CIBIL launches iScan to prevent commercial loan delinquencies in banks

IBA recommends iScan check by financial institutions before opening current accounts
Mumbai, March 2, 2016: Credit Information Bureau (India) Limited (CIBIL), the country’s leading credit information company, today launched CIBIL iScan that provides banks with comprehensive details of a corporate’s credit history spread across all financial and credit institutions. CIBIL iScan is a path breaking solution for the Indian market that leverages CIBIL’s vast repository of commercial credit information to provide financial institutions with insights on their current account applicants.

Launching CIBIL iScan, Mr. Satish Pillai, Managing Director, CIBIL said: “We are committed to partnering with our members and the Reserve Bank of India to create insights, content and solutions that can support the growth of the Industry. CIBIL iScan is aimed at helping financial institutions in reducing the risk and time taken in opening of current accounts by providing them a concise view of all the credit relationships the entity has across other financial institutions.”

The Indian Banks’ Association (IBA) had recommended the creation and usage of CIBIL iScan to help prevent increase in stressed assets and establish best practices for building a strong system for risk mitigation and fraud control. Mr. Ashwani Kumar, Chairman, IBA said: “IBA in the past has been observing increase in instances of borrowers of stressed accounts, often opening current accounts with banks outside their borrowing arrangement. We are happy to note that CIBIL is launching CIBIL iScan, which will provide banks with comprehensive details of corporate's credit history spread across all financial and credit institutions. This will help the banks in ensuring that current accounts are not opened with outside banks other than the one with which they have borrowing arrangement.”

This solution will prove to be a deterrent for those corporate borrowers with stressed accounts, which open/maintain current accounts to siphon off revenues and circumvent the original borrowing arrangement. CIBIL iScan provides financial institutions with comprehensive details of customer’s credit history spread across all banks and credit institutions. The Reserve Bank of India has laid down mandatory processes for curbing losses to the industry due to diversion of funds. As per the mandate, banks are required to obtain a No Objection Certificate (NOC) from all the Financial Institutions that have extended credit facilities to the customer, before opening of a Current account. CIBIL iScan helps get precise information on all the banks and Financial Institutions from whom the NOC would be required. Thus doing away with the dependency on the customer and making the process reliable and fast.