111894What problems are there with recycled mobile numbers?

In a first, the Reserve Bank of India has pulled up and slapped fines on the four credit bureaus in the country for failing to act on consumer complaints and update accurate data on borrowers, The Times of India has reported.
The credit bureaus that have been found wanting in compliance of RBI guidelines are TransUnion Cibil, CRIF High Mark, Equifax and Experian. The fines RBI slapped on them are Rs 26 lakh, 25.8 lakh, 24.3 lakh and Rs 24.8 lakh, respectively.

The fines follow a notice from the regulator as to why action should not be taken against them. The central bank’s measure follows the inspection of the operation of the credit bureaus as on March 31, 2021.  Experian was hauled up for maintaining inaccurate credit-related information.

The other three were found guilty of keeping inaccurate data apart from borrowers pointing out that these agencies did not update/rectify credit information and failing to inform the complainant of the remedial steps within the stipulated time window of 30 days.

Important function
Credit score bureaus perform an extremely important function in the economy since they accumulate and maintain financial information about consumers and calculate credit scores that help lenders to make proper and balanced decisions to sanction loans.

Since availability of loans are important in stimulating demand in the economy, credit bureaus act as the grease in the credit mechanism helping different financial institutions maintain a smooth supply of credit to deserving individuals so that eventually NPAs do not accumulate in the books of banks and FIs.

While the main function of credit bureaus is to maintain accurate debt repayment data and provide them to lending institutions, they also have a responsibility to rectify incorrect information and relay them back to the affected consumer.

“The credit bureaus in possession or control of the credit information shall make the correction or addition or otherwise and take appropriate steps to update the information within 15 days after being requested by a credit institution or specified user,” say RBI rules.

The banking regulator has also hauled up StanChart for assigning several customer identity numbers to the same individual customer which violates the norms of the RBI. RBI also slapped fines on seven cooperative banks for a few violations of guidelines.