cibil project

8/20/2019 Cibil Project

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STUDY OF CIBIL IN BANKS

BRIEF HISTORY

CIBIL has no such history related to itself. It was just established to avoid frauds,

defaults etc by maintaining the credit score of every individual or partners if any.

The banks registered with CIBIL do the registration for the individual or partners.

Thus CIBIL keeps them updated within every ! or " days with the credit score

of the individual or partners. CIBIL does not have a proper history as it#s the first

ever such bureau set up.


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CHAPTER 1: INTRODUCTION TO CIBIL

1.1 INTRODUCTION:

CIBIL $ India%s first credit information bureau $ has been established to cater to the

credit information re&uirement of the financial sector and serves as an effective

mechanism for curbing the growth of 'on$(erforming )ssets *'()s+. The eserve

Bank of India *BI+ constituted a -orking roup in /ecember 0!!" to e1amine

the possibility of CIBIL performing the role of collecting and disseminating

information on suit$filed accounts and list of defaulters, being reported to BI by

banks and notified 2inancial Institutions *2Is+.

BI then decided to implement some of the recommendations of the -orking

roup, which satisfied the e1isting legal framework of the time. In their letter no3

/L.BC."""40!."5.!!"40!!"$!0 dated 6une 7, 0!!08 BI apprised banks, 2Is and

state financial corporation#s of the formation of CIBIL and directed them to send,

to CIBIL as well as to BI, data on3

• 9uit$filed accounts of s. " Crore and above, and

• 9uit$filed accounts *willful defaulters+ of s. 0: Lacs and above

Conse&uently, banks and 2Is submitted the list of suit$filed accounts of s. " Crore

and above, as on ;arch


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database on suit$filed accounts of s. " Crore and above and suit$filed accounts

*willful defaulters+ of s. 0: Lacs and above.

This information is based on an application developed to enable the users to access

data through a parameteri=ed search process across banks and companies at various

geographical locations. 9uit$filed accounts of lower value are being covered in a

phased manner.

1.2 FEATURES OF CIBIL:

Complete Credt Re!ord" 2or credit grantors to gain a complete picture of

the payment history of a credit applicant, they must be able to gain access to

the applicant%s complete credit record that may be spread over different

institutions. CIBIL collects commercial and consumer credit$related data and

collates such data to create and distribute credit reports to its ;embers

which are credit institutions and banks in India.

#em$er% o& CIBIL" CIBIL#s over "!!! strong member base includes all

leading public > private sector banks, financial institutions, non$banking

financial companies and housing finance companies.

CIBIL'% prod(!t% )*d %tep% &or lo)* %)*!to* " CIBIL#s products,

especially the Credit Information eport *CI+ and CIBIL Trans?nion 9core

are very important in the loan approval process. @nce the loan provider has

decided which set of loan applicants to evaluate, it analy=es the CI 4 9core

in order to determine the applicant#s eligibility. Aligibility basically means

the applicants ability to take additional debt and repay additional outflows

given their current commitments. (ost completion of these first 0 steps and

other relevant documents, loan is sanctioned.


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Credt S!ore " The CI and Credit 9core not only help loan providers

identify consumers who are able to pay back their loans. This translates into

faster loan approvals for consumers. )n individual with a credit score above

:! has better bargaining potheyr with the lenders, since he is perceived as a

responsible borrower. 9ince consumers can now access their Credit 9cores

and CIs directly from CIBIL at the cost of I' 7!, they can see for

themselves how they are perceived by the lenders before applying for a loan.

Better De!%o*%" CIBIL empotheyrs both loan providers and individuals to

see their financial and credit history more clearly and hence, take better and

more informed decisions. E!o*om! St)$lt+" CIBIL helps to maintain economic stability within the

banks and also helps to maintain the cash and credit transactions.

Help% to m*m,e de&)(lt tr)*%)!to*%" )s every individual is given a

credit score, it becomes easier for the banks to decide whether to conduct

credit transactions with the person or not. If the person has made a default in

any investment, his credit score gets deducted and vice versa.

F)!lt)te% !redt -r)*tor% * de!d*- o*3$

". -hom not to give credit

0. -hom to give credit and what e1tent

Prode% o$/e!te tool% &or r%0 m)*)-eme*t

1. )l(e%:

CIBIL has < main values3$

". S(%t)*)$lt+:

a+ ?tmost care for their Business


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b+ ?tmost care for their Anvironment

c+ ?tmost care for their 9ociety

0. I*te-rt+ )*d Tr(%t:

a+ ighly ethical behavior

b+ ighteousness

c+ onesty and 9incerity

d+ Transparency and Commitment in dealings


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C(%tomer Coll)$or)to* Credt)$lt+

A1cellence in /elivery 9hared Fision Athical Behavior

(ersonal @wnership Break @rgani=ation 9ilos

$ @ne CIBIL

-alk the Talk

)n )mbassador for

CIBIL

Leadership Connect Take )ccountability

@ne can also pursue his career at CIBIL. It provides a lot of different career

opportunities to the beginners as well as the well e1perienced. It builds great

careers. CIBIL believes that good people in a great environment are likely to

inspire e1traordinary results. They have strived to build a culture that is rooted in

this belief.

45)t o*e !)* e6pe!t &rom CIBIL:

• Learning and rowth

• Competitive Compensation and Benefits

• @pen /oor (olicies and Amployee Centric -orkplace Culture

• -ork with /omain A1perts

45)t t5e+ e6pe!t o& )ll CIBIL)*%:

• )ccountability and (ersonal @wnership

• Thinking 2resh

• Challenging the 9tatus Guo


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2ollowing are few fields where people can work and build great careers at CIBIL3

"+ Oper)to*%3 They currently live in the information age. Big data has

become central to driving business decisions. CIBIL is at the center of this

information revolution. They collect and collate millions of bits of

information into reports that can be used for various purposes. The

challenges encountered while trying to make meaning out of data re&uires

one to be analytical, restheirceful and persistent.

0+ I*&orm)to* Te!5*olo-+: The Information Technology *IT+ Team is

responsible for managing CIBIL#s vast ardware and 9oftware Technology

Infrastructure. The IT Team provides valuable technical insights, production

and testing support for new and e1isting solutions. The IT Team is also

responsible for the managing their various technology vendors along with

the (roduct teams.


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-orkplace culture which have gone a long way in building motivated teams

to deliver e1ceptional value.

78 Le-)l: The Legal Team is responsible for managing all of CIBIL#s new and

e1isting partnerships with vendors and customers from a Legal standpoint.The Legal Team ensures that all Legal Gueries and e&uests are attended to

in a timely fashion. The Legal Team also ensures that CIBIL#s business

processes are conducted in accordance with statutory regulations.

1.9 A4ARDS 4ON BY CIBILACHIEE#ENTS8:

CIBIL 5)% re!eed 2 );)rd% ;5!5 )re -e* $elo; * det)l.

"+ ')99C@; )ward for best IT driven Innovation for its /irect$to$Consumer

Initiatives3

CIBIL#s Consumer 9ervices process was adjudged the best in its category at the

0!"< ')99C@; )wards for Hthe best IT driven Innovation# for the innovation and

efficiency of its /irect$to$Consumer process which has enabled easier and faster

access of the Credit 9cores and eports for the consumers ensuring customer

delight while reducing costs. ')99C@; has awarded CIBIL for leveraging IT as

a Hvalue unlocker# in achieving synergistic business transformation, process

innovation, cost optimi=ation, process efficiency and customer delight. CIBIL#s ITdriven innovations have helped thousands of individual consumers to access their

own Credit 9cores and eports online and monitor their financial help.


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0+ )ward for (ractices promoting HGuality -ork Life# at the 0!"7 )sia (acific

; Congress3

CIBIL has been recogni=ed for introducing, implementing and institutionali=ing

people practices around HGuality -ork Life# at the 0!"7 )sia (acific ;

Congress. Their uman esources initiatives spanning across the entire employee

life cycle from (re$ire to A1it designed to create a healthy and nurturing work

environment theyre well appreciated.

CHAPTER 2: OR


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• I(I(I $an) *td 1!'

• +tate $an) o% India !7'

• Indian ,erseas $an) 5'

• The ong .ong and +hanghai $an)ing (orporation 5'

• Union $an) o% India 5'

• $an) o% India 5'

• $an) o% $aroda 5'

• /llahabad $an) 3'

0+o these are the 9 shareholders (I$I* currentl has"

2. D%o*%:

CIBIL houses credit on over 00! million trades across individuals and businesses,

organi=ed into two divisions3 $ Consumer Bureau and Commercial Bureau.

