Calling for more accurate and timely submission of customer data by financial institutions, MV Nair, Chairman, Credit Information Bureau (India) Ltd, said better compliance would improve the asset quality of these institutions. “Though compliance has improved with 72 per cent of data being accurate and timely now, than just 65 per cent three years ago, we should take it to 90 per cent for better assessment and penetration of credit information,” Nair said.

Addressing a gathering at the Fifth Annual Credit Information Conference on the theme ‘Information solutions for optimising business processes’, organised by CIBIL on Wednesday, he said inadequate and poor quality data from financial institutions are still a challenge for the credit health assessing agency. Though the RBI has repeatedly issued circulars for submission of timely and accurate data to CIBIL, data received from some institutions are still inaccurate and inadequate to make proper assessment. There are instances of junk values, inaccurate data and incomplete information being submitted by some institutions, which leads to a lot of mismatch, he said.

However, he pointed out that public sector banks have improved much in terms of data quality and timely submission.

On asset quality of financial institutions, he said this phase of retail credit growth has been accompanied by increased credit report usage by lenders. Giving out some statistics, he said the credit applications increased over 200 per cent in the last three years.

The growth is driven predominantly by younger population, with more than 40 per cent of new credit applications coming from applicants who are less than 35 years old. Applicants who are less than 40-year old account for 60 per cent of new credit applications. And, the highest growth was witnessed in personal loans and two-wheeler loans segments, followed by home loans.

Related Topics