The Hindu Business Line : Banking on credit bureaus
Indian Banking System was badly wanting the services of a credit information agency for long years, in the absence of which credit decisions could not be taken scientifically. Earlier, the relationship between a banker and its customer were that of a trust; neither depositors nor borrowers information could be shared by a bank with any other agency, excepting Govt Departments like Courts, Tax authorities, or RBI.
That was taken advantage of by the errant or wilful defaulters all these years. Today, the scenario has changed completely with the advent of technology and amendments to the legal provisions. Credit Information Bureau of India Limited, is a recent organisation started in 2005 with the support of agencies like Dun and Bradstreet. CIBIL deals with both the Individuals as also Corporates and their information.
This development has definitely given much relief to Banks in India. They are now able to take accurate credit decisions because of the availability of credit information as also the system of credit scoring mechanism. It is only expected that all the banks, non-banks and other financial institutions in the country become members of CIBIL and share complete information on all types of borrowers so that credit and repayment culture would be more and more scientific and healthy.