The Consumer Bureau was launched in 0!!7 with 7 million records, and nowmaintains more than 05! million records. The Commercial Bureau was launched in

0!!5 with !. million records, and now maintains more than "0 million records.

Se!(rt+ %t)*d)rd%


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CIBIL is I9@ 0!!"30!!: certified$ the most recogni=ed security standard in the

world. CIBIL is one of the "!!! companies in the world, which have achieved I9@

0!!" certification, and one of the first few in India.

2.3 45)t % CIBIL'% role * t5e Lo)* Appro)l Pro!e%%=

CIBIL#s products, especially the CIBIL Trans?nion 9core and the CI are very

important in the loan approval process. The credit score helps loan providers

&uickly determine, who they would like to evaluate further to provide credit.

The CIBIL Trans?nion 9core ranges from

providers prefer credit scores which are greater than :!. @nce the loan provider

has decided which set of loan applicants to evaluate, it analy=es the CI in order to

determine the applicant%s eligibility. Aligibility basically means the applicant%s

ability to take additional debt and repay additional outflows given their current

commitments. (ost completion of these first 0 steps the loan provider will re&uest

for the applicant%s income proof and other relevant documents in order to finally

sanction the loan.

2.9 45)t t5% me)*% to o*e )% )* *dd()l=

9ince, the credit score and CI not only helps loan providers identify consumers

who are likely to be able to pay back their loans, but also helps them to do this

more &uickly and economically. This translates into faster loan approvals.

?ntil recently, there was little visibility and transparency with regards to the loan

approval process and the elements that loan providers used to evaluate their loan

application. 9ince, CIBIL has made the credit score and CI available to people,

the people will be able to see how valuable a customer one are to loan providers.


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CIBIL empotheyrs both loan providers and individuals to see their world more

clearly and hence, take better and more informed decisions. )ll these credit scores,

CI#s etc is available on the CIBIL#s official website. The consumer or any partner

can login and download whatever is re&uired. To download, registration in the first

place is important. CIBIL is not like any other financial institutions. It just has a

single purpose. The employees of the same are trained thoroughly before joining

the institution. ence even they can help their consumers in forming decisions or

at least guiding them in a right way.

2.7 APPLYIN< FOR A BANK LOAN OR CREDIT CARD=

T5e %!ore pl)+% ) !rt!)l role * t5e lo)* )ppro)l pro!e%%.

The CIBIL Trans?nion 9core is a < digit numeric summary of the credit history

which indicates the financial > credit health. The higher their score, the higher are

the chances of their loan application getting approved. CIBIL Credit information

report *CI+ is provided to one along with their score, because it is the basis on

which their Credit 9core is generated. It#s a record of their credit history that is past

loans or credit cards availed from various loan providers who are members of

CIBIL. Taking a loan can be a complicated process for most people. The

illustration below indicates what to e1pect at every step during the loan evaluation


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process. It helps understand how the credit decisioning works in banks and the

steps they take before deciding to accept or reject a loan4 credit card.

The above illustration clearly shows the process which is follotheyd by CIBIL

officially. It also shows the reasons for rejections and approvals. BI hasapproved this above procedure.


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CHAPTER : DISPUTES SETTLE#ENT

.1 D%p(te% )*d Lo)* Re/e!to*%:

The sanctioning of loan is lengthy but easy procedure. But there are few disputes

and rejections as well.

CIBIL doesn#t maintain a defaulters list. It maintains the credit history of

individuals as reported by ;ember Credit Institutions. Their loan application could

have been rejected because of their CIBIL Trans?nion 9core and CI. The

decision to grant a loan is solely dependent on the credit policy of the Credit

Institution. In order to check their credit history in detail and to identify any possible discrepancies4 errors that might be reflecting against their name, one can

purchase their CIBIL Trans?nion 9core and Credit Information eport.

In case of any inaccuracies in the Credit eport, one can raise a dispute with CIBIL

to rectify them.

Comp)*+ D%p(te%

CIBIL Company Credit Information eport *CC+ consists of Company /etails

A.g.3 )ddress, Contact etc., )ccount Information and An&uiries. If any information

on their CC is inaccurate or needs to be updated, they shall be pleased to assist

one in rectifying 4 updating their report. To raise a dispute online, click on the link

provided at the bottom of the page. This process is known as Company /ispute

esolution.

/ispute re&uest can be raised based on Company Credit Information eport *CC+

purchased by the consumer from CIBIL or CC pulled by the Credit Institution.

o through the types of dispute enlisted below to understand the various

inaccuracies that can be corrected.


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I*dd()l D%p(te%

In case of individual disputes, as they know that the CIBIL does not maintain any

defaulters list, it just maintains all types of records, hence the individual has to

report it in case of any fraud. The easiest way to initiate a dispute re&uest is by

submitting a duly completed @n$Line /ispute 2orm. )lternatively, one can raise a

/ispute e&uest by writing to us at the following address3 Credt I*&orm)to*

B(re)( I*d)8 Ltd> Hoe!5%t Ho(%e> 7t5 Floor> 1?> B)!0$)+ Re!l)m)to*

N)rm)* Po*t> #(m$) 3@@@21. This is in case of both companies as well as all

the individuals.

.2 T+pe% o& D%p(te%:

1. Company / Account Details

,ne can dispute arious elds in their co&pans ((" or

ea&ple (o&pan #etails li)e (o&pan a&e /ddress(o&pan :hone nu&ber (o&pan :/ u&ber etc and /ccount

#etails li)e (redit Tpe /sset (lassication +anction /&ount etc

;ust to na&e a %ew"

2. Ownership

,ne can also raise a dispute %or ,wnership o% an /ccount" The

ter& ,wnership o% an /ccount &eans that a particular account in

their co&pans (( does not belong to one or the entire report is

inaccurate"


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3. Duplicate Account

i% the sa&e account re


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• Credit Type

• )sset Classification

• 9anction /ate

• 9anctioned )mount4 igh Credit

• Current Balance

• Bank emark

• 9tatus

• /ate Classified as -illful /efaulter

• 9uit 2iled 9tatus

•

/ate of 9uit and 9uit )mount

Report Order N(m$er DUNS No.

• eport @rder 'umber @rder 'umber assigned to the Company CI by the

CIBIL system.

• /?'9 'umber /$?$'$9 'umber is a uni&ue identification 'umber

provided by CIBIL to every Borrower, at a particular location.

@ne can now raise an online dispute for any data inaccuracy reflecting in their

report. )ll fields can be disputed in their report, e1cept the following fields3


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• Control 'umber

• ;ember 'ame *?nless it is an @wnership /ispute+

• )ccount 'umber *?nless it is an @wnership /ispute+

• /ate eported

• An&uiry /ate

)ll the details mentioned above are re&uired to raise a dispute either by an

individual or any company. )fter the collection of all the details only the CIBIL

takes any kind of action. @nce a re&uest has been registered, CIBIL checks

whether all the re&uisite details have been provided. CIBIL routes the dispute to

the concerned Credit Institution *CI+. @nce the CI confirms the error and provides

the correct data, CIBIL then updates the report and informs one accordingly.

DISPUTE OF CREDIT REPORT ONLINE:

Credit Information eport *CI+ plays a large part in the loan application process.

ence, any discrepancy in their CI may result in reduced chances of a loan

approval. Therefore, it is important that the information on their CI is accurate

and updated. ) dispute re&uest can be raised based on either a CI purchased by

one directly from CIBIL or a CI accessed by the Credit Institution *CI+ withwhom one have applied for a loan. The CI consists : sections namely (ersonal

Information, Contact Information, Amployment Information, )ccount Information

and An&uiry Information. If any information on their CI is inaccurate or needs to

be updated, they will assist one in doing so.


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. DISPUTE RESOLUTION PROCESS

Individuals or companies, who have raised a dispute, will get an email notification

from CIBIL informing them of the status of the dispute re&uest. If their dispute is

accepted and dispute information is updated, CIBIL will send their updated report.

@nce CIBIL gets the corrected data from the Credit Institutions *CI+, it updates

their records. @nce CIBIL gets the data from the Credit Institutions *CIs+ it takes

days for it to be updated in their database. days is the ma1imum time re&uired.

