The Reserve Bank of India (RBI) is steering a quiet revolution in the way credit information is reported and used in India. In a move that could significantly improve financial transparency, consumer experience, and credit access, the RBI has emphasized the need for real-time (or near real-time) credit reporting.
Now, lenders report borrower information to credit bureaus every 15 days, a giant leap from the earlier monthly interval. But RBI Deputy Governor M. Rajeshwar Rao, in his recent speech at the TransUnion CIBIL Annual Credit Information Conference (July 2025), made a strong case for going one step further. Real-time credit reporting is the next logical step towards creating a strong and vibrant credit ecosystem, says Rao.
Let’s deconstruct what this signifies, what’s altering, and how it may restructure credit availability throughout India.
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Why Real-Time Credit Reporting?
In its essence, credit reporting is transparency and faith. When a borrower pays off a loan, settles a credit card, or goes on EMI default, that data streams to credit information businesses (CICs) such as CIBIL, Experian, CRIF High Mark, or Equifax. Lenders make choices based on such reports.
With the current fortnightly update model, there’s still a time lag. A loan repaid on July 5 may not show up until July 15 or later, leading to outdated reports and friction for consumers.
RBI’s proposal for real-time credit reporting seeks to fix this.
Key Benefits
- Faster data updates: Reduces inaccuracies in credit reports and avoids mismatches.
- Better underwriting: Lenders can assess risks using the most current data.
- Enhanced consumer experience: Borrowers experience improved credit scores more quickly.
- Early fraud detection: Instant updates to data enable near-instant identification of suspect lending behavior.
What’s Propelling This Sprint?
Technological Readiness
With core banking systems, fintech APIs, and bureau infrastructure increasingly sophisticated, real-time data sharing is no longer fantasy. AI and machine learning algorithms also love new, granular data.
Financial Inclusion Objectives
A key impetus for this effort is inclusive credit access. Indians—particularly rural Indians—are still excluded from the formal credit system because they have thin or no credit files.
Regulatory Vision
The RBI has launched a Uniform Credit Reporting Format (UCRF) and revised guidelines in 2025. These measures aim to normalize reporting and signal the way toward real-time pipelines.
Alternative Credit Scoring
The RBI is also testing out new credit scoring models that transcend conventional bureau data, such as the “Grameen Credit Score” proposed for SHGs and informal consumers.
The Inclusion Angle
It’s not all about accelerating data at RBI. It’s about making sure the underbanked can access credit.
A lot of people, particularly rural Indians, lack the kind of formal credit history that today’s models demand. RBI wants to do away with this by nudging the use of alternative data:
- SHG activity history records
- Utility bill payments
- Mobile usage
- Micro-loan repayments
- Agricultural transaction histories
RBI is also looking at establishing a Unique Credit Identity Number, which would consolidate borrower credit information across systems and cut down on duplication.
This would be a game-changer for rural women entrepreneurs, gig workers, and others who’ve long been out of sight for formal lenders.
Challenges to Implementation
While the benefit is real-time credit reporting, there are implementation challenges as well:
Technology Infrastructure
Lenders and CICs will have to spend significantly on systems that can push and process data in near real-time.
Data Privacy and Security
The faster data travels, the more exposed it is. RBI will have to make stricter cybersecurity norms.
Process Alignment
Guidance and support will be required for small NBFCs and cooperative banks to implement new protocols.
Cost of Compliance
Real-time reporting is more than an IT enhancement—it requires process reengineering and staff training.
What’s Already Happening?
January 1, 2025: RBI made mandatory reporting of borrower credit data by all regulated entities to CICs on a 15-day frequency instead of the previous frequency of one month.
July 2025: Deputy Governor Rao stressed that the sector needs to shift towards real-time credit reporting.
2025 and beyond: RBI is working on developing the Uniform Credit Reporting Format (UCRF) and seeking consultations on implementing the Grameen Credit Score and other innovations.
What’s Next?
- Trial programs are expected to be implemented with fintechs and NBFCs testing real-time reporting.
- Grameen score tests may start soon, particularly with SHGs that are already participating in micro-finance initiatives.
- Fintech collaborations can accelerate the use of real-time integrations.
- Public credit literacy and education efforts can reinforce the technical change.
FAQs
Q1: Will real-time reporting affect my credit score more quickly?
Yes. Repayments or closures will show up in your credit report virtually instantaneously with real-time or near real-time reporting, helping to speed up your score.
Q2: Does this imply that lenders will approve loans quicker?
Potentially, yes. The use of more current data allows lenders to make more precise and quicker decisions, cutting processing times.
Q3: How is this assisting individuals without a credit history?
RBI wants to add non-traditional sources of data such as SHG records, utility bills, and mobile payments—enabling those with no credit footprint access to credit.
Q4: Is real-time reporting compulsory currently?
Currently, fortnightly reporting is mandatory (from January 1, 2025) and real-time is a target under discussion but not yet enforced.
Q5: Will small banks and NBFCs be able to implement this with ease?
They may require time and hand-holding. RBI and industry associations are likely to provide guidelines and common infrastructure models to facilitate the shift.
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