclosure to any other person or entity is prohibited. However, a borrower can not obtain a copy of CIR from the CIBIL, but when a Member has drawn a report on that borrower, a copy of the same can be obtained from the Member by the borrower.

The experience of the borrowers with CIBIL has been mixed. Lot of people are facing hardships because of their negative report from CIBIL. Although most of the good borrower agree that it is a good initiative but what they complain is that banks are updating outdated and incorrect information on it and thereby making many customers life miserable. Some of the major problems faced by them include:-

However, some people believe that you can approach CIBIL to get a copy of your own credit report.. The Credit Information Companies Regulation Act, 2005 (CICRA) gives you (the consumer/borrower), the right to ask for a copy of your credit report. But this Act it has not come into force as yet. Thus, once, the provisions of the Act come into effect, you can directly get a copy of your credit report from CIBIL. In case of CIBIL, you will be able to demand a copy of the report from them. The regulations of CICRA require that the credit bureau itself provides you with the report on payment of the specified fee and after establishing your identity.

Thus, you may make the request in writing to CREDIT INFORMATION BUREAU (INDIA) LIMITED Hoechst House, 6th Floor, 193 Backbay Reclamation, Nariman Point, Mumbai 400 021, and get an acknowledgement for your request. This report will then outline what exactly is reported by the bank in respect of your credit account and enable you to take action accordingly if there is any error in the reporting. Specific measures have been provided in the CICRA for the consumer to raise a dispute in respect of any wrong reporting with a time bound dispute resolution mechanism that has been built in).