SOLUTIOS !" ##D$ %!UAU'

Port&olo ree; report%:

(ortfolio reviews are a significant way for banks and financial institutions to

monitor, manage, and act upon their portfolio credit risk and enhance overall

portfolio returns. Beyond this, they can deepen account holder relationships and

build the foundation for loyalty and continuing business growth.

Be*e&t%:

• )ccount ;anagement

• Better risk &uantification


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• Improved Trend ;onitoring

-hether it is their individual customers or business clients, conduct a portfolio

review to optimi=e their portfolio performance, and implement strategies to retainand deepen relationships with their key customers.

CIBIL'% Tr)*%U*o* S!ore:

India#s first credit scoring model that helps effectively predict the likelihood of an

applicant becoming more than " days delin&uent on one or more tradelines over

the subse&uent "0 months. This considers all trades *secured > unsecured+ of a

borrower for scoring.

CIBIL Tr)*%U*o* B(re)( )*d Credt C5)r)!ter%t!%:

Bureau Credit Characteristics is a list of predefined characteristics that summari=e

various aspects of a customer#s credit information. The set comprises multiple

credit characteristics which can be used for model development, data analysis,

customer profiling, migration analysis and a variety of other account management

analyses.

CIBIL Dete!t:

educe risk in their current portfolio and in assessing new applicants with CIBIL

/etectJIndia#s first repository with information on igh isk )ctivities

contributed by leading lenders. CIBIL /etect provides one with an easy and cost$

effective way to access and share information on high$risk activity at account

ac&uisition and in ongoing portfolio management to make more informed decisions

and improve profitability.


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CIBIL #ort-)-e C5e!0:

CIBIL ;ortgage CheckJthe first centrali=ed electronic database on mortgages in

India is supported by the 'B. The repository uses a sophisticated match logic

customi=ed for Indian market to help one share and access mortgage information,

e1ercise stronger due diligence, and reduce fraudulent transactions due to multiple

financing. It helps one make more informed decisions in assessing new mortgage

applications and managing their current portfolioJan easy, consistent and cost$

effective way to access and share mortgage information.

All t5e%e )$oe t5*-% !ome (*der CIBIL'% Port&olo #)*)-eme*t.

CIBIL Lo!)te Pl(%:

CIBIL Locate (lus leverages CIBIL#s vast and comprehensive information

repository to provide with comprehensive contact information on customers in a

faster and more cost effective fashion. ighly effective for collections >

contractibility programs.

Co*%(lt*- Ser!e%:

Their analytics and decisioning team consults with clients at every stage of their

customers# lifecycleJfrom ac&uiring customers to strengthening and e1panding

relationships with them. -ith a deep understanding of their business, they can

offer one the right tools to mitigate risk and derive ma1imum value from their

customers.

#)r0et S,*- )*d Competto* Be*!5m)r0*- Report%:

'ow identify the market potential more accurately by obtaining customi=ed

reports from CIBIL and Trans?nion ?tili=ing the strength of advanced analytics

and their large credit information database, they provide one with customi=ed


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reports basis their needs. If one are targeting a new market CIBIL reports can

help one si=e specific markets and gain more insights in business potential and

customer demographics. Their customi=ed competition benchmarking reports

help one stay ahead of competition. Leverage their data intelligence and

reporting services to carve out strategies, identify new markets and ma1imi=e

their business growth and profitability.

@ther things such as CIBIL#s Trans?nion score as well as personal loan score

and Bureau Credit characteristics are also included in Collections ;anagement.

I*d(%tr+ Tre*d%:

#)r0et I*%-5t%:

'ow identify the market potential more accurately by obtaining customi=ed reports

from CIBIL and Trans?nion ?tili=ing the strength of advanced analytics and their

large credit information database, they provide one with customi=ed reports basis

their needs. If one are targeting a new market CIBIL reports can help one si=e

specific markets and gain more insights in business potential and customer

demographics. Their customi=ed competition benchmarking reports help one stay

ahead of competition. Leverage their data intelligence and reporting services to

carve out strategies, identify new markets and ma1imi=e their business growth and

profitability.

CIBIL Co*%(mer Credt I*&orm)to* Report:

CIBIL Consumer Credit Information eport *CI+ provides information on credit

histories of borrowers to make objective lending decisions. -ith CIBIL Consumer

CIs credit grantors are e&uipped to gain insights into a consumer#s overall

borrowings across lending institutions, identify risk areas, disburse credit faster


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and with greater efficiency and grow business profitability. The credit information

is based on the millions of updates received by CIBIL from its strong member base

comprising of Banks, 2inancial Institutions, 9tate 2inancial Corporations, 'on$

Banking 2inancial Companies, ousing 2inance Companies and Credit Card

Companies.

CIBIL Comp)*+ Credt I*&orm)to* Report:

CIBIL Consumer Credit Information eport *CI+ provides information on credit

histories of borrowers to make objective lending decisions. -ith CIBIL Consumer

CIs credit grantors are e&uipped to gain insights into a consumer#s overall

borrowings across lending institutions, identify risk areas, disburse credit faster

and with greater efficiency and grow business profitability. The credit information

is based on the millions of updates received by CIBIL from its strong member base

comprising of Banks, 2inancial Institutions, 9tate 2inancial Corporations, 'on$

Banking 2inancial Companies, ousing 2inance Companies and Credit Card

Companies.

C(%tom Sol(to*%:

C(%tom S!ore!)rd%:


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9corecards can be crucial in helping one improve their portfolio performance at

every stage of customer lifecycle. They provide one with the e1pertise to build

ac&uisition, behavioral, or collections scorecards basis their business needs.

Leverage their data along with the strength of data from CIBIL to build scorecards

which can accurately and potheyrfully predict their customer#s behavior thereby

helping one drive efficiencies and ma1imi=ing portfolio profitability.

De!%o**- Ser!e%:

Leverage their decisioning services to make decisions with greater accuracy,

consistency and predictiveness. By applying sophisticated analytics, scoring and

models to multiple data, their decision centre can streamline and standardi=e time$

consuming business processes, and help one reduce risk and increase profits. Their

decision centre also integrates with the credit bureau for facilitating consistent

decision$making across various stages of their customer#s lifecycle$ including

underwriting optimi=ation at the time of customer ac&uisition, collections

management and prioriti=ation.

Consulting services and market si=ing benchmarking reports are also included in

the DIndustry TrendsE

SOLUTIONS BY INDUSTRY:

1. F*)*!)l I*%tt(to*%:

". CIBIL Consumer Credit Information eports

0. CIBIL Company Credit Information eports


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7. CIBIL Trans?nion 9core

:. CIBIL Trans?nion (ersonal Loan 9core

5. CIBIL Trans?nion Bureau Credit Characteristics

. CIBIL /etect

K. CIBIL ;ortgage Check

. ;arket Insights

"!.CIBIL Bureau )naly=er

"".CIBIL Locate (lus

"0.Consulting services

"


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proided or ho&e address" Their credit in%or&ation is

condential in%or&ation and should not be shared %reel"

• ,ne can opt %or (I$I*s online dispute resolution process %ree

o% charge"

• The cannot &a)e an changes in their credit report directl"

The respectie ban) or nancial institution should authori>e

us to &a)e the changes"

U%()ll+> t5ere )re 2 m)/or %%(e% ;t5 ) CIR:

• Inaccurate in(ormation re)ectin* on the CI& an+,

• De(aults on the payment cause+ either +ue to $

o Aenuine nancial hardship

o Bissed pa&ents on credit cards due to relocation

internationallC do&esticall

o Bissed pa&ents on non-receipt o% state&ent

o #isputes with the lender on account o% charges or

annual %ees

o #isputes with the lender on account o% %raud

Before they proceed to suggest a course of action, it is important to understand and

go through their credit report in detail.

FOLLO4 THE BELO4 STEPS:


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1" $UD +(,E2" (E(. (E#IT E:,T3" IITI/TE /(TI,

Indiiduals or co&panies can bu their (I$I* TransUnion +core

and (redit report" It costs onl 5!!C- and the can hae access to

the credit report within 3 business das"

CHAPTER 3: CIBIL'% CODE OF CONDUCT

3.1 CIBIL'% Code o& Co*d(!t:

P5lo%op5+ o& Corpor)te


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Their Corporate overnance philosophy envisages attainment of the highest levels

of Integrity, )ccountability, (erformance, Athical Behavior and A&uity in all facets

of their @perations. They believe that the practice of each of these elements will

create the right corporate culture, their employees and ensure sustainability of their

@perations.

