Substantial improvement in borrower data, says CIBIL

Chennai: Over 70 per cent of information about borrowers collected by banks and financial institutions matches with CIBIL report and the credit information bureau expects this rate to rise to 90 per cent in future, its Chairman M V Nair said.

"There has been substantial increase... 72 per cent of information collected by banks matches with CIBIL report in the past four-five years," Nair told reporters on sidelines of the fifth Annual Credit Information Conference, here. "It was 65 per cent earlier. I am very hopeful that it goes upto 90 per cent in coming years. At the international level, matching data of 90 per cent means is very good", he added. CIBIL reports and credit scores, based on an individual's payments pertaining to loans and credit cards, are provided to lenders in order to help evaluate and approve loan applications. However, the Chairman hastened to add that despite the increase in generation of data, banks and financial institutions need to do a lot more on collecting "quality" data.

"Getting clean data (about the borrower) is very important. Though there is substantial improvement, still lot of things need to be done in terms of quality", he said. Stressing the need for providing quality data, he said, "the track record of the person who applies for loan will be taken into account. The bank will be able to take a right decision because, if the borrower had defaulted somewhere he may not be able to get the loan." Replying to a query on the areas CIBIL is focusing, Nair said it was working actively on building a credit information bureau for micro-finance institutions (MFIs) and would take one or two years to put the whole system in place.

"There are two verticals we are looking at. First, Microfinance vertical. We are building that vertical. We have started working on it and will take one or two years to build the whole system proper" he said. Besides, he said, CIBIL was in talks with Reserve Bank of India to get details about user information from the Telecom Regulatory Authority of India (TRAI) and Insurance Regulatory Development Authority (IRDA) for first time borrowers. "...Reserve Bank can help us to give the clearance from TRAI and IRDA. We are communicating with the Reserve Bank that time has come to collect such information," he said. He said that enquiries from first time borrowers for getting loans from banks and financial institutions have gone up by 200 per cent in past three years.