HDFC Bank delayed reports of repayment status of millions of borrowers: Experian to RBI

By Suvashree Ghosh and Anto Antony

One of India’s biggest credit bureaus has informed the central bank about delays in receiving information from HDFC Bank Ltd., the country’s second-largest lender by assets, according to people familiar with the matter.

The local unit of Experian Plc told the Reserve Bank of India in July that HDFC Bank has been late in providing details of its loans, including the repayment status of its millions of retail borrowers, the people added, asking not to be identified because the information is confidential. Such tardiness has been an issue for about two years, the people said, without giving further details, including on the length or extent of these delays.

Indian banks seeking to assess the credit worthiness of borrowers depend on data from credit bureaus like Experian, particularly at a time when soured debt is expected to surge due to the coronavirus pandemic. Lenders are obliged by the RBI to provide information on their borrowers to Experian and three other credit bureaus on a monthly basis. HDFC Bank has in recent weeks brought its information up to date, the people said.

A spokesperson for HDFC Bank denied any delays in supplying the information. “HDFC Bank has always been sharing information with the credit bureaus on time both as a matter of policy and regulatory compliance,” the spokesperson said in an email. “We are totally compliant in this regard.”

Any information with regard to the RBI, the banks and the credit bureau is strictly confidential, a spokeswoman for Experian said in an email, when asked if HDFC Bank delayed submissions of the data. Experian operates within a framework laid down by the RBI and in accordance with the Credit Information Companies (Regulation) Act of 2005, the spokeswoman said.

The central bank did not respond to an email seeking comment.

The credit bureaus act as a central point for India’s banks to share details on the repayment status of their loans on a confidential basis. For example, if a particular corporate or individual borrower falls into arrears with one bank, information from the bureaus can prevent another lender from increasing its exposure.

A 2014 committee report on the bureaus’ activities said that an “adequate amount of quality information on counterparties is a critical component” of India’s financial infrastructure.

The country’s banks face the prospect of more debts souring after a loan repayment freeze ends later this month. The RBI has warned that the bad loan ratio might swell to a two-decade high of 12.5% by March from 8.5% a year earlier.

HDFC Bank has a total loan book of 10 trillion rupees ($134 billion) and more than 56 million customers, filings show.

Representatives for the three other credit bureaus -- TransUnion CIBIL Ltd., the local unit of Equifax Inc. and CRIF High Mark Credit Information Services -- didn’t respond to requests for comment.