They have an independent and informed Board of /irectors *and its emuneration

and )udit Committees+ at the core of their Corporate overnance practice. They

oversee how the management and all employees serve and protect the long$term

interests of all their stakeholders. Their employee#s actions are governed by their

Code of Conduct > Athics (olicy as enumerated below.

CIBIL'% Code o& Co*d(!t Et5!%

They in CIBIL believe that good business practices and ethics go together to

produce best long term results for all their stakeholders. They take their

responsibility and reputation as a good corporate citi=en seriously.

They are proud of their values and their effect on how they do their business. This

Code of Conduct > Athics (olicy sets forth legal > ethical standards that apply to

all employees of CIBIL.

The purpose of this document is to articulate the high standards of honest, ethical

and law abiding behavior e1pected of every employee and encourages the

observance of these standards to protect and promote the interests of all

stakeholders.

They would implement this Code over a period of time, starting with an internal

implementation as a first step. )ll employees are e1pected to follow this code fully

and are encouraged to report any non$observances.


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3.2 St)*d)rd% &or Co*d(!t o& B(%*e%% Et5!)l )*d Ho*or)$le

Co*d(!t:

)ll employees shall deal on behalf of the Company with professionalism, honesty,

integrity as high moral and ethical standards. 9uch conduct shall be fair and

transparent and be perceived to be as such by third parties.

Amployees are e1pected to deal with other colleagues in an honorable and

respectful manner, without any gender bias 4 harassment. )ll employees, vendors

and service providers should be selected on merit, without any conflict of interest

or favoritism. )ppropriate disclosures should be made wherever re&uired to

maintain transparency.

• Legal 4 egulatory Compliance

)ll employees shall at all times ensure compliance with all the relevant laws

and regulations affecting operations of the Company. They shall keep

abreast of the latest developments in relevant laws, rules and regulations

related to their area of work.

• 2air /ealings and A&ual @pportunities

CIBIL respects human rights and encourages fair dealing

*nondiscriminatory+ across all levels and to all stakeholders. There shall be

no discrimination on grounds of race, religion, gender, place of origin or

caste. )ccordingly, the Company e1pects each employee to deal fairly and

with e&uality with other employees, customers, shareholders, suppliers,

competitors, auditors, lawyers, creditors and advisers of the Company and

encourage others to do the same.


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• Business Interests

)n employee shall not engage in any business, relationship or activity,

which might conflict with the interest of the Company. )ll are e1pected todevote full attention to the business interests of the Company, and are

prohibited from engaging in any other activity that interferes with their

official performance of responsibilities to the Company or is otherwise in

conflict with or prejudicial to the Company.

• Transparency

)ll employees shall ensure that their actions in the conduct of business are

totally transparent e1cept where the needs of business security dictate

otherwise. 9uch transparency is brought about through appropriate policies,

systems and processes which they are e1pected to follow fully.

• Company esources

)ll the assets of the Company *both tangible and intangible+ shall be

deployed for the purpose of conducting the business for which they are duly

authori=ed for. 'one of these should be misused or diverted for any personal

commercial use or benefit, unless such use is allotheyd under the terms of

employment.

• Intellectual (roperty ights


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)ll inventions and innovations during course of business should belong to

the Company. These include new products, processes, services that get

developed while working on various assignments. Avery employee should

take precaution to prevent any loss of such I( rights, by keeping things

confidential > safe and reporting to Legal ;anager for applying for (atent,

Trademark and Copy ights.

• Corporate @pportunities

)ll employees should ensure that Company does not lose any benefit

accruing to it by negligence or delay in action. )ny benefit accruing to the

Company should be used only for Company purposes. There should not be

any direct personal gain arising out of it. owever, in specific instances

where there are some indirect benefits accruing to employee*s+, specific

approval should be obtained or granted.

• Cost Consciousness

)ll employees are e1pected to strive for optimum utili=ation of available

resources. They shall e1ercise due care to ensure that all costs incurred are

reasonable and there is no wastage of resources. Avery time a cost is

incurred, proper evaluation of such cost vs. benefits should be done, as if the

e1penditure was being incurred for self. (roper approvals as per Company

policies should be taken before any costs are committed.

• Company ecords

The Company records should be maintained in such a way that they are in

full compliance with all rules, laws and regulations. )de&uate precautions


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should be taken to protect them from falling into wrong hands, which could

harm Company#s business interests. They should be kept up to date and free

from any misleading or wrong information. Important records should be

stored in a safe place and properly marked.

• Confidentiality

Amployees come across a number of confidential information which may

take many forms. They must take proper care of such information and ensure

that it is not misused in any way which is detrimental to the Company#s

business or used for own commercial benefit. They must also not disclose

actions or activities relating to their business operations to outsiders, unless

they concern or impact them.

Amployees who have access to proprietary and confidential information

must take precaution to keep it confidential. Information should be disclosed

on a 'AA/ T@ M'@- basis to people who need to know such information.

The Company has procedure for entering into confidentiality agreements

with various vendors, which shall be e1ecuted before any information is

shared with them.

)n employee is e1pected to accept only such information that is necessary to

accomplish the purpose of receiving it, and not for any other purpose.

• (roducts and )dvertising

)ll products should be of promised content and &uality. )dvertising should

be within law and shall be honest.


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• Company eporting and Communications

)ll information reported or communicated by the Company should be

factually correct, complete and accurate. (roper cautionary statements shallaccompany wherever necessary, to avoid any misunderstanding or any

unintended harm.

• Interaction with ;edia

@nly ;/ and persons officially designated for such interactions should

engage with any member of press and media in matters concerning the

Company. )ny re&uests for interaction should be directed to such authori=ed

person.

• Competition

CIBIL believes in fair and ethical competition. 'o employee shall use any

illegal or unethical means to obtain any information about competition or to

take any business from competition by any misrepresentation or by giving

wrong facts to the customer*s+.

• Community )ctivities

In order to ensure fairness and avoid any adverse impact on business, all

community activities under CIBIL name shall be properly authori=ed before

they are undertaken by any employee. 9uch activities should be unbiased,

should not be related to promoting any religion and shall not harm any

business interests of the Company.


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• overnment 9upport and Ta1es

CIBIL is committed to be an honest citi=en. )ll employees are e1pected to

provide full support to any overnment initiatives, investigations andcompliance re&uirements. )ll due ta1es shall be computed properly and paid

on time. (roper disclosures should be made wherever there is lack of full

clarity and an opinion is formed.

• (olitical Contributions

CIBIL believes in fairness and e&uality. In order to avoid any conflicts and

political alignments, CIBIL shall not participate in any political activities or

contributions.

• ifting and Antertainment

CIBIL and its employees shall neither receive nor offer or make, directly or

indirectly, any illegal payments, remuneration, gifts, donations or

comparable benefits that are intended, or perceived, to obtain uncompetitive

favors for the conduct of its business. The employees may however accept

and offer nominal gifts during course of the business, provided such gifts are

customarily given and are of a commemorative nature, such as /iaries,

Calendars and other 9tationary items. Amployees may also attend and take

others out for normal or customary business lunch, dinner and functions.

These should however not impact or compromise objectivity and fairness of

an employee to take Company decisions.

• ealth, 9afety and Anvironment


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CIBIL shall strive to provide a safe, healthy, clean and ergonomic working

environment for its people and guests who visit it. It shall also strive to

prevent any wasteful use of natural resources *incl. water+ and is committed

to help in improving the environment. -herever feasible it will reduce,

replace, recycle or regenerate articles consumed in its operations.

• 2oreign Corrupt (ractices )ct

/uring performance of their duties and responsibilities, one should not use

agreements with consultants, brokers, sponsors, agents or other

intermediaries to channel payments to any person or persons, including

public officials, customers or employees, and thereby circumvent the

provisions of 2C() or local anti$bribery and corruption laws, the company%s

policies regarding bribery and corruption.

@ne should strictly comply with the ?9 2oreign Corrupt (ractices )ct, "

*2C()+, (revention of Corruption )ct, "KK *(C)+ and all applicable )nti$

Bribery and Corruption statutes and regulations, to the e1tent of the

applicability of the acts to CIBIL along with compliance with CIBIL#s )BC

and ift and entertainment policy. Compliance with these laws re&uires

strict adherence to standards for payments to government officials, political

contributions and company records.

