Credit body creates database of frauds for banks
Frauds will now have a tougher time fooling banks. The Credit Information Bureau (CIBIL) has for the first time in India created a database of frauds and banks can check the credentials of new customers against this database before dealing with them.
The service in the long term is expected to help genuine customers get loans at cheaper rates. CIBIL already tracks the borrowing history of consumers and banks these days relay this to the database to judge whether the customer seeking a loan can repay. Anyone with poor credit history is usually denied a loan.
The new service — CIBIL Detect — will be created using information supplied by member banks about fraudulent activities detected by them. Other banks can scan the database by entering the name and date of birth of the customer, or name and address or unique numbers like PAN, passport numbers, voter ID numbers, telephone and mobile numbers. Companies can search the database by entering the name and address, telephone and fax number, TIN, PAN or company registration number.
CIBIL MD Arun Thukral said this service will help genuine customers get loans at cheap rates. “These days good borrowers subsidise the bad borrowers. Interest rates depend on the risks associated. Services like CIBIL Detect will ensure that good borrowers do not pay high interest rates,” he said, adding that a genuine borrower can negotiate better interest rates as they have clean records.
Currently there is no system wherein banks can share with each other the details of accidents of frauds. Banks do inform the RBI about fraud, but the RBI doesn’t share it with other banks. Also, only frauds above Rs 1 lakh are reported to the RBI. CBIL Detect will include information about people who had submitted wrong information about address, PAN numbers and employment. “The solution is addressing an industry concern at a time when lending institutions are facing increases in writeoffs and bad debts, many of which can be attributed to fraudulent acti-vities,” said Mr Thukral.
Post new comment