What is incorrect reporting of a loan and how does it affect us?
Every financial and lending institution reports the loan repayment history of all its borrowers to an independent third party agency, CIBIL. This serves as a measure of the borrower’s credit worthiness and helps as a decision making tool for the financial and lending institutions.
Many a time based on some slippages of a borrower in repaying, a lending institution agrees into a settlement or a payment collection plan with the borrower. Once this has been adhered to by the borrower ( who is the customer of the lending institution in the first place and a consumer of the financial services), most of the institutions report the loan as “Written Off”. (Some may not, and we are not talking about them here.).
It is noted that in financial parlance, a “Write off” indicates a bad debt, which is NOT RECOVERABLE! Where as in this case the loan has been already repaid as per the BANK’s revised payment plan.
Now why should a repaid a loan be reflected as Written off? A “written off” in your closed loan CIBIL report can adversely affect your financial credit worthiness and your ability to take loans further.
Over here, it is important to note that, CIBIL is an independent agency and just publishes the report given by the BANK and this cannot be changed by the borrower protesting against this.
The way a customer is obliged to declare all his details correctly without any ommissions for opening the Bank account and while soliciting the loan, a Bank is equally obliged to declare or report a loan correctly. If not then your rights as a customer will be hurt and you can file a complaint on the Bank with the relevant authorities.
What about the time taken for clearance of your cheques; the outstation cheques? If your Bank is taking more than usual time to clear, may be you have reason to cheer too!! You are entitled to 2% penalty interest + the regular interest that you should regularly get?
Also during the tenure of the loan payment, many a time the Bank/financial institution may be sending a collection agent to collect your EMIs!! Is the Collection agent’s behaviour as per the BSCBI prescribed code, polite and by seeking your appointment?? Do you have reasons to complain?? Do you know whom to approach to complain??
Click on the following link to know more and in detail about your rights as a customer; article courtesy ‘The Economic Times’ dated 18th Aug’11.
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