@ne shall report inappropriate demands from government officials. ) record

of such demands and payments resisted may be kept and reviewed by senior

management to develop approaches to tackle such situations.

• )nti 9e1ual arassment


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Credit Information Bureau *India+ Limited *DCIBILE+ is an e&ual

opportunity employer and is committed to providing a productive work

environment not only to its employees but also to all other persons

associated with it. It is CIBIL#s policy to maintain a work environment free

of harassment, intimidation, threats, coercion or discrimination *whether

based on gender, pregnancy, childbirth or related medical conditions or

based on a person#s race, color, disability, age, religion, national origin,

se1ual orientation or any other characteristic protected by law+ in

recruitment, training, promotion, and other terms and conditions of

employment4 working.

The Company strongly disapproves of, and shall not tolerate harassment

*whether se1ual or otherwise+ of employees by managers, supervisors or co$

workers, subordinates, vendors or non$employees *retainers, freelancers,

vendor employees, consultants, contract employees etc.+ with whom the

Company has a business, service or professional relationship.

3. CIBIL A*d So!et+:

CIBIL believes in keeping the overall well being of the society at the core of their

values and purpose. 2or us, Corporate 9ocial esponsibility and 9ustainability are

not mere obligations but are vital pillars of their continual success.

Their core alue o% +ustainabilit is aligned to ta)ing Fut&ost care

o% societG b creating awareness about the less priileged and

encouraging the practice o% FAiing $ac)G" (I$I*s co&&unit

inest&ent is %ocused on the core the&e o% FEducating the girl

childG

3.3 OBECTIES:


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The main objectives of CIBIL#s C9 policy are3

• To create self$sustained improvement in the life of a Dgirl childE by

facilitating continued education

• To encourage employees to contribute in terms of both efforts 4 time and

monetarily

• To generate a feeling of goodwill among employees as well as stakeholders

)run Thukral, )dvisor, CIBIL, Board of /irectors says, DIf a child receives an

education, their life changes. Aducation is prere&uisite for a changed life. I was

very keen that if they can even change one girl#s life, they would have been doing

their job. That#s where this came from.E )run champions heavily for the education

of India#s marginali=ed oneth, especially girls. Citing India#s historic male

preference and his desire to combat it, )run firmly believes that the effects of

CIBIL#s transformative philanthropic efforts will e1tend further in the years to

come and believes that DIf the mindset of a woman changes, it will change the

world.E

3.9 OLUNTEERIN


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The employee can decide the amount as well as the area towards which they

would like their contributions to be made to.

• Emplo+ee ol(*teer*- :

)s creating socially conscious and contributing citi=ens is the underlying

objective of the CIBIL C9 agenda, all CIBIL employees are eligible to take

D@ne ;an$/ayE in a financial year to contribute time and efforts to

volunteer at '@s of their choice or at an '@ that CIBIL is contributing

to.

CSR:

CIBIL supports the education of the girls from marginali=ed backgrounds living in

slum areas in and around ;umbai in association with '@s ;uktangan and

Community )id and 9ponsorship (rogram *C)9(+

#(0t)*-)*

irls coming from low income families living nearby aged 7 to "7 years from

municipal schools leaving nearby are admitted. It is a uni&ue model the teacher is

from the community.

CASP

Aducation of girls aged 7 to "7 years from slum areas in Bhandup *suburb in

;umbai+ is sponsored. The program is integrated with the municipal school

systems.

CIBIL is also supporting the education of the girl child from the Matkari Tribe in

association with '@ Fidhayak 9ansad.

d5)+)0 S)*%)d


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Aducation of girls aged 7 to "7 years belonging to Matkari Tribe *with literacy rate

of less than "N+ is sponsored. ;ost of them are getting their first opportunity to

learn to read and write.


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CHAPTER 9: INTERNAL 4ORKIN< OF CIBIL

9.1 L&e At CIBIL:


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0. The CIBIL (hilosophy of ecogni=ing (otential and ewarding

(erformance go a long way in not only engaging the talent force but also in

setting the right behavioral e1pectations.


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CIBIL#s employees receive best$in$class benefits that are highly competitive.

Fle6$le 4or0 Ho(r% " )t CIBIL, they recogni=e the importance of having a

balanced work life. They encourage their team members to finish their work during

the Deight hourE day and discourage either late sitting or taking work home. Their

attendance policy is also designed to ensure a CIBILI)' is able to ensure his 4 her

work time is not impacted by any personal re&uirements

He)lt5 )*d 4ell*e%% " They offer regular e1ecutive health check$ups for all

employees. (eriodic ealth and -ellness sessions are scheduled. ) clinical

psychologist has been empanelled who is available every fortnight for theemployees

Pro&e%%o*)l #em$er%5p Pro-r)m% " Amployees are given opportunities to

develop their skills through (rofessional ;embership and Aducation Benefits

(rogram at CIBIL and various workshops. Individuals can opt for courses that

would help them in enhancing their skills. Amployees will be entitled to

reimbursement of )nnual ;embership 2ees of two (rofessional Aducational

Institutions where they have professional memberships as per eligibility.

Ed(!)to* Be*e&t% Pro-r)m% " CIBIL supports continuing education. Aach

employee can choose to do part time courses. ) part of the total fee of pre$

approved part time courses is reimbursed on completion of each phase

C)re " Connecting earts and ;inds of its team members is important. It is

e&ually important to build a relationship with the family members of their team

members. Avery year the D2amily /ayE is a red letter day when they welcome

family members of all ages to their office premises. 2un activities, contests

followed by a grand lunch are a part of the day.


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Their employee policies are designed keeping in mind the Care element. 2le1ible

-orking ours, Aducation sponsorship, ;edical and other Benefits have gone a

long way in engaging the team members at CIBIL. Career Counseling and Industry

e1perts giving CIBILI)'s an outside perspective as a part of grooming also forms

a part of the agenda.

Comm(*!)to*:

CIBIL believes in the power of open communication.

ere, employees are encouraged to share their ideas and inputs, information isshared freely and conflicts are openly discussed and worked through. The 0$way

communication culture leads to contribution of ideas and suggestions towards

incomparable business growth. CIBILI)'s are updated with elevant, Timely and

)ccurate Communication through various mediums.

There are also a lot of celebrations that take place in CIBIL. 9uch celebrations

encourage the employees in every aspect.

DCelebrate what one wants to see more of.E

Celebrating forms a large part of life at CIBIL. @ccasions big and small are

celebrated with fervor and CIBILI)'s are encouraged to participate.

These events are a part of the E%prt the Avents Calendar which is designed

and rolled out at the beginning of the year.


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CHAPTER 7: #E#BERSHIP IN CIBIL

7.1 Be!ome ) mem$er:

CIBIL#s vast repository of credit information augments their credit underwritingand portfolio management efforts. ;embers have access to consumer and company

Credit Information eports, Credit 9cores and a host of value added tools that help

them constantly monitor their portfolio8 right from ac&uisition to collections stage.

CIBIL ;embers benefit by an increased ability to identify lending opportunities

and keep non$performing assets in check8 thus strengthening the basic foundation

for business success.

7.2 Be*e&t% o& #em$er%5p:

R%0 #)*)-eme*t %ol(to*% &rom CIBIL o&&er% ot5er $e*e&t% )% ;ell:"

• O$/e!te Credt De!%o*% a shift from relationship$based to

information$based lending leads to accuracy in providing lending terms that

suit a consumer#s payment track record and ability to take on additional

leverage while mitigating the conse&uences of adverse selection

• F)%ter Credt De!%o*% Anhances a credit institution#s ability to e1pand

while maintaining credit portfolio &uality

• Speed )*d Co%t ?se of CIBIL CIs will make processing of home loans

faster and cheaper by eliminating the need to additionally research and

verify borrower details. This will result in improved profit margins due to

lower cost of processing.


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• D&&ere*t)l Pr!*- ;embers can differentiate between good borrowers

and defaulters. In an increasingly commoditi=ed credit market, credit

grantors will be able to use price in order to differentiate their loan products.

Re-(l)tor+ Compl)*!e:

• ;oreover, becoming a ;ember of a credit information bureau ensures their

organi=ation#s compliance with the Credit Information Companies

*egulation+ )ct 0!!:. The )ct stipulates that all the credit institutions

including 'B2C#s, banks and other financial institutions should be a

member of a Credit Information Bureau.

