Latest news with #GrameenCreditScore
Time of India
02-07-2025
- Business
- Time of India
RBI seeks 'borrower ID' to reduce credit score errors
RBI MUMBAI: RBI has mooted a unique, secure borrower identifier to avoid duplication and misreporting of data with credit bureaus, and to improve loan access for borrowers. "Credit information companies rely on credit institutions to provide accurate and validated IDs. Without this, duplication and misreporting remain risks. We must move towards a unique borrower identifier, which is secure, verifiable, and consistent across the system," RBI deputy governor M Rajeshwar Rao said in his keynote address at the 25th anniversary of TransUnion Cibil. He stressed the importance of better data practices for empowering borrowers. The suggestion comes as RBI pushes for a unified lending interface - a digital platform that lets lenders access verified borrower data. Much like UPI lets users send money to any bank, ULI allows multiple lenders to offer credit to a single borrower. Rao said that RBI is testing use of programmable digital rupees (CBDC) to give loans with restricted acceptance of the digital currency. This would start with a pilot for tenant farmers under the kisan credit card scheme. If successful, this could help extend collateral-free loans to small businesses, street vendors, and artisans, while creating digital records that make future lending easier. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Tinnitus: what this grandson discovered will surprise you Hearing Magazine Undo The deputy governor said that RBI has taken several policy measures taken to reduce information asymmetry, enhance data quality and improve customer satisfaction. These included free access to full credit reports, appointment of internal ombudsmen, and redressal frameworks linked to delayed corrections. With the introduction of the Data Quality Index and mandatory disclosures on wilful defaulters, he said, CICs are now more transparent and accountable. Rao also drew attention to the rapid expansion of digital infrastructure in credit delivery. "The convergence of Jan Dhan accounts, Aadhaar and mobile phones, popularly known as the JAM trinity, UPI and ULI, represents a significant advancement in India's digital lending infrastructure," he said. Rao noted the potential of alternative data, AI and machine learning in expanding access to underserved borrowers. "It seems that time is not far when alternative data will no longer be alternate, but it will be the mainstream," he remarked. Similarly, the proposed Grameen Credit Score aims to help SHG members and rural borrowers enter the formal financial system. Despite this progress, he struck a note of caution: "We must remain cognizant of the need for addressing issues around data accuracy, data security, and model risk." Responsible innovation, he said, must uphold the core values of integrity, transparency and public service. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
15-06-2025
- Business
- Time of India
Fuelling Growth: PSU banks told to boost credit to crucial sectors
The government is encouraging state-run banks to increase lending to productive sectors, particularly MSMEs, through targeted Mudra financing and identification of high-employment clusters. Loan melas are planned for retail customers, following the RBI's recent rate cut to boost private sector investment. The government is also finalizing the Grameen Credit Score to improve credit access for SHGs and the rural population. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads New Delhi: The government has nudged state-run banks to push credit in productive areas of the economy, including micro and small enterprises As part of various initiatives planned, banks will identify 50 high-employment clusters of MSMEs and push lending through sector-specific Mudra financing products. For retail customers, loan melas at bank branches are also being planned, said people familiar with the this month, the Reserve Bank of India (RBI) announced a 50 basis points rate cut, bringing the repo rate down to 5.50%. The repo rate is the interest rate at which the RBI loans money to commercial RBI has pegged the growth for 2025-26 at 6.5%, and with loans becoming cheaper after the rate cut, it is expected to fuel more private sector capital expenditure."We want banks to proactively support our MSMEs and self-help groups (SHGs) and align with the various other schemes announced in the budget," said an official requesting anonymity. Finance minister Nirmala Sitharaman is also expected to hold a performance review meeting of public sector banks (PSBs) later this month where the issue of pushing credit to important sectors of the economy without compromising on due diligence or underwriting standards will be discussed, said the above quoted this year, the government had approved the Mutual Credit Guarantee Scheme for MSMEs, guaranteeing loans up to ₹100 in the FY24 budget, the scheme is expected to facilitate the availability of credit for the purchase of plant, equipment and machinery by MSMEs and give a major boost to manufacturing."We are also finalising the modalities and contours of the Grameen Credit Score (GCS) in consultation with the stakeholders, and this will ensure more credit access to retail customers," the official said. Announced in the FY25 budget, GCS is tailored for the credit assessment purposes of SHG borrowers and the rural population, and will lead to access to formal credit for the rural population, including farmers and marginalised to a report by CareEdge Ratings, credit outstanding for scheduled commercial banks touched ₹182.5 lakh crore as of March 31, 2025, registering a growth of 11.1% y-o-y compared to 19.3% (including merger impact) in Q4 FY24. "As of March 2025, PSBs have gained market share in total credit, accounting for 53.8%, compared to 41.2% held by PVBs (private sector banks)," it said, noting that private banks have focused on managing their elevated credit-deposit or CD ratio.
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Business Standard
02-06-2025
- Business
- Business Standard
Grameen Credit Score framework likely to be launched in next 3 months
Grameen Credit Score designed to strengthen financial inclusion in rural India premium Harsh Kumar Asit Ranjan Mishra New Delhi Listen to This Article The Union government is expected to roll out the Grameen Credit Score (GCS) framework within the next three months, a senior government official said. Announced by Finance Minister Nirmala Sitharaman in the Union Budget 2025–26, the initiative is designed to strengthen financial inclusion in rural India, with a particular focus on members of self-help groups (SHGs). 'A committee has already been formed to oversee the development and implementation of the Grameen Credit Score framework. The government is currently awaiting approval from the Reserve Bank of India (RBI) before moving forward with the rollout and is expected to go
