Lok Sabha Question No. 3616 (UNSTARRED), answered on 2025-08-11
Subject: Decrease in Credit Score of Loan Applicants
Ministry: FINANCE
Asked by: Dr. Sambit Patra

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES *****

## LOK SABHA UNSTARRED QUESTION NO. 3616

ANSWERED ON MONDAY, 11 AUGUST, 2025/ SRAVANA 20, 1947 (SAKA)

## DECREASE IN CREDIT SCORE OF LOAN APPLICANTS

## †3616 DR. SAMBIT PATRA

Will the Minister of FINANCE be pleased to state:

(a) whether the Government has taken cognizance of complaints regarding decrease in the credit score of eligible loan applicants and declaring the applicants ineligible in a discretionary manner by companies operating in the field of Credit Information; (b) if so, the details of the corrective measures taken in this regard; (c) whether the Government has received any complaints regarding the non-compliance of stipulated  rules  and  guiding  principles  by  the  companies  operating  in  the  field  of  Credit Information and if so, the details thereof; (d) whether the Government proposes to strengthen existing grievance redressal mechanism in the light of increasing complaints by loan applicants against said companies and if so, the details thereof; and (e) whether the Government is contemplating upon the constitution of a Committee to review the functioning of companies operating in the field of Credit Information and if so, the details thereof?

## MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (e): Credit Information Report (CIR), including credit score, is provided by Credit Information Companies  (CICs)  based  on  the  credit  history  of  borrowers,  which  are  considered  by  Credit Institutions (CIs) for assessment of credit facilities. Based on the credit information furnished by CIs, credit scores are derived by CICs through respective proprietary models.

CICs  are  governed  by  the  provisions  of  Credit  Information  Companies  (Regulation)  Act,  2005 (CICRA), the rules and regulations made thereunder, and guidelines issued by the Reserve Bank of

## ANSWER

India (RBI) from time to time. The extant framework of CICRA empowers RBI to determine policy in relation to functioning of CICs, issue directions, inspect the book of accounts and impose penalty on CICs for non-adherences to the extant guidelines.

It  is  provided  in  CICRA  that  a  borrower  or  client  may  request  the  concerned  CIC  or  the  CI  for correction/updation  of  his  credit  information,  and  the  concerned  CIC  or  CI  are  required  to  take appropriate steps to update the credit information within thirty days of being requested to do so.

Further,  RBI  has  extended  the  alternate  grievance  redressal  mechanism  under  Reserve  BankIntegrated Ombudsman Scheme, 2021 (RBIOS) to cover grievances against CICs also. In case of being aggrieved by an act or omission of a CIC or CI, resulting in deficiency in service, the customer can file a complaint under RBIOS for redressal.

Also,  RBI  has  proactively  taken  measures  for  strengthening  and  improving  the  efficacy  of  the grievance redress mechanism and customer service provided by the CIs and CICs, under the broad framework of CICRA, 2005. RBI has  issued  Master  Direction on  Credit  Information  Reporting, which, inter alia, include following provisions to improve delivery of services to the common man:

- (i) CICs have been directed to provide access to one free full credit report, including credit score, in an electronic format, to individuals whose credit score is available with them.
- (ii) CICs, with a view to strengthen the internal grievance redress mechanism by enabling a review of customer complaints before their rejection, have been directed to appoint Internal Ombudsman to act as an independent apex level authority within the CIC.
- (iii) CICs and CIs have been directed to implement the compensation mechanism for delayed updation  or  rectification  of  credit  information,  wherein  complainants  are  entitled  to  a compensation of Rs.100 per calendar day in case their complaint is not resolved within a period of thirty calendar days.
- (iv) In case of wrongful denial of compensation by CIs or CICs, the complainant can approach RBI Ombudsman under RBIOS.
- (v) CICs have been directed to notify customers via SMS or email, when their CIR is accessed by the Specified Users and such enquiry reflects in the CIR of the borrower.
- (vi) CIs have been directed to send alerts through SMS or email to customers, while submitting information to CICs regarding default or days past due in existing credit facilities
- (vii) CIs and CICs have been directed to undertake Root Cause Analysis (RCA) of the customer grievances at least on a half-yearly basis.

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