7. #em$er%5p El-$lt+ Pro!e%%:

Eligibilit

CIBIL ;embership is available to the following institutions3

• Credt I*%tt(to*% *banks, Bs, Co$operative bank , 'B2C, (ublic

2inancial Institution, ousing 2inance Institution etc. companies engaged in

the business of credit cards and other similar cards and companies dealing

with distribution of credit in any other manner or )*+ ot5er *%tt(to*

;5!5 t5e Re%ere B)*0 m)+ %pe!&+, from time to time, for this purpose+

• I*%(r)*!e Comp)*e%

• Comp)*e% prod*- !ell(l)r or telep5o*e %er!e%

• Credt R)t*- A-e*!e%

• A%%et Re!o*%tr(!to* Comp)*e%


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• Tele!om Comp)*e%

Hhat is the process to beco&e a Be&ber o% (I$I*

•

The potential ;ember will need to provide a single point of contact forCIBIL *a nodal officer+.

• The nodal officer will need to submit3

o 9elf$attested *signed by an )uthori=ed 9ignatory and stamped+ audited

financial statements for the most recent financial year *Balance 9heet

> (>L 9tatement or )nnual eport+ along with a

o 9elf attested Certificate of egistration from the appropriate

regulatory authority *eserve Bank of India, 'ational ousing Bank,

overnment of India, etc+.

The physical copies can be couriered to the address of Credit Information

Bureau *India+ Ltd.

• @nce documentation is complete they provide one with the costs associated.

• ?pon completion of all the formalities CIBIL will provide one with a

;ember Mit. The ;ember Mit will provide one with vital information that

will help one begin using services.


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CHAPTER : USE OF CIBIL IN BANK LOANS

.1 Po%t re&le!to*:

ere is a checklist of things one must ponder over once one have elevated their

credit score to :! or more$

• Meep balances low on their credit cards

• ;ake timely repayments towards their credit cards and loans

• ;aintain a healthy mi1 of secured as well as unsecured credits

• ;ake wise choices in future loan applications

Corrective measures can improve their credit score as it is not set in stone. )lways

maintain a good CIBIL score as it proves one are creditworthy. 'ot just banks and

financial institutions but employers also check credit scores of their future

employees. ence, it would hold one in good stead to keep a constant tab on their

credit scores and make sure their financial behavior always results in the

maintenance of high scores on their Credit Information eport.

'ow let#s compare 0 banks and their re&uirements for the CIBIL score for a home

loan. The two banks which they are taking into consideration are 9tate Bank of

India and /2C bank. 9ome of the major re&uired fields are seen and studied.

.2 18CIBIL S!ore ReG(red &or SBI Home Lo)*

45+ do o*e *eed ) -ood CIBIL %!ore to )ppl+ &or SBI 5ome lo)*=

There are several reasons why a good CIBIL score is an advantage for 9BI home

loan3


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• ) good CIBIL score above :! will ensure that their home loan is approved

&uickly without any hassles.

•

) good CIBIL score might get one lesser interest rates.

• ;ore loan choices.

• @pportunity to negotiate.

CIBIL %!ore &or Home Lo)*:

ome loans are granted for individuals to purchase or build a house. The property

is mortgaged to the lender until the loan is repaid completely. Besides their

eligibility and ability to repay the loan, CIBIL scores are one of the most important

parameters considered by lenders while granting home loans. ) good credit score

will ensure one get approved for a new housing loan without any hassles. Banks

and credit institutions use information gained from CIBIL scores to determine if

the applicant is eligible and reliable enough to avail the loan.

SBI Home Lo)*:

9tate Bank of India is an Indian public sector bank and financial service company.

It has a 0!N market share in loans and deposits among Indian commercial banks.

9BI offers a range of personal loans, home loans, auto loans and other kind of

loans.

9BI offers home loans at attractive interest rates. It has different home loan plans

to suit the needs of its customers. Listed below are the home loan plans offered by

9BI.


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Do!(me*t% reG(red &or SBI 5ome lo)*:

• (roof of identity

• < passport si=e photograph

• License

• (roof of residence

• Bank account statement

• Completed loan application

• (roperty ta1 receipt

• (ersonal )ssets statement

• IT ()' card

• @riginal salary certificate from employer


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• T/9 certificate on 2orm "5

Be*e&t% o& SBI Home Lo)*:

There are a lot of reasons to choose an 9BI ome loan. Listed below are some ofthe benefits.

• )ttractive interest rates.

• Loan amounts up to s."! crore.

• ome loans for rural residents.

• ome loan for 'Is.

• Aasy loan approval process.

• Aasy documentation.

It is very important to maintain a good CIBIL score to ensure that one can avail the

9BI home loan without any complications and enjoy the benefits offered by 9BI

home loan.

. CIBIL S!ore ReG(red &or HDFC Home Lo)*:

CIBIL 9cores are used by banks or lenders to check the creditworthiness of loan

applicants or borrowers. ) CIBIL score of :! and above is considered to be verygood.

/2C, just like any other lender, checks applicants# scores from the Credit

Information eport *CI+ developed by CIBIL. Based on the credit score they


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decide if the applicant should be granted a loan. If the credit score is low, the bank

can still grant one loan at a higher rate of interest depending on the information

available in the applicant#s credit information. The more creditworthy one are, the

less a negative score affects their chances of being approved for a loan. /2C

checks their eligibility based on their gross monthly income, loan tenure and the

rate of interest and if the applicant has other A;I#s outstanding.

T+pe% o& Home Lo)*% o&&ered $+ HDFC

ousing /evelopment 2inance Corporation */2C+ as the name suggests provides

housing finance as its core business. /2C is the leading provider of ousing

2inance in India. Though they have diversified to cater to different needs through

the different phases of one#s life, the focus is mainly on housing. It has fulfilled 7.

million dreams over the last < and half decades.

/2C provides home loans starting at an attractive interest of .!N p.a. *subject

to change+ whereby A;Is can be as low as s.K" per lakh *subject to conditions+.

/2C offers the following types of home loans. Indian esidents are offered home

loans for the following purpose3

• To buy a new house or a flat and bungalow from developers.

• /2C also lets one purchase resale homes that suit their re&uirements.

• To construct their own home

• To transfer outstanding home loan balances from other banks to /2C to

avail the benefit of paying low monthly installments, customi=ed repayment

options and attractive interest rates.


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• To renovate or upgrade homes, /2C offers ome Improvement Loans.

• To e1tend houses, /2C offers ome A1tension Loans.

• To buy a plot of land, /2C offers (lot Loans.

• To individuals who have set their eyes on a new house but have to wait till

the old house is sold to make the payment, the /2C bank offers 9hort

Term Bridging loans to provide funds re&uired to purchase the new house

until the old house is sold.

• To agriculturists who wish to own a house in the rural or urban area, /2C

offers ural ousing 2inance. 9alaried and self$employed persons can also

avail this loan if they wish to own a space in their hometown that is in these

areas.

'I#s also can avail home loans from /2C to own their own space in India. 9o,

applicants need to keep track of their CIBIL score and check how worthy they areto the lenders. )pplicants, at all times, must try and keep their credit score as high

as they can. They can do so by never being late in making their payments and by

keeping a balance between the secured and unsecured loans. If a good CIBIL score

helps applicants avail home loan from /2C, a leading lender in India, it stands to

reason that future credit will also be easy to avail from /2C or other lenders.

S0pp*- P)+me*t% !)* A&&e!t Credt S!ore:


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)n individual#s CIBIL score is derived from data submitted regularly by various

banks and financial institutions. )s such, maintaining a good CIBIL score is not an

easy task. )ny slip on their part while repaying credit can have drastic effects on

their overall CIBIL score.

Though there are various underlying principles when calculating CIBIL score, loan

A;Is and credit card bills form the backbone of the calculations. Credit scores are

calculated on the basis of complicated algorithms, and emotions do not figure in

the formulations. ;issing on payments for any reason whatsoever can adversely

impact their credit score.

CIBIL S!ore Lmt%:

The Credit Information Bureau *India+ Ltd is the credit rating agency that provides

CIBIL reports and scores. )ccording to data released by CIBIL, about !N of all

passed loan applications have been toward individuals with a CIBIL score greater

than !!. Avidently, maintaining a decent CIBIL score is imperative for one to

avail more credit.

)lso, as banks and other financial institutions move toward credit$risk based

calculations for interest rates, having a high CIBIL score puts one in a strong

position when re&uesting new credit. Banks are likely to offer one preferential

interest rates if their CIBIL score is high enough.

