Frequent CIBIL Reporting Errors By Banks Putting MSMEs In Quandary

New Delhi, Jul 19 (KNN) Muzaffarnagar based MSME, Chakradhar Chemicals has reported erroneous credit reporting by HDFC Bank, causing significant business disruptions.

The company discovered an unexplained drop in its CIBIL score while applying for a SIDBI loan, attributed to HDFC Bank reporting overdue payments despite no borrowing history.

“Numerous complaints are coming where Banks casually report erroneous credit behaviour of borrowers without verifying facts.  The impact of such adverse reports is extremely damaging and inflict collateral damage to borrowers”, says Anil Bhardwaj, Secretary General of Federation of Indian Micro and Small & Medium Enterprises (FISME).

In a representation to Reserve Bank of India, MSME associations had forcefully raised the issues highlighting complete lack of  accountability of Banks for such practices.

This error has halted Chakradhar Chemicals' loan process with SIDBI. The company initiated a dispute with CIBIL on May 25, 2024, but claims no response from HDFC Bank after the standard 30-day resolution period.

An email from HDFC Sales Pvt. Ltd. on June 24, 2024, referenced an overdraft account with a debit balance of Rs. 603.28, charging approximately Rs. 9.00 monthly.

This account is linked to a personal loan of the company's Managing Director, Neeraj Kedia, raising questions about its impact on the company's credit rating.

Despite contacting HDFC Bank's Branch Head, Rahul Pathak, on June 26, 2024, Chakradhar Chemicals reports no satisfactory resolution.

The lack of progress despite their repeated attempts has left Chakradhar Chemicals feeling frustrated and powerless in the face of what they see as a significant threat to their business.

Chakradhar Chemicals is seeking immediate correction of the erroneous reporting, written confirmation of the rectification, a formal apology, and compensation for any financial losses incurred due to this error.

Their demands reflect the potential consequences of inaccurate credit information for small businesses and the challenges in rectifying such errors.

(KNN Bureau)