Chennai-based fintech company, Cloudbankin, has successfully tested a product that lets banks and NBFCs report loan sanctions to CIBIL daily. This product will help prevent a person from taking multiple loans.
While there is nothing wrong or illegal with a person taking multiple loans, except that many people, tempted by agents, end up availing themselves of loans beyond their repaying capacity. The Reserve Bank of India is concerned about this.
Today, a bank or an NBFC would not know if its borrower is also concurrently taking a loan from another bank or NBFC, because reporting of loan availments to TransUnion CIBIL (formerly, Credit Information Bureau (India) Ltd), happens once a month. Recently, the RBI asked lenders to report to CIBIL in fifteen days.
However, even 15 days is too long as it is enough for a person to take multiple loans. If the lender knew the borrower’s borrowing history, it could take an informed decision about whether to give the loan or not.
That is where Cloudbankin’s product, which it calls ‘CBrealtime – credit bureau daily reporting’, comes in handy. It lets daily reporting of loans to CIBIL. It does this basically by collecting the borrower’s PAN and Aadhar details and running a check.
At a time when personal loans are rising sharply, almost real-time availability of information becomes critical to avoid reckless borrowing/lending. RBI data shows that personal loans increased 52 per cent between July 2022 and June 2024, from ₹36 lakh crore to ₹54 lakh crore. RBI also says that 43 per cent of personal loanees have taken multiple loans.
Cloudbankin’s product is particularly relevant to small banks and NBFCs. “We have completed testing of our product with an NBFC client and will be launching it for them this month,” Maieenah Rajah, Co-founder and Chief Business Officer, Cloudbankin, told businessline. He said that 28 NBFCs have lined up for the product so far.
Cloudbankin, formerly called Habile Technologies, was founded in 2008. It describes itself as a ‘digital lending infrastructure’ company and offers services such as digital onboarding system, advanced Loan Origination System (LOS) and Loan Management System (LMS). Last year, it secured funding of $ 400,000 from a group of investors.
Thallam Sreekumar, Managing Director at the Chennai headquartered NBFC, Anchorage Finkred Pvt Ltd, who earlier worked with ICICI when the financial institution launched the country’s first collateral-free personal loan product, told businessline that Cloudbankin’s product would be a “gamechanger”. Anchorage Finkred is where the product was tested.
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Published on August 18, 2024
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