CHAPTER : #YTHS AND


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.1 CIBIL #+t5%:

Astablished in the year 0!!! with the aim of ensuring sustainable credit growth in

the country, CIBIL or the Credit Information Bureau of India Limited is a creditinformation company which maintains a record of individuals# loans and credit

cards. The information collated is used to generate Credit Information eports

*CI+ and credit scores which, by and large, are an indicator of individuals#

abilities to repay loans and credit card payments.

CIBIL aims to bring in more transparency to the loan approval process in the

country, in those customers now have an understanding of the seminal factors

which lenders analy=e to gauge creditworthiness. CIBIL reports, generated on a

monthly basis *as mandated by the BI+, help lenders evaluate and approve or

reject loan applications, as the case may be. owever, there are several myths

associated with CIBIL which need to be busted.

9ome of the common myths associated with

CIBIL are the following3

• CIBIL m)*t)*% ) re!ord o& de&)(lter%

)ny customer who has opted for a loan or credit card will find details of his

credit history with CIBIL but many wrongly believe that CIBIL has a record

of defaulters. The truth is information about an individual#s credit history is

collated to help him make informed decisions and avail cheaper loans. It is,

by and large, the prerogative of the bank or financial institution to evaluate

the CI and credit score on the basis of their credit policies.

• CIBIL % me)*t to %(pport $)*0% )*d &*)*!)l *%tt(to*% o*l+


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CIBIL reports and scores not only help banks make financially viable

decisions but also enable customers maintain financial discipline and

thereby increase their chances of loan approvals. CIBIL scores, therefore,

make the process of loan approvals less opa&ue. Customers can avoid loan

rejections owing to lack of a healthy credit history or missed payments since

it reflects on their CIBIL score.

• CIBIL % &(ll+ )(t5or,ed to m)0e !orre!to*% * *dd()l%' !redt

report

CIBIL is not authori=ed to make any changes to an individual#s report unless

approved by a bank or financial institution. CIBIL can, therefore, only help

facilitate the process.

• Lo; CIBIL %!ore No lo)* or !redt !)rd &or t5% l&etme

There are several lenders in the market with varying credit policies. Chances

are that their loan application may be rejected by one and accepted by

another. owever, if one have a low credit score, one may have to bear the brunt of high interest rates and charges.

• Lo; CIBIL %!ore% d)m)-e o*e'% !redt %t)*d*- &or 0eep%

) low CIBIL score is not set in stone. CIBIL scores will change as and when

their credit history improves. )lso, since banks and financial institutions

re&uest a CIBIL score only while evaluating an individual#s loan application,

they will have access to updated information.

• CIBIL %!ore% )re )&&e!ted $+ )%%et%*e%tme*t%

) CI comprises details pertaining to loans and credit cards. It does not

factor in a customer#s investments, savings or current account. 2or instance,


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bounced che&ues do not adversely impact one#s credit score. owever, a

missed A;I or credit card payment will affect the credit card score.

• CIBIL %!ore% )re t5e o*l+ determ**- &)!tor &or e)l()t*- lo)*

)ppl!)to*

CIBIL score helps banks assess risks and as a result enhance operational

efficiencies and lower costs. In addition to their underwriting policies,

lenders take into account several factors such as the income of the borrower

among many others.

• Appl+*- &or lo)*% le&t> r-5t )*d !e*tre % $)d &or t5er !redt %!ore

;any believe that applying for loans from multiple lenders increases the

likelihood of ac&uiring a loan. owever, several lenders checking out their

credit history adversely affects their CIBIL score as part of a Hhard# in&uiry.

It is, therefore, important to ensure that one do not apply for loans

simultaneously from multiple lenders.

• Jero !redt % de)l

Lenders typically look for responsible credit behavior and regular payments

rather than no credit or loans. ) proven clean track record is the ideal

scenario than no credit history at all.

CIBIL score is generic in that it can be used for several transactions such as home

loans, credit cards, personal loans and car loans among others. CIBIL score can beused by banks during all stages of the credit lifecycle *approval, account

management, collection and so forth+.


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.2 CIBIL


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Mnow what their Credit Information eport consists of, so one will know what

possible discrepancies one have to look for. ) CI is a record of their credit

payment history that is compiled from the information their lender provided to

CIBIL. The report consists of their basic information, details about credit facilities

one have availed, past payment history, amount overdue, current status and

in&uiries made. CI includes3

• 9anctioned amount will be the loan amount that was disbursed to one by

their lender.

• Current balance is the amount one othey to their lender. Meep in mind that

the lender will take

update it on CIBIL.

• A;I amount is the monthly installment that one have to pay on the

sanctioned loan.

• The actual payment amount is the amount that one has paid against the

amount due.

• )mount overdue is the amount that is not paid against the due amount.

• epayment tenure is the term for which one has taken the loan.

•

Collateral is the asset one has kept against the loan as a security.

• Credit limit is the available credit in case of credit card or an overdraft

facility.

• Cash limit is the cash that one can withdraw using the credit card.


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• igh credit is the highest amount that has been billed against a credit card or

an overdraft facility.

•

/ays past due is the number of days that a payment was late after the date of payment.

• 'on$performing assets are the payments made within ! days after the due

date.

• An&uiry is added on their report every time a lender accesses their credit

report from CIBIL.

• Control number the number that is created for every CI.

• @wnership if it is a joint or if a guarantor is present of is authori=ed user is

mentioned.

• -ritten off and settled status will be mentioned. It also includes the written

off total and principal amount.

These are some of the important things that will be mentioned in their credit report.

Look for discrepancies and make sure that all the information provided is accurate.

I*t)te ) d%p(te: If at all one find a discrepancy in the Credit Information

eport, one can initiate a dispute with CIBIL. The easiest way to do that is to

submit a duly filled online dispute form. Meep in mind that one cannot raise adispute for the following3

• Control number

• ;ember name unless it is an ownership dispute


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• )ccount number unless it is an ownership dispute

• /ate reported

• An&uiry date

D%p(te Re%ol(to* Pro!e%%:

• 2irst recogni=e the discrepancy.

• 9ubmit the online dispute form

• The relevant section of dispute is marked as H?nder /ispute#

• The dispute is taken up with the concerned lender based on the type of the

dispute.

• Then, the lender either accepts or rejects the dispute.

• If the dispute is accepted, the corrections are made.

• 2inally, the H?nder /ispute# remark is removed from the concerned section.


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to the ;anager of Consumer 9ervices. @ne will generally receive a response

within "! business days from the date of submission of the grievance. Meep

in mind that one will be re&uired to have a valid service re&uest number to

escalate an issue. This number is generated whenever one have any

interaction with CIBIL.

• Ascalate level 03 If one are not satisfied with the level " response, one can

escalate their concern to )ssistant Fice (resident of Consumer 9ervices

through an online form. It takes "! business days for one to get a response.

Bear in mind that one will need to have a valid service re&uest number and

the online grievance I/ level " which will be generated on successful

submission of Level " escalation of the issue along with their personal and

escalation details.

• Ascalate level


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CHAPTER ?: INTERIE4

2or further information, the interview was conducted. The primary data is

generated from the detailed study of the CA/IT I'2@;)TI@' B?A)? @2

I'/I) LT/ *CIBIL+ by visiting the field and interacting with an employee ;r.

)mit ;ehendale and ;r. )poorv ;ahajan *)ssistant ;anager+, 'ariman (oint.

2ollowing are the few fre&uently asked &uestions which I came across after the

detailed study of CIBIL3

Ho; to mproe CIBIL !redt %!ore=

CIBIL score or credit score is an important factor in determining whether one will

be approved for a loan or not.

CIBIL scores are generated based on their credit history which includes past credit

taken and payment patterns in relation to them. ) high score represents strong

creditworthiness while a low score indicates low creditworthiness. Low scores will

make one a risky borrower and lenders will be hesitant to approve their loan

application.

A!!ord*- to +o( )% CIBIL> ;5)t % ) -ood CIBIL %!ore=

-hile applying for loan, many people do not reali=e they have a low score until

informed of the same by a lender who rejects their application.

)lthough there is no set score, a good CIBIL scores is anything in the range of :!

and above and a green signal for banks to consider approving their loan

application. )nything below


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history, one can improve it by following the steps given to one. @ne the other hand,

a score above :! can sanction their loans.

