New Delhi: Congress MP Karti Chidambaram on Wednesday questioned the reliability and accountability of CIBIL scores, a private company managing credit histories for over the Indians to determine their chances of loan approval in the future.
He claimed that in the absence of a proper redressal mechanism, the financial difficulties faced by a significant portion of the population are exacerbated.
“Like Chitra Gupta makes accounts of all our activities in this world to Yamadharma, there is this agency called ‘CIBIL’ that is keeping a record of all our transactions. If you want to take a car loan, or if the finance minister of the country wants to take a house loan, everything depends on the CIBIL score. But nobody knows how this CIBIL organisation works; it is a private company called ‘TransUnion,’” he said while speaking in the Lok Sabha on Wednesday.
“This is the company that is rating every one of us based on our credit history, but we do not know whether they are updating our credit history properly. There is no transparency, and there is no way for us to appeal. There is a complete asymmetry between the company that is rating us and us. There is no redressal at all, sir,” he said.
“Every time we go tell a bank, I have paid my loan on time, but they will say, ‘No, your CIBIL score is bad. We do not know how to approach CIBIL. For farmers, when they get a subsidy from the government, when they use the subsidy to repay the loan, CIBIL does not update it. If you go for a settlement with the ARC, CIBIL does not update it. There must be greater transparency. The government has missed out on an opportunity to make life easier by reforming these things instead of just tinkering in the margins,” he further said.