RBI mandates fortnightly credit information reporting to boost transparency

Posted on September 6, 2024 by Editor

The Reserve Bank of India (RBI) has announced that starting from January next year, credit institutions (CIs) will be required to report their borrowers' credit information to credit information companies (CICs) on a fortnightly (ie: every two weeks) basis. This new mandate aims to enhance transparency and improve the accuracy of credit data available in the financial system.

Currently, CIs report credit information to CICs either monthly or at shorter intervals if mutually agreed upon. The shift to fortnightly reporting will allow lenders to access more current borrower information, enabling better risk assessment and underwriting decisions. The RBI's notification specifies that this new reporting frequency must be adhered to within seven days of the end of each fortnight.

This regulatory change underscores the importance of timely and accurate financial data in enhancing credit risk management and decision-making processes. The move should also strengthen India's credit information ecosystem. According to Rajesh Kumar, MD & CEO of TransUnion CIBIL, more frequent data updates will lead to improved credit records, facilitating quicker loan processing and resolution of consumer disputes.

For more details on this development, see here.