Solving disputes with banks

With the Credit Information Bureau India Ltd (Cibil) providing reports to individuals for a fee, now you don’t have to wait for a bank to reject a loan or credit card application to know your credit information report (CIR).

The CIR report will be made available on request through an email, telephone, fax or ordinary mail.

However, what is likely to be more helpful is that fact that you will get to know if a bank has categorised you as a defaulter, either because of laxity on the bank’s part or a dispute. Take the example of Yogesh Anand, whose home loan application was being rejected by banks because of a dispute with an earlier credit card company.

Anand’s card issuer had misplaced his cheque and charged him late payment fee. He sent mails asking the issuer to reverse the penalty. But when the issuer did not take any step to rectify the situation, Yogesh surrendered his card without paying the late fee. The result: His issuer reported him as a defaulter.

By next year, Cibil proposes to have a solution for this. On providing evidence of dispute, the agency will state so in the CIR.

“As of now, we have operationalised a manual and an interim solution (of providing CIR); our services on the fully automated disclosure and dispute handling capabilities will be available by early next year (April-June quarter),” said a spokesperson of the Cibil. Once the

automated system starts, consumers will be able to report errors to banks through Cibil. “And, banks to respond to errors via an on-line tool,” added the spokesperson.

Banks also welcome this. “If the borrower claims that a case of default is on account of dispute, we do consider the case,” said a banker.

But if the customer does not settle the dispute, he/she may have to provide more collateral. Of course, an existing relationship with the bank and the track record will help. In case you find that the bank has classified you as delinquent for a loan or card that you never took, you will need to approach the bank.If they do not respond within a month's time, these individuals should approach Reserve bank of India's (RBI's) banking ombudsman," said the RBI's spokesperson.

Kolkata-based Amitava Roy, for instance, was reported as defaulter by his bank for an overdraft of Rs 1.2 lakh. On approaching the ombudsman, the bank corrected the error.“At times, the data of two people can overlap giving rise to such a problem. This occurs as Cibil collates data from various source,” said a banker.