Mumbai, Mar 24 (KNN)  The Reserve Bank of India has recommended that customers be given a free copy of their credit information reports (CIR) to enhance credit discipline among them, particularly those wanting loans.

“The Committee has further suggested that providing customers with a free copy of their CIRs would help create awareness about the need to have credit discipline, enable customers to correct their behaviour and improve their score well before they plan to avail fresh credit of any kind, help detect identity theft at an early stage, help CICs correct and validate their database and increase their business in the long run,” said a recent RBI press release.

The apex bank on March-22, released on its website, the Report of the Committee to recommend Data Format for Furnishing of Credit Information to Credit Information Companies (CICs) for public comments.

The committee has made wide ranging recommendations on issues relating to credit information, such as, increasing its coverage, format of reports and best practices to be followed by credit institutions, credit information companies (CICs) and the Reserve Bank.

Towards making credit information more useful, the committee has stated that low usage of credit information by member institutions and other specified users’ needs to be addressed by requiring CICs to populate their databases with requisite credit information so that enquiries by specified users yield desired information.

It has recommended that this can be done by increasing the coverage of credit information in terms of membership (all credit institutions should be members of all CICs) and products (also covering defaults in CPs and such other products) and by creating awareness about Credit Information Reports (CIRs).

The central bank has made several other recommendations relating to CIR:

• CICs should have a common classification of Credit Scores so that it would be easier to understand and interpret. The Committee has recommended that the CIBIL method of calibrating from 300 to 900 could be adopted by other CICs.
• CICs should report details of co-borrower and guarantor.
• CICs may provide a single CIR for a borrower even if there are multiple addresses, using a unique identification number (PAN/Aadhaar No.).
• CICs may have link with the database of Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) which has data on mortgages so that CIRs can also provide information on property mortgages.
• An online data correction mechanism may be put in place by CICs to enable members to confirm/upload correction requests.
• CIRs should disclose details of disputes relating to information in CIRs and customer comments thereon, if any.
• Customer grievance redressal, especially in respect of complaints relating to updation/alteration of credit information, should be given top priority. This may be integrated with existing redressal systems, such as, Banking Ombudsman Scheme.
• Banks/financial institutions (FIs) may report cases of wilful default, even in non-suit filed cases, directly to the CICs of which they are members and the system of banks/FIs reporting information on non-suit filed cases of defaulters to the Reserve Bank of India may be dispensed with.
• CICs may make available the data in respect of suit-filed cases on their websites in a more user-friendly manner that would facilitate search across periods and banks.  (KNN/ES)