In your interest.
Online Personal Finance Magazine
No beating about the bush.
Credit Sudhaar, a non-specified user entity, is accessing confidential credit records from CIBIL while claiming to help individuals improve and maintain their credit health. Why is the financial regulator, RBI, silent?
Credit Sudhaar, a firm set up by former bankers Gaurav Wadhwani and Arun Ramamurthy, says it has a tie-up with CIBIL for offering credit advisory services and will help individuals in improving their credit health which will in turn enable customers to get better offers from lenders at the CIBIL Market Place. What it does not say is it is neither registered with the Reserve Bank of India (RBI) as a non-banking finance company (NBFC) nor it is a specified user entity of CIBIL but will access credit records of crores of individuals.
While there is no word from CIBIL on this strange partnership, what is surprising is how the credit bureau may have allowed a non-specified user entity to access its database. In a press release, Credit Sudhaar said it is associated with Dipran Finance Pvt Ltd. However, on its website it mentions affiliation with Safe Capital, an NBFC. In an email reply, the firm said, “Credit Sudhaar is associated with both Safe Capital and Dipran. Both Safe Capital and Dipran are members of CIBIL”.
Even on its website under the FAQ section, replying to a question “Are you approved by the RBI?” it says “Yes. We are affiliated with Safe Capital which is an approved institution as per RBI charter”.
Earlier, Credit Sudhaar used to mention itself as an NBFC registered with the RBI, which was changed later.
This also means, Credit Sudhaar may be using either Safe Capital or Dipran’s login credentials to access the CIBIL database, especially the portfolio review which gives complete details of an individual. Since Credit Sudhaar is not a specified member entity of CIBIL, this violates Section 22 of the Credit Information Companies (Regulation) Act, 2005 (CIRCA), which says...
22. Unauthorised access to credit information.—
(1) No person shall have access to credit information in the possession or control of a credit information company or a credit institution or a specified user unless the access is authorised by this Act or any other law for the time being in force or directed to do so by any court or tribunal and any such access to credit information without such authorisation or direction shall be considered as an unauthorised access to credit information.
In addition, the CIRCA clearly defines a specified user who can register with a credit bureau as member entity. Section 2 (l) states “specified user” means any credit institution, credit information company being a member under sub-section (3) of Section 15, and includes such other person or institution as may be specified by regulations made, from time to time, by the RBI for the purpose of obtaining credit information from a credit information company.
Besides credit institutions, insurance companies, telephone services providers, credit rating agencies registered with Securities and Exchange Board of India (SEBI), a stock broker or sub-broker registered with SEBI, a trading member of recognised commodity exchange, SEBI and Insurance Regulatory and Development Authority (IRDA) are regarded as specified users under Regulation 3 of the CIRCA.
Let’s put it in simple words. Credit Sudhaar is just a specific services provider. CIBIL is allowing credit institutions and others to sell their loan products or other services on its Market Place. Credit Sudhaar is only registered on Market Place to offer “credit advisory” service for which the charges are Rs10,000 (it is mentioned as processing fees).
Both Mr Wadhwani and Mr Ramamurthy, the promoters of Credit Sudhaar had worked with Standard Chartered Bank and Citi. Both were also directors of SHAHA Finlease Pvt Ltd, an NBFC formed to buy bad assets from StanChart. On several occasions, the RBI, StanChart and the banking ombudsman had reprimanded SHAHA Finlease for its unprofessional conduct and unruly collection agents. Even on the Internet, there are number of complaints against SHAHA Finlease.
Our mails to CIBIL and the RBI remained unanswered till writing the story. We would incorporate their replies as and when we receive it.
NOTE: If you are facing similar issue, you may want to get help from Moneylife Foundation's free Credit Helpline http://www.freecredithelp.in/
Home loans from Oriental Bank of Commerce will now be available at 10.4% with an EMI of as low as Rs937 per lakh
New Delhi: State-owned Oriental Bank of Commerce (OBC) has reduced interest rate on home loans of up to Rs30 lakh by 0.1%, reports PTI.
As a New Year gift to customers, home loans will now be available 10.40% with an equated monthly instalment (EMI) of as low as Rs937 per lakh, OBC said in a statement.
The base rate or the minimum lending rate of the bank is also 10.4%.
Besides, the bank has also slashed margin for home loans above Rs20 lakh to 20%, it added. For loans below Rs20 lakh, margin will be 15%.
On the deposit side, the bank has waived off penalty on premature withdrawal on its fixed deposit schemes for all maturities.
Earlier this week, private sector HDFC Bank slashed its benchmark lending rates by 0.1%.
The base rate the bank was reduced to 9.7% from 9.8%. At the same time, the benchmark prime lending rate (BPLR) of the country’s second largest private bank was also slashed by similar margin to 18.2%.
Minimum lending rate, of HDFC Bank will come down to 9.7% from the existing 9.8% thus making loans cheaper for borrowers in new year
New Delhi: HDFC Bank has decided to cut its benchmark lending rates by 0.1%, making loans cheaper for its borrowers in the New Year, reports PTI.
The base rate, or the minimum lending rate, of HDFC Bank will become 9.7% from the existing 9.8%, sources said.
At the same time, the benchmark prime lending rate (BPLR) of the country’s second largest private bank is expected to be slashed by a similar margin to 18.20%.
The new rates would be effective from 1 January 2013, sources added.
HDFC Bank has become the first bank to cut lending rate ahead of Reserve Bank of India (RBI)'s quarter review of monetary policy on 29 January 2013. RBI has already indicated that it will consider reducing interest rate in the January review.
The central bank is closely monitoring the evolving growth-inflation dynamics and would update projections for 2012-13 in the third quarter review, RBI had said.
Looking forward, the central bank said, "the emerging patterns reinforce the likelihood of steady moderation in inflation going into 2013-14, though inflation may edge higher over the next two months".
The RBI in its December review left the short-term lending (repo) rate and the Cash Reserve Ratio (CRR) unchanged at 8% and 4.25% respectively.
The reverse repo, at which RBI absorbs excess liquidity through borrowings from banks, remained static at 7%.
HDFC Bank last reduced the benchmark lending rates by 0.2% in June.
Meanwhile, the bank also revised fixed deposit rates on select maturities from 15 December 2012.
Earlier this week, HDFC Bank raised about Rs1,400 crore from bonds to fund its business growth. The bank has allotted lower Tier II bonds for an amount aggregating Rs1,405 crore.
The bonds in the nature of debentures where issued on a private placement basis to investors.