Improper entries missing fields may cause data uploaded to credit bureaus to get rejected
Filing error
Banks and NBFCs say 5-6% of data may be lost due to such errors
Lapses may also occur if the data is not in a specified format or doesn't meet credit bureau's quality standards
Private banks have better data quality and around 80% data gets uploaded, but the PSUs have abysmally low levels of data updation
Khyati Dharamsi.
MUMBAI
Samir Walanjkar (name changed), an employee with a construction firm, was looking for a loan to finance his home repairs. But to his surprise, his loan application got rejected by two private sector banks that he approached.
On asking one bank as to why the request was rejected, he was told that he had not cleared his credit card bill for five months. He was shocked as he was out of a job for two months and couldn't clear the bill, but in the third month he had cleared it.
The reason for Samir's problem could be that the updated data showing him as having paid the credit card bill in the third month got rejected by the IT system. Banks and non-banking financial companies (NBFCs) told DNA Money that when they upload data onto credit bureaus, which maintain a database on loans given by banks and financial services companies, some portion of the data gets rejected.
"Some data doesn't get uploaded because something was missing in the mandatory fields. Then we correct it and sent it again. It then gets uploaded after one month. Sometimes the rejection rate is 5-6% of the total data uploaded," the credit head of a leading NBFC said.
Another senior official said that the level of data rejected differs from bank to bank. But rejection is higher in case of public sector banks. "Private sector banks have better data quality and around 80% data gets uploaded, but the PSUs have abysmally low levels of data updation. Some PSU banks having a large share of business and branches have as much as only 30-40% data that gets updated quality is not as per the global standards," he said.
This may be one of the reasons that in spite of paying back loans, the database maintained by credit bureaus doesn't reflect the true picture, experts say. V N Kulkarni, chief counsellor at Abhay Counselling Centre, "There are a good number of cases where people have a letter in hand but are still being featured as defaulters. There are people who have been told by banks that the data is updated, but recovery agents are still asking them to pay the money."
"Rejection is one of the reasons," says Kulkarni.
But why does the data get rejected?
"Data won't be uploaded properly if there is a missing field and it is possible as the data has to be fed in the correct form. Credit bureaus have strict data-quality standards," said the head of a car financing company.
Another person who uploads data a bank told DNA Money, "There are a lot of fields, which are to filled in before data submission to the bureau. Some are mandatory to be filled. Due to technical issues, the records submitted by us may not match. Some data is entered manually. Do, if a special character is entered in one of the columns by mistake, then it will not be accepted."
Asked about the problem, Arun Thukral, managing director at Credit Information Bureau of India Ltd (Cibil) - which is the only functional bureau as on date - says, "If the data was rejected as the bank had not populated the mandatory fields, then the record does not get uploaded. We cannot load as data will not get comprehensive and will be redundant."
Some of the mandatory fields are date of birth, telephone, PAN or passport number. One of these identifications are critical as multiple data on the same person need to be uploaded in the same file. "How do we know if a person is the same? If there is a common denominator then the record gets merged," Thukral says. "In case there is any data rejection, we share the reject data analysis with banks as to why it has happened, how and what they have to do to correct it. If there are any issues that banks are not able top resolve, our team goes to them. There could be issues, but it needs a resolution," Thukral said.
When asked about the percentage of data that gets rejected, without revealing any number, Thukral said, "This depends on bank to bank, the process of doing it at the credit giver's end. It depends on the quantum of data."
Asked how soon does the updated data get reflected, Thukral said, "95% of data get refreshed on a monthly cycle and the rest on a weekly basis."
But Cibil and the upcoming bureaus say that they are using sound-driven software system that help them eradicate the problem created by different ways in which people write their name, especially in India. Ajay Kumar can be written as Ajay K, A Kumar etc. With technology data phonetically matches by looking at how the name sounds, says Thukral. "We have a match-logic system evolved over a period. the system is automated. The match logic will work. We don't give you a report unless the date of birth and other details (of the person asked for) match."
Three other bureaus - Experian, Equifax and High Mark that have got license from Reserve Bank of India will soon launch operations in the country this fiscal. these credit bureaus act as a repository of data on loans and credit card debts. This data is fed onto bureaus by all member banks to check the repayment track-record of a person and the debt that he has from various banks.
No comments:
Post a Comment