However, it is unlikely that the Central Bank will approve this request given the significant operational changes that lenders and credit bureaus will need to make to their existing technological infrastructure to adopt the practice. | Photo credit: Andrii Yalanskyi
“Since January last year, the RBI has been requiring all lenders to update credit bureau data every 15 days. But our group of borrowers could apply to many institutions and take small and short-term loans during that period. It is important that we track their credit history in real time, otherwise they may avail one or more additional loans and realize it only after 15 days. The recent issue of over-indebtedness of borrowers in the MFI sector is partly due to this delay in data collection,” said a senior official of an MFI requesting anonymity.
However, the request will create a huge pile of data at the credit bureaus and will be difficult to implement by several categories of lenders, especially those with small balance sheets and limited technology infrastructure, say people familiar with the regulator’s thinking.
Further, MFIs have also requested the RBI to allow the biometric Aadhar card as an authentication document for borrowers. While the central bank is amenable to this request, it must be approved by the central government or by the Supreme Court as the Supreme Court in 2017 ruled that lenders cannot authorize Aadhaar for authentication of borrowers.
“After the 2017 court verdict, many MFIs are relying on voter IDs and PAN cards as authentication documents. These documents are not biometric and can be tampered. It is also crucial that the KYC ID and the ID used in the credit bureau are the same for accurate data,” a source said.
Published on February 9, 2026
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