RBI Plans Weekly Credit Reporting to Boost Transparency and Prevent Loan Fraud
The Reserve Bank of India (RBI) is planning a major change in the country’s credit reporting system. Soon, banks and financial institutions may be required to submit credit data on a weekly basis, instead of the current fortnightly schedule. The move aims to ensure real-time accuracy of credit scores and reduce the growing cases of loan-related fraud.
According to reports, the RBI’s proposal focuses on improving transparency, enhancing consumer trust, and enabling lenders to make better credit decisions. In the future, the central bank might even consider daily reporting, marking a significant step toward a more secure and reliable credit ecosystem in India.
Weekly Credit Reporting: A Key Change Ahead
Currently, credit institutions and banks report customer data to credit bureaus every 15 days. However, delays in updating loan records often create gaps in the system. For instance, when a borrower’s loan turns bad, the information sometimes takes time to reflect in their credit report. During this lag period, several individuals exploit the delay by obtaining new loans from other banks before their poor repayment record becomes visible.
To curb this issue, the RBI has proposed that banks and credit institutions report credit information every week. This will ensure that data remains current and minimizes the risk of fraud. The move is particularly crucial at a time when credit scores play a decisive role in approving or rejecting loan applications.
Strengthening Fraud Prevention
The RBI believes that timely data updates are essential to reduce fraudulent borrowing. Many borrowers take advantage of the delayed reporting cycle to apply for fresh credit from multiple institutions. With weekly reporting, such loopholes will be closed, resulting in a more transparent and efficient system. This step will also help lenders assess risks accurately and protect themselves from potential losses.
Toward Daily Reporting in the Future
In its draft proposal, the RBI has hinted at a gradual transition toward daily credit data reporting. While this might take time to implement, it signals a strong intent to make India’s financial data ecosystem more dynamic, transparent, and responsive. Once daily reporting becomes the norm, consumers can expect greater accuracy in their credit reports, leading to increased confidence in the financial system.
Focus on Data Accuracy and KYC Integration
The RBI also plans to strengthen the error correction mechanism within credit reporting. Institutions will be required to enhance their internal systems to ensure faster and more accurate updates. Additionally, the central bank has proposed incorporating the Central KYC (Know Your Customer) number as a separate field in the reporting format. This will allow credit bureaus to link and verify customer details with greater precision.
Industry Welcomes the Move
TransUnion CIBIL Managing Director and CEO Bhavesh Jain welcomed the proposal, calling it a “positive step toward building a stronger credit ecosystem.” He noted that frequent reporting will enhance data accuracy and transparency, helping both borrowers and lenders build mutual trust. Jain added that the move will also encourage institutions to invest in advanced technology, making credit processes faster, smarter, and more reliable.
As India continues its push toward financial digitization, the RBI’s weekly credit reporting initiative could become a cornerstone of transparency and accountability in the country’s lending system — ensuring that both borrowers and banks operate with greater confidence and fairness.
