There has been a decline in defaults thanks to the credit information tools, said bankers who participated at the fourth annual credit information conference of CIBIL in Chennai.

Credit institutions in India rely on Credit Information Bureau (India) Ltd’s credit report and CIBIL TransUnion Score for credit decision making.  The company maintains information on over 305 million consumer trades and 15 million commercial trades.

“With usage of credit scores and banks applying their credit and risk management policies to determine the lending, delinquency in retail loans has come down by about 50% in the past few years,” said Dr J Sadakkadulla, regional director, Reserve Bank of India.

“Lending today has become highly information oriented, more objective and speedier with the use of credit information,” he added.

With retail credit seeing a decline in bad debt, there is now an improvement in asset quality in this sector. “Implementation of advanced approaches like use of credit information tools from CIBIL have contributed to the decline in NPAs (non-performing assets) in retail credit,” said M V Nair, chairman, CIBIL.

“This is a win-win for both lenders and borrowers. Lenders benefit from increased volumes, higher efficiencies and lower costs of acquisition while minimizing risk of default. Consumers benefit with the increased convenience, faster approvals and credit sanctions at better terms and conditions in turn driving credit penetration,” said R K Dubey, chairman and managing director, Canara Bank.

Source: Times of India