Is CIBIL depriving Indian Consumers of their Civil Rights?

CIBIL: One Sided Conviction?
CIBIL: One Sided Conviction?

Credit Information Bureau of India Ltd. (CIBIL) is an organization that provides information on Indian individuals’ borrowing and bill paying habits.

CIBIL is the major credit bureau in India. This means if you apply for any financial credit (home loan, personal loan, credit card, car finance etc) within India, your lender  will ask CIBIL about you before approving your loan or credit. Your lender and CIBIL identify you by your PAN number, among other things.

CIBIL does not tell your lender to give you a loan (or not to),  it only provides the lending bank with a report of your loan and repayment history, as told to them by other banks. This report is called a Credit Report, and each report is identified by a 9-digit ‘Control Number’. Your lending bank uses this Credit Report to generate an internal Credit Score, based on their policies. For example, Axis Bank might have a stricter policy, and not provide loans to you based on your report, but ICICI might overlook a few discrepancies and charge you a higher interest rate to compensate for the increased risk.

So based on the information about you provided by CIBIL, you might receive or be denied credit.

But are all Credit Reports accurate?

One important point to note is that CIBIL does not actually investigate whether your payment history – it just collects information provided by banks, and allows other banks to access it. This means that CIBIL does not have any true responsibility for the content of the reports it provides.

But the information contained in the Credit Reports can be inaccurate due to many reasons. According to American studies done on their credit rating systems, 80% of all credit reports in the USA contain factual errors such as duplicate listings, incorrect dates, tradelines placed on the wrong person’s credit reports, and omitted positive credit accounts. These American studies also indicate that 25% of credit reports containing errors significant enough to result in a credit denial.

With the opaque and review-less system in India, the error percentage is bound to be higher.

Since lenders are not suitably penalised for reporting credit defaults incorrectly,  they have no incentive to correct errors in the reports. CIBIL’s current policies therefore push the onus of correcting errors in the Credit Report on to the individual consumer – while denying them access to tools or information to do so.

Also, American consumers are entitled to one free copy of their Credit Report every year, which means they can try to correct errors. Indian consumers have no such option. CIBIL has been promising to allow Indian borrowers to access a copy of their own credit report, for a nominal Rs. 100 fee. But since 3 years, CIBIL has not delivered on it’s promise. Which means that the Indian consumer does not even have proper access to his own reports, let alone access to means of correcting errors in them.

How is an inaccurate report corrected?

Because you don’t have access to your own Credit Report, you cannot resolve any potential problems before they affect you. At the most, you can request your bank to pass on a Credit Report if they have one on you. But there is no reliable mechanism to know for sure if a report has been drawn on you.

If a Credit Report accuses a person of not having paid up, the person has the inalienable right to confront his accuser. Every time CIBIL delivers a credit report to a bank but denies access to the same report to the individual, CIBIL is depriving the consumer of these rights.

While Banks and Lenders face the risk of default if a Credit Report is incorrect, denying appropriate credit to individuals who deserve credit stifles the country’s financial growth. CIBIL needs to start being responsible and accountable for it’s actions.

How should we fix the lack of transparency in Credit Reports?

As we have seen, CIBIL’s current policies tilt the playing field against the individual consumer. What is the solution to this imbalance?

  • CIBIL should immediately allow individuals access to their own Credit Report.
  • For each day CIBIL denies an individual access to their own report, they should be held accountable and fined Re. 1 per day per report, per person.
  • Banks and other entities who report transactions to CIBIL should be held accountable for the accuracy of that information. Any organization that provides incorrect information to CIBIL should face punitive fines, to the extent of having their license suspended for repeated errors.
  • Till the time CIBIL does not provide Individuals access to Credit Reports, they should suspend Lenders’ access to the same Reports.
  • Every individual should be entitled to one free copy of their own Credit Report, per annum. Additional requests can be charged a nominal Rs 100 fee.

The crux of the problem is that CIBIL has been dragging its feet over making reports accessible to individuals. This is not fair to the individual Consumer, making CIBIL a one-sided and unaccountable entity.

Denying credit when it is due has far-reaching effects on India’s growth and development, and transparency in the Credit Reporting system will ensure that lenders don’t deprive people of credit without due cause.

10 thoughts on “Is CIBIL depriving Indian Consumers of their Civil Rights?

  1. There should be clear picture of the credit report. As every person cannot be a defaulter or a fraud
    when ever a person is in need does not get any help from any organization as to fulfill the need there should be a distinct and clear picture so that even the person whose credit check is done can be satisfied. As if a person applies for a Loan or Credit Card the person does not know what is credit history is as whenever there is a check it should be informed that what his or her credit history is so the person can be satisfied if the criteria is met or not.


