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The Reserve Bank of India (RBI) and the Financial Services Department of the Finance Ministry are now going to make historic changes in the country’s credit score system.
Don't worry about your credit score (Source: Internet)
New Delhi: The Reserve Bank of India (RBI) and the Financial Services Department of the Finance Ministry is set to make historic changes in the country's credit score system. This change is a relief news especially for those crores of people whose credit score is poor or who do not have any CIBIL score, but they need a loan.
Till now CIBIL score was considered the primary qualification for taking a loan, but now the emphasis is being laid on updating it in real time and comprehensive credit analysis going beyond the CIBIL score. The purpose of this initiative is that every citizen of the country, whether urban or rural, can get easy access to loans.
RBI says that the current credit score update process takes an interval of 15 days, due to which the person taking the loan has to suffer losses due to wrong score many times. Now it will be updated on the basis of real time data so that an accurate and fresh assessment of a person's financial status can be done.
RBI is also considering a Unique Credit Identity Number, which will enable the loan eligibility of any person to be checked in a more accurate and faster way.
On the lines of UPI, now ULI i.e. Unified Lending Interface platform is being implemented, which will be linked to all the Government, private, rural and cooperative banks of the country. Through this, many information like a person's property, crop, farm, loan history and digital transactions will be available at one place.
This platform will be of special benefit to those people who do not have any credit score, such as rural farmers, gig workers, e-commerce sellers etc. Now their loan eligibility can also be decided on the basis of their digital activity and financial behavior.
There are lakhs of people in rural areas who have not taken any bank loan till now, so they do not have any CIBIL score. Due to this, they find it difficult to take loan from the bank. Now to overcome this problem, work is being done on "Rural Credit Score Framework", whose pilot project is going on. Soon it will be implemented across the country.
Those who have poor or no credit score will also be able to get a loan.
Real time updates will avoid wrong reporting.
Gig workers, small shopkeepers and farmers will also be able to join the credit system.
The loan giving process will be fast, transparent and data based.
This initiative of RBI and Finance Ministry is like a new revolution in the Indian financial system. Now the credit score will not be just an account of the past, but it will be based on current behavior and possibilities. This will not only help banks to make better decisions, but the common people will also get the real benefit of financial inclusion.
Soon, even a common farmer or an online seller will be able to get a loan without any hassle, and this is the real direction of India's digital and inclusive economy.
