RBI mandates fortnightly credit information reporting to boost transparency

The Reserve Bank of India (RBI) on Thursday mandated the frequency of credit information reporting to fortnightly basis as a measure to boost transparency in the system. This will be effective from January 1, 2025, the banking regulator said in notification on Thursday.

Currently, credit institutions (CIs) are required to report the credit information of their borrowers to credit information companies (CICs) at monthly or such shorter intervals as mutually agreed between the CI and CICs.

While announcing the monetary policy review Shakitkanta Das, Governor, RBI said, “It is proposed to increase the frequency of reporting of credit information to a fortnightly basis or at shorter intervals. Consequently, borrowers will benefit from faster updation of their credit information, especially when they repay their loans. The lenders, on their part, will be able to make better risk assessments of borrowers.”

According to experts, this will lead to better underwriting decisions by the lenders while ensuring faster resolution of consumer disputes. Stating the decision as a very progressive move which will strengthen the credit information system, Rajesh Kumar, MD & CEO, TransUnion CIBIL said that, “With more frequent data reporting by banks and credit institutions, CICs will be able to update credit records faster and this will translate into more updated data being available for making informed lending decisions by credit grantors. This will also help in resolving consumer disputes faster based on updated data in the credit records.”  

The RBI notification said the fortnightly submission of credit information by CIs to CICs should be ensured within 7 calendar days of the relevant reporting fortnight. RBI also said that CICs must provide a list of lenders which are not adhering to the fortnightly data submission timelines to RBI’s Department of Supervision at half yearly intervals.

“These instructions shall be effective from January 1, 2025. However, the CIs and CICs are encouraged to give effect to these instructions as expeditiously as feasible but not later than January 1, 2025,” the RBI notification said adding CICs and CIs that contravene or default in adherence to the directions shall be liable for penal action.