RBI flags use of credit bureau data for analytics

Mumbai, Jan 3, 2024

The RBI has raised concerns over credit information companies utilising consumer data for consulting and analytics purposes. This was conveyed to CEOs of credit information companies in their meeting with RBI deputy governor Swaminathan J on Tuesday. Executive directors and senior officials of supervision and regulation departments attended the meeting.

Credit information companies or credit bureaus are repositories of borrower data and generate revenue by providing lenders a customer's track record and credit scores based on the track record. However, with the massive amount of data that they collect, they are in a position to undertake deeper analytics and provide value-added solutions to lenders.

The deputy governor noted the vital role played by CICs in the financial system. He, however, pointed out a rise in customer complaints related to credit information, and some concerns have emerged during RBI's supervisory assessment.

The deputy governor highlighted the need to improve data quality, indicating potential discrepancies or shortcomings in the existing data management systems.

[The Times of India]