If you are a borrower, you have a right to have your credit information updated, with credit information companies, such as the Credit Information Bureau of India Ltd (CIBIL). In a recent decision in Sujith Prasad Vs RBI , the Kerala High Court has clearly said so.
Justice N Nagaresh held the view that the nature of credit score is such that it has a positive or negative impact on the financial credibility of an individual and hence, updation of the same is important.
Banks and finance companies rely on credit scores given by credit information companies to check the creditworthiness of the borrower. The credit score is simply a numerical expression based on an analysis of the credit history of an individual.
In the case before the Kerala High Court, the borrower was refused a vehicle loan by the ICICI Bank, even though the manager of the bank was satisfied with the borrower’s eligibility, because there were some adverse entries against the borrower in a CIBIL report. The petitioner’s case was that he had paid all dues and said that the bank should have communicated that to CIBIL.
The court pointed out that Section 21(3) of the Act of 2005 has specifically engraved a provision in regard to updation of information by the credit information company on request of borrower or client whether by making an appropriate correction, addition, or otherwise. The Court opined that the statutory right of the petitioner had been violated by the ICICI bank and directed it and CIBIL to update to share the correct credit details of the petitioner.
(The author is Partner at AK Mylsamy & Associates)