RBI pushes for real-time credit reporting to boost transparency and consumer experience

Since January 1, lenders are reporting credit data once in 14 days, an improvement from the earlier system of monthly data submission.

“We must aspire to more frequent updates,” Deputy Governor M Rajeshwar Rao said.

“This shift requires investments in technology, process reengineering, and change management. But the rewards – transparency, efficiency, and trust, far outweigh the costs,” Rao said Tuesday in Mumbai at an event organised by TransUnion CIBIL.

Meanwhile, a grameen credit score system is on the anvil aiming to improve access to formal credit for rural populations, including farmers and marginalized communities, the deputy governor said. This score will be in addition to the existing credit score and will be specifically designed to enhance financial inclusion in rural areas, particularly for members of self-help groups (SHGs).

While the data filing eco-system has been upgraded, Rao underscored the need for data accuracy, data security, and model risk to address the challenges in the effective deployment of data-driven systems. “Inaccurate or incomplete data can undermine the reliability of analytical outputs and decision-making processes, while poor data security can expose organizations to breaches, resulting in legal liabilities and reputational damage,” he said.To be sure, higher use of the complex AI and machine learning models has already increased concerns over model risk, especially when these models are not thoroughly tested, validated, or monitored for biases and performance drifts.

“Rigorous validation protocols, continuous monitoring, and robust governance frameworks are essential to ensure that these models remain fair, transparent, and aligned with regulatory and ethical standards,” Rao observed, adding that steps need to be taken to protect individual’s rights regarding the use of their personal data.