A major qualitative upgrade in market information relating to credit risks – RBI in India has made it mandatory for all credit information providers to report to the credit bureau at least every two weeks from January 1 year 2025.
Impact on Borrowers
This is a good change because the credit reference agencies are informed of borrower’s financial operations –payments of obligations, late payments, or closure of loans- earlier. Earlier, shifts occurred on the monthly average and can effectively prevent the proper identification of positive financial actions. Since the new 15-day reporting cycle will capture the changes in creditworthiness, the loan and interest will be more favorable for those who pay promptly.
Benefits for Lenders
As for financial institutions frequent credit updates allow a timely provision of a complete and exact description of the credit risks of a borrower. This way it helps in arriving at the right lending decisions, and hence helps in achieving a better credit market scenario.
Consumer Empowerment
The consumption data presented in the frequency regulated at bi-monthly improves consumer rights as it provides a more real outlook of the consumers’ creditworthiness. Such disclosure makes it possible for people to get adequate knowledge on the right measures of handling their financial conduct and credit records.
Conclusion
The regulation that credit records should be updated at least every 15 days by the RBI would therefore be a major step towards more sufficiently flexible and accurate Credit Reporting. This plan is in the interest of borrowers, and providers of funds towards the provision of an efficient and transparent financial market.