CIBIL Credit Report; Direct Access by March 2010

Arun Thukral, MD, CIBIL, Credit Information Bureau (India) Limited, talks about the importance and limitations of credit information reports.

When will we be able to access our own credit scores?

We are currently developing the infrastructure, systems and processes that would be needed to give individuals direct access to their credit information reports or CIRs. This will be in place by the end of this financial year. The CIR will give a factual snapshot of an applicant's credit history and payment records. As for the fee structure, according to the Credit Information Companies Regulations (CICR) Act, 2005, the maximum fee that can be charged for a CIR is Rs 100.

The CIR does not contain the details of a borrower's assets and investments. Given its bearing on an individual's repayment capacity, shouldn't this be factored in?

CIBIL provides credit information about borrowers based solely on the data that has been made available to it by its members. This factual information, both positive and negative, is provided to its members in the form of risk management tools like CIRs, portfolio review reports, Cibil TransUnion Score, etc. Though these tools are important inputs for a lender to decide on credit disbursal, factors like the borrower's income, occupation, net worth, other lines of credit, etc, are also considered.

Does this mean that if one bank denies credit to a person, another bank can take a different view?

When it comes to offering credit, every financial institution has its own level of risk appetite, which is based on its credit and risk management policies. The CIR is used as a part of its due diligence procedure. So, yes, credit lenders can take different views on a particular CIR and use the information for their decision-making differently. Cibil does not pass any value judgements and it is up to the financial institution to sanction a loan or credit.

Now that RBI has directed banks to issue credit reports to customers on request, what is the incentive for customers to go to Cibil directly?

Customers can get their reports from a credit institution only if they have applied to it for credit. However, they will be able to access their CIRs from Cibil whenever they want. Also, the Cibil report that credit institutions access is tailored for them. An individual will need to see a report that is in a consumer-friendly format and can be understood more easily. The CICR Act enables transparent and active information sharing. It helps boost a sound credit culture, which translates into economic growth.

Source: IndiaInfoline

RBI to introduce 100 crore Rs 10 plastic notes

Good news for those who get frustrated when receiving a soiled note from a shopkeeper. You may see the crumpled soiled notes soon becoming a thing of the past with the Reserve Bank planning to introduce polymer plastic bank notes in the denomination of Rs.10 whose life span would be 4 times more than the normal paper currency notes. The brilliant advantage of these Pleastic notes is that they would be difficult to imitate.

The Reserve Bank of India bank has in an initial phase decided to introduce 100 crore pieces of Rs 10 polymer notes, for which it has hired a global tender.

Explaining the rationale for introduction of polymer notes, an RBI official said, these notes would have an average life span of 5 years compared to one year for the currency notes.

These notes are cleaner than paper notes and it would be difficult to counterfeit the currency.

Taking the history of the introduction of the polymer currency notes were first introduced in Australia to safeguard against counterfeiting of currency.

Besides Australia, many other countries have introduced plastic notes which include New Zealand, Papua New Guinea, Romania, Bermuda, Brunei and Vietnam.

Source: Economic Times

Rupee to get an Identification Symbol finally!!

The Indian rupee has never had a symbol and this is the reason why the Indian government has decided to invite designs from the Indian public and judge by the number of entries received. According to the reports, the response has been phenomenal.

Major currencies of the world like the US dollar, the pound sterling, the yen and the euro among others, have an identification symbol.

The Indian rupee, however, does not. In February this year, the Finance Ministry invited Indian residents to participate in a competition for designing a 'symbol for the Indian rupee'. Government officials have told CNBC-TV18 that as many 2,500 entries have been received from across the country.

While the designs are under the wraps for the moment, a seven-member committee will soon meet for the first time to short list five entries. The committee is headed by a Reserve Bank of India (RBI) Deputy Governor and will scrutinise the designs before choosing the final one.

The Finance Ministry has said that the symbol should represent the historical and cultural ethos of India and be widely accepted across the country. It has also said that the symbol should be applicable to a standard computer keyboard. The symbol will also have to be in the Indian national language script or a visual representation.

Finalising the chosen design will take a few months, but once the process is over, the Indian rupee will finally have a symbol - befitting its status as the currency of a rising economic power.