    Binay Thakuri

  2. CIBIL is nothing but a private corporation who just keep database of credit history of customer from various bank sources. Everyone might have heard about of DUNS and BRADSTREET , these are people who basically operate CIBIL. But the ultimate power to provide credit or deny depends solely on the bank. That why bank keep the clause while signing your application that it can “reject or approve at its discretion”.

    The subject described and solution provided Salian holds good. Banks are practising the lending practise unethically. They are targeting for people who will default in the near future to be the potential customer. Since the profit earnings on such customer is higher than the customer who will pay regularly.

    As mentioned , you can control the country by controlling its credit, everybody will fall in line because of CIBIL, its there ultimate goal. Major stock holders of CIBIL are SBI, and major banks.

    And it is clearly evident that CIBIL does not comply with the RTI act of India, there workings, mode of operation are kept secretive.

    Its left to the law makers to enforce and enact on transparency of these institutions. And for the mistakes and crimes committed by the bank are left unaccounted since Indian people 99% don’t file the case against the injustice caused to them.

    but advantage of CIBIL it can stop major financial crisis due to mass default and give key metrics to the banks, but require legislation to make them responsible for the actions and accountability of incorrect information entered.

  3. Yes, as I’ve not given guarantee to anyone as per my knowledge, I’ve personal loan in HDFC for which they’re offering TOP UP I thought I would get it and last 3 months my amount not received having got all the confirmation. Now, they got CIBIL report where I am told that I gave guarantee to someone for Housing loan of 3 lacs which I am unaware..

    Hence, one should get their report every half year so that they can updates on various things which are against him. All credit card holders should also be aware of the things which are shown against his name.

    Gr8 initiative we should get along and share with all like minded people..



  4. Hi,

    Concept of CIBIL is a good thing. I appreicate the way it is working.

    But I see a slightly change which needs in the process is that CIBIL should also maintain the history of banks on point basis as the data which they got from the different banks (apart from national banks, here I am talking about private banks) are they representing the correct data or not?

    Apart from all this which are mentioned my few more persons, these private banks always put more interest rate and services charges and wheny people went in argue mode they simply start threatening them. In the worst case they put their name in CIBIL and made that person paralyzed forever (unless and until settelement done). So its something like authority had given a sword in the hand of a person who dont know how to use that and often misused it.

    Also I would like to mention (this happens with me from HDFC bank, Rajouri Garden Branch) then used very un professional and abusive language to the family members and forced them to pay the amount, which is normally more than the actual amount.

    I would like to ask did ever the AUTHORITY thinks about this that how to stop these “Tanashahi” of private banks?
    Did they ever think that the person and family member who suffered from all this? This is nothing but an harassment!!
    Why only bankers have right why not consumer do have right to black list the private banks on the basis of proofs and evidece (which happens with me wherein I am giving more amount than the actual to the HDFC bank) ?
    Why not consumer get the reloan in future when he setteled the account?

    Above stated statements are few questions over which we must think!!!


  5. Hello Sir,
    I am facing a lot of problem regarding which i need some expert guidance.

    I Ravinder Kumar Budhiraja and my DOB is 09-10-1981 . I have never take credit card from any bank but when apply a loan from bank bank told me that ur name is in CIBIL .and your a/m is 96270 is pending . But I know that I have never ever receive credit card from any bank .So kindly please let me know that how to know the name of the bank it is and to whome should i contact for ..? I have contacted the CIBIl by sending them lots of Email but I don’t think so that they people are in the mood for giving me any support, they just asking me the money and when I raised the issue at Consumer Court they just told that I have a strong reason to drag the Bank to the Consumer Forum .If any one have any idea or faced such issue in past or facing such issue please contact me I need some help in Removing my name from defaulter list and form a group to fight against such agency who are forcefully taking our hard earned money.


  6. I am facing lot’s of problems related to cibil report/ its associated memers as a result of this I am going to file case against them to protect the rights of indian citizen. If any one is interested I would like to suggest to Indian Citizen who are facing same problems , to file a PIL against CIBIL/Its members & other associated organization.

    Becaue as per my openion no one can declare any borrower as a Defaulter Debtor without having genuine material evidences and any Judical Court’s Order. In India CIBIL is committing violation of our Constitution, ignoring fundamental rights of Indian Citizen.

    Baldev Jaiswal

  7. I closed all my cards in 2007 called up the customer service and cleared all balances out of that my SBI card still had some left over (12 rupees) which was not informed to me, this 12 rupees was made 10000.00 and then showed as written off, hence my CIBIL score was screwed and I came to know about it in 2012 when my home loan is rejected due to this, I’ve now cleared all dues (Full 10000) and my score has improved from 561 to 575 which is till pathetic, CIBIL is one sided thing and its the legal outlet of the Banking Mafias just Imagine my situation.


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