The Reserve Bank of India (RBI) has notified the Reserve Bank of India (Credit Information Reporting) Directions, 2025, which mandated the lenders to update credit bureau records every 15 days.
As per the directions Credit Information Companies (CICs) and Credit Institutions (CIs) shall keep the credit information collected/maintained by them, updated regularly on a fortnightly basis (i.e., as on 15th and last day of the respective month) or at shorter intervals as mutually agreed upon between the CI and CIC.
The fortnightly submission of credit information by CIs to CICs shall be ensured within seven calendar days of the relevant reporting fortnight.
CICs shall provide a list of CIs which are not adhering to the fortnightly data submission timelines to Department of Supervision, Reserve Bank of India, Central Office at half yearly intervals (as on March 31 and September 30 each year) for information and monitoring purposes.
CIs shall ensure that the records submitted to CICs are updated regularly and that no instances of repayment, including that of the last instalment, are left unreported.
The Credit Information Companies (Regulations) Act, 2005 (CICRA) provides statutory backing for sharing of credit information by CIs with CICs subject to conditions stipulated therein. Therefore, with CICRA coming into force, the “consent clause” has become redundant and hence consent of the borrower need not be insisted upon by banks.
Advantages
Improved Credit Score Accuracy
- Timely Updates: Ensures that borrowers’ credit histories are accurate and up to date. Positive repayment behavior, such as clearing dues or closing loans, reflects faster in credit scores.
- Correcting Errors Quickly: Reduces discrepancies or outdated information in credit bureau records.
Better Borrower Experience
- Quicker Credit Access: Borrowers can secure new loans or credit cards faster as their updated records provide lenders with current information.
- Positive Impact of Good Behavior: Prompt updates ensure that benefits of timely repayments or resolution of defaults are recognized promptly.
Transparency in the Credit Ecosystem
- Enhances trust between lenders and borrowers by ensuring transparent and real-time reflection of repayment behaviors.
- Mitigates potential disputes arising from outdated credit report data.
Risk Mitigation for Lenders
- Early Warning Signs: Frequent updates allow lenders to identify and act on potential delinquencies sooner, reducing credit risk.
- Better Credit Appraisal: Accurate, updated information supports informed decision-making during loan sanctioning processes.
Alignment with Dynamic Financial Environments
- Reflects rapid changes in a borrower’s financial situation, such as an improvement in financial discipline or changes due to economic events, enabling adaptive credit offerings.
Promotes Financial Inclusion
- Reduced Time for Improvement: For borrowers in financial distress who improve their repayment behavior, updated records help them rebuild creditworthiness more quickly.
- Encourages responsible borrowing as borrowers see a quicker positive impact on their credit scores.
Boost to Regulatory Compliance
- Aligns with RBI’s objective to enhance the integrity and transparency of the financial system, fostering stability and confidence in credit markets.
Circular Details
RBI/DoR/2024-25/125 DoR.FIN.REC.No.55/20.16.056/2024-25
Date: January 06, 2025
