Government Rules on CIBIL Status Update for Settlement of Personal Loans / Credit Card Accounts

Now that we are getting lot of e-mails on the subject of what does the Actual RBI / Ministry of Finance Rules state on the Status of a Loan Account / Credit Card mutually settled between the Bank and the Customer. We had asked the RBI this Question,

In case of a Loan / Credit Card account settled mutually between the Bank and the Customer after the customer had defaulted on payments, I would like to know, what the Bank is supposed to update at Credit Bureau – CIBIL for “STATUS” column of this particular account under consideration in accordance with RBI rules / regulations / guidelines / act / etc. Kindly provide photocopy of appropriate RBI legal document / documents relevant to this subject.

RBI’s Response to the Question is as follows,

You may kindly refer to the Regulation 10 (a) (ii) of Credit Information Companies Regulations, 2006 and Rule 22 of Credit Information Companies Rules, 2006

We are attaching a Scanned Copy of our correspondence [PDF] down with RBI for your ready reference.

What does Regulation 10(a)(ii) of Credit Information Companies Regulations Act Say?

Every credit institution shall –
(A) keep the credit information maintained by it, updated regularly on a monthly basis or at such shorter intervals as may be mutually agreed upon between the credit institution and the credit information company; and
(B) take all such steps which may be necessary to ensure that the credit information furnished by it, is update, accurate and complete.

What does Rule 22 of Credit Information Companies Act say ?

Updating of the credit information by credit Institution. –
Without prejudice to the provisions of rule 21, if there is any change in the data, information or credit information, already furnished to a credit information company due to change in the liability of the borrower or his guarantor, on account of write off in full or in part of the amount of outstanding dues of the credit institution or the repayment thereof by the borrower or his guarantor, or release of the guarantor, or any scheme of arrangement entered into between the credit institution and the borrower, or the final settlement of the amount payable by the borrower pursuant to any scheme of arrangement with the credit institution, as the case may be, or on account of any such other reason, the credit institution shall,-
(a) continue to update such data, information or credit information promptly or in any event, by the end of each reporting period not exceeding thirty days until the termination of the respective account relating to such credit information; and
(b) furnish an updated credit information to the credit information company at the earliest in this behalf.

It is now amply clear on why we advised for Tough Negotiations During Settlement on the CardBhai Forum. Questions and Comments are Welcome 🙂

2 Responses to “Government Rules on CIBIL Status Update for Settlement of Personal Loans / Credit Card Accounts”

  1. what is the difference between credit rule and credit score.
    and even please try to define how banking works on issuing credit card on cibil basis

  2. Rules are Framed by Government or the Regulator [RBI]. Credit Score is the Number that Indicates your Credit Worthiness. Higher the Score, better is your standing and your chances of getting Loans at attractive EMIs / Lower Interest Rates.

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