With the Reserve Bank of India (RBI) introducing stringent credit regulations, individuals seeking personal loans in the new year may face increased hurdles. According to a report by TOI, updated guidelines now require lenders to report borrower activity to credit bureaus every 15 days, replacing the earlier monthly reporting schedule.
Also Read: Comprehensive Guide to Employer Payroll Taxes,Key Insights for Compliance and Efficiency
Faster Reporting to Reduce Lending Risks
The revised framework, effective January 1, aims to improve lenders’ ability to assess borrower risk by reducing delays in credit data updates. Sachin Seth, Chairman of CRIF High Mark, stated that more frequent reporting minimizes data lags that could extend up to 40 days under the previous system. This allows lenders access to real-time insights, ensuring better credit evaluations.
Curbing Over-Borrowing
The new regulations address the issue of individuals obtaining multiple loans from different lenders, often exceeding their repayment capacities. SBI Chairman C.S. Setty highlighted how frequent updates would deter over-borrowing and promote responsible lending. He emphasized that this approach offers a clearer view of borrower behavior, enabling lenders to make informed decisions.
Also Read: Top 10 Small Business Ideas for Aspiring Entrepreneurs in 2025
Preventing Risky Practices Like Evergreening
Frequent reporting also mitigates risks associated with “evergreening,” where borrowers take new loans to repay existing ones without proper risk identification. By halving the reporting interval, credit bureaus and lenders can gain a more accurate understanding of borrowing patterns. This fosters better decision-making and strengthens the lending ecosystem.
The RBI’s move is expected to promote transparency, reduce default risks, and create a healthier credit environment for all stakeholders, ensuring more responsible lending practices in India.
