Credit card and personal loan defaulters will find no respite now as banks can track down defaulters with a new information service tool. The service, spread all across the country, will send an email alert to the bank when a borrower tries to borrow a loan amount from another bank in any part of the country.
Earlier, there was no way to hold such fishes, as they couldn’t be traced until they offered a new address to their bank. But the new central database system maintained by CIBIL can spot defaulting borrowers based on their PAN Card number, amongst other details. While many are viewing this service as an infringement of privacy the law does not bar credit companies from holding back, as such services are within the purview of the Credit Information Act, since the data is shared only among lenders.
Arun Thukral, Managing Director of CIBIL said, “We are now seen as the bad guys, but what we are doing is merely providing information that is submitted to us by other banks. There have been cases where two branches of the same bank have given loans to the same borrower”.
To counter allegations that it may be reproducing false information, CIBIL has also decided to flag disputed items in the credit history statement. According to the law, a 30 day window can be provided during which credit data should be revalidated.
However, the present process of CIBIL seems to be cumbersome for clients as they have to forward an application along with a demand draft of Rs. 145/- to be mailed to them, in order to receive one’s credit history. Mr. Thukral added, “We will soon be integrating the payment gateway with our website, which will enable individuals to make applications for their credit history by making the payment online.”