A*+ %tep% &or mpro*- !redt %!ore =

;ost often people are taken aback by the fact that they have a bad score and they

wonder how to improve credit or CIBIL scores &uickly or immediately. owever,

one has to understand that fi1ing their credit reputation takes some time and effort

and there are no &uick$fi1 solutions. ere are some ways by which one can get

their scores up.

•Do*'t )ppl+ &or &re%5 !redt: )s soon as one find out one have a poor

credit score, do not apply at another bank for a loan right away. The more

in&uiries a lender puts in to CIBIL about their score, the lower it goes. old

off for a while or obtain their credit score theirself. This will be considered a

soft in&uiry and can be used for new applications without creating a negative

impact.

• Improe p)+me*t p)tter*% o* e6%t*- de$t: To rebuild their history, make

timely payments on current debt. Ansure outstanding dues are paid off in

full. @ver time this will reflect positively on their CI. (rovide standing

instructions to have dues debited automatically from their account. This will

reduce chances of missing payments.

• B)l)*!e t5er de$t port&olo: If one mostly own unsecured debt, try to

discharge this as early as possible. 9ecured loans impact their score more

favorably. If one must have unsecured loans, ensure it#s kept to a minimum.

) higher amount of unsecured debt indicates a need for funds for personal


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purposes thereby casting a shadow on their ability to generate sufficient

income to save or create disposable income.

• U%e !redt ;%el+: /on#t use up their entire credit limit or too much of

available credit. ?se up to :N of their approved credit limit on their credit

cards. This will indicate calculated spending which is a positive thing. 'ot

using credit at all can also have a negative impact. -ithout any credit

history, there will be nothing to build a positive score on.

• C5e!0 &or d%!rep)*!e% * t5er !redt report: 9ince their credit score is a

reflection of what is recorded in their report, it is advisable to check for

discrepancies. 9ometimes, a member bank or financial institution sends

across incorrect information to CIBIL. If this is the case, one can approach

the said bank or institution and have them correct this. Ansure all data on

positive and timely payments are recorded and submitted by their lender to

CIBIL.

• Co*%old)te de$t: If one have multiple debts, managing this becomes &uite

difficult. By consolidating and paying off much debt through one

consolidation loan, it will be easier to track payments thereby reducing the

chance of a missed payment. In many cases, debt consolidation loans can

actually be availed at a lower rate of interest than the interest one pay on

e1isting loans. This will also make it more affordable for us.

• C5e!0 t5er %!ore re-(l)rl+: Aven as one try to improve their credit history,

keep a check to see where one stand and how much their score has increased

by obtaining their credit report at least 0 or < times a year. @ne can study


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their report to ensure it is building up as re&uired. )ny variances can be

corrected at the earliest.

Increasing their CIBIL score is not an easy task, even if not impossible. It is

necessary, though, to remember that one will need to be patient. It may take a

couple of years at least to get their CIBIL credit score up to :! at least. But with

concentrated effort and ade&uate financial discipline, this can be easily achieved.

The most important thing to do once one has reached their goal is to maintain a

good credit score by not falling back on payments or stacking up too much credit.

C)* +o( -e )*+ tp% &or mpro*- t5e !redt %!ore=

) low CIBIL score can be a large hindrance while applying for a loan or a credit

card. Today, CIBIL credit scores are one of the first things that lenders look into

before granting loans to applicants. ) good CIBIL credit score is the indication of a

financially stable individual. ) good CIBIL score is not the result of =ero credit

activity. In fact, low credit activity also results in a low CIBIL credit score.

In times of great need for credit like when one need a home loan to buy their dream

home or a car loan to buy their first car, a low credit score can result in the

rejection of their loan application. ;aintaining a healthy score is a just a matter of

due diligence and systematic discipline. It is not an impossible job.

2or those who need to increase a low credit score, here are some steps to ease the

burden of a low CIBIL score.

1. F*d o(t t5er !(rre*t CIBIL %!ore

2ind out their current CIBIL score in order to set off on the path of rectifying it. )n

individual has the right to view his4her CIBIL credit score at least once a year in

order to confirm his4her financial health. ) Credit Information can be re&uested for


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on the CIBIL website. @ne will be re&uired to submit their MPC *Mnow Their

Customer+ documents and s.7! on the website. Their application will go through

an online authentication process, post which their CIBIL score will emailed to their

registered email I/. @ne can then download the scores instantly.

2. Be ope* to !5)*-*- t5er !redt $e5)or:

@nce one knows that their CIBIL credit score is low, one has to be open to

changing their credit behavior. This can be done by being proactive in rectifying

their score if it is below :!. In order to begin rectifying their credit behavior by

accepting that some of the things one have been doing are wrong and have

contributed to their low credit score.

. C5e!0 & t5e )!!o(*t *&orm)to* pert)*% to o*e:

Check if the following account information provided in the Credit Information

eport is accurate. )ll these things given below are mandatory.

• Bank account details

• Loan details

• Credit Card details

• Their identity

• 9tatus of accounts

• /(/ or days past due in each credit card and loan one have availed

• -ritten off flags


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• 9ettled flags

/ays past due is the number of days a payment is due on an account in the

respective month. /(/ above H!!!# has a negative impact on their CIBIL credit

score.

2lags are an indication of their past defaults and could result in a low credit score.

3. Ide*t&+ ;5ere o*e ;e*t ;ro*-:

) CIBIL credit score is very handy as it categorically lists out all their mistakes. It

is, therefore, imperative that one learn how to read a Credit Information eport.

@nce one learns to read their Credit Information eport, one will be able to find

out where and why their score is low. @ne must remember to check all the account

information pertains to one before finding out where the fault lies.

9. Error% * ) report:

There could be discrepancies in the reporting process when their bank gives

information to CIBIL. 9uch errors, could in effect, lower their score. In order to

rectify these kinds of errors one will have to raise dispute using CIBIL#s dispute

re&uest form on the CIBIL website. @nce one raises the re&uest, the dispute

resolution cell of CIBIL will contact the credit institution pertaining to their loan.

report generally include any of the following$

• )ccount balances

• @verdue amount after repayment of loan

• Closed loan account continues to appear in their Credit Information eport


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• Identity theft

• /etails of a loan that one have not availed at all

7. Impro*- t5er %!ore:

@nce one have identified their mistake, build a strategy to amend their score. 2ind

ways to pay their unpaid debts, outstanding amounts or even settled amounts. In

case these amounts are not paid off, good credit behavior on new accounts will not

increase their score. In some cases, scores improve even with the e1istence of

unpaid debt. In this situation, lenders will take into consideration all the negative

flags against the unpaid credits while appraising their loan application.

. Spe)0 to t5er !redtor%:

) good strategy to elevate their credit score is to speak to their creditors and come

to an understanding as to how one will clear their debt. /iscipline, diligence and

cutting corners will enable one to pay off all their debts.

)ll these above mentioned steps are to be followed to maintain a good credit score.;aintaining a good credit score is important for the individuals as they don#t want

to get tagged as risky customers. ood credit score will fetch them bank loans

properly. ence, maintenance of this credit score is necessary.

From ;5ere doe% CIBIL -et t% *&orm)to*=

It#s important to note that CIBIL is merely a database that processes a credit score

with information that it receives. It does not contribute anything to lower or raise a

score. The parties that are involved in giving CIBIL their information are the banks

and lenders whom you#ve done business with.


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CONCLUSION

• ;inimi=es the default risk

CIBIL is the first such credit rating company in India who allows the banks to

sanction the loans of the individuals or partners whose credit score is above a

particular re&uirement of certain banks. enerally it has to be :!Q. It gets reduced

in case of default of payments and vice versa.

• elpful for both the parties

The purpose of setting up CIBIL is thus very clear and helpful to both consumers

as well as banks. CIBIL certainly affects various sectors as well in a positive way

like its employees, society etc.

• (lays a critical role in Indian 2inancial 9ystem

ence from all the above information, one can say that CIBIL was created to play a

critical role in India#s financial system, helping loan providers manage their

business and helping consumers secure credit &uicker and on better terms. It thus

helps to maintain financial and economical stability in the nation.

• 'ot much popular

CIBIL is not that well$known today as it has been set up in recent years, but use of

CIBIL will surely be helpful for the further development of the nation.


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• ;inimi=es the load on banks

CIBIL reduces the load on banks by rating the people on the basis of their

credibility and then passing the same

cibil project

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