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All about CIBIL iScan

Mr Satish Pillai, the managing director of the Credit Information Bureau India Limited (CIBIL) has launched the CIBIL iScan with the partnership of The Reserve Bank of India for providing an effective solution to the corporate sector. It is a brand new feature for improving the growth of the industry to focus on dodging the market decline. The companies hold credit-worthiness and every financial institution can get access to their credit history before making an informed decision about sanctioning loan.

CIBIL iScan is the new feature for providing the banks with immediate access of receiving extensive information on the credit rating of the companies. It is done with anaim at the assisting banks for limiting the number of stressed accounts and maintaining best practices against fraudulent cases. The importance of the feature is deeply rooted in the use of risk mitigation management. In recent times, the national economy has faced certain drawbacks due to cases of fraud carried out by prominent business groups. For preventing the cases of stressed bank accounts, the banks also can make sure that the current corporate account is not initiated outside the bank except the one with borrowing arrangement. In this way, the financial institutions are aligned with the credit-worthiness of the company before welcoming them. In a nutshell, CIBIL iScan offers comprehensive information of a corporate organisation’s credit history all over the credit and financial companies. It is a path-breaking feature in the Indian market for integrating the commercial financial information of the current accounts for the banking institutions.

Importance of CIBIL iScan

Nowadays, the list of bad debts in the banks is increasing and the overdue loan payments of the corporate organisations are to be blamed. Indian Banking Association implies that the distressed corporate leads to trouble for the borrowing arrangement with the financial institutions which are beyond their limits. Now the iScan feature only extends the facility to the limit, the companies are able to pay. Needless to say, the capacity of paying the dues is essential for the organisations and banks. However, the companies are now barred from taking several loans at a time and eligibility for taking a loan is calculated through the CIBIL iScan. The financial institutions are now free from the stress of facing stressed accounts when the corporate organisation is facing decline. In a nutshell, it is a blessing for the banks suffering adversely after sanctioning loans. Now, the financial institutions can acquire NOC or No Objection Certificate for the organisations in question. Before initiating with the procedure of opening loan account, the CIBIL iScan informs the banking personnel about the present credit history of the company.

Concern for the Corporate Sector

The banks are facing various complaints about making the loan procedure awfully long. Due to the time-consuming document verification procedures, the banks have been facing backlashes ever since. It is to note that the banks undertake researches for finding out whether they are on-boarding the right type of customer. The corporate company requires opening a bank account at first for managing the financial transactions. During this time, the companies have to undergo the ‘Know Your Customer’ stage for the banks to make sure that they do not violate rules. Ensuring that the company is involved with any illegal activity, the financial papers are checked to prevent the case of becoming the company’s ruse. In many cases, the corporate organisations had to wait for months for successfully passing the verification process and being eligible for guaranteeing repayment. However, the scope of risk is not completely mitigated through the traditional way. Now, CIBIL iScan is capable of saving time and helping the company at the hour of need. The feature can effectively decrease the market risk and influence growth in a positive way. It holds the concise view of the company with the financial institution.

FAQs on CIBIL iScan

Is Company Credit Important for my business?

Just as a customer holds credit score and report, the companies also need to have a credit report for applying loans to a financial institution. The company credit report contains information regarding the company’s financial situation. There are classified sections which indicate the present credit of the business organisation and the outstanding amount. The number of lawsuits or complaints against the company will be mentioned in the report.

Can everyone access my CCR?

No, only Financial institutions, prominent banks and other CIBIL members have the access to check commercial Company Credit Report. The access is only granted before taking an accurate credit decision. Moreover, the authority of CIBIL prohibits any unwanted disclosure of sensitive data. CIBIL grants permission to the companies for viewing their credit report. The company then is required to request access to the authority of CIBIL and get the report directly from them.

Is CIBIL Rank applicable to my business?

CIBIL Rank is a part of your Company Credit Report and it is primarily a summary of CCR in one digit. There is a scale of 10 to 1 and 1 is considered the best mark to achieve. If your company has outstanding loans ranging from Rs. 10,00,000 to Rs. 1,00,00,000, your company will be given a rank. Past credit utilisation and repayment behaviour are taken into account for calculating the rank.

How do I improve my company’s credit score?

Through the CIBIL iScan, the financial institutions can get important details about your company’s credit-worthiness in one place and low CIBIL score will turn down the loan application. For perfecting the credit score of the company, the following are the steps to be followed,

  • Do not take too much debt within a short period and multiple loans will only increase the financial burden of business.
  • Go through CCR and check thoroughly to see any mishaps or errors.
  • Choose the longest loan period for having a low EMI.
  • Better to keep a mixed bag of credit and create credit history by borrowing funds.
  • Never exceed the company credit limit and maintain the perfect balance of outgoing and incoming.
  • Clear all the company debts on time and improve CIBIL rank.

Will bank charge any fees from my company for CIBIL iScan?

No, the CIBIL iScan facility is integrated with the loan program. CIBIL authority has provided the service to the financial institutions before making a valid credit decision. Therefore, there is no need for the company to pay any monetary amount to the bank.

How do I get hold of Company Credit Report?

For obtaining the Company Credit Report, you have to pay a fee of Rs. 3,000. One can follow the below mentioned steps to get their CCR,

  • Click on https://www.cibil.com/online/Company-credit-report.do
  • After agreeing to pay Rs. 3,000, fulfil the request details such as company name, legal constitution, company PAN, registered address, CRN, CIN and TIN.
  • Then fill up your details like full name, contact address and relationship with the company.
  • Enclose the documents related to the company including address proof and identity proof.
  • Before acknowledging and accepting the terms and conditions, you have to write the characters in the given box.

What are the determinants influencing your Company Credit Report?

There are different factors which leave an impact on company CIBIL score.

  • If you pay off outstanding amount on time and keep the loan numbers to minimal.
  • Companies should get rid of credit-hungry behaviour as it makes them less credit-worthy. The credit utilisation ratio of the companies is similar to the individuals’.
  • The long credit history leads to decent Company Credit Report.
  • Market risk adversely affects Company Credit Report and the real estate industry suffers more ups and downs than others.
  • If your organisation has been in the market for decades, the credit history is likely to be strong. Due to the on-going company operation for a long time, the company growth secured the company to be more credible.

Why is CIBIL Rank unavailable for my Company Credit Report?

CIBIL Rank is present for every company who has a current outstanding loan (the loan range should between Rs. 10 lacs to Rs. 10 crores). However, if the CIBIL rank is not present, it does not imply any negativity on the credit score performance. The company credit performance is evaluated depending on the Company Credit Report.

Is there any difference between the CIBIL score and CIBIL rank?

CIBIL rank is a part of the CIBIL Company Credit Report.Let’s take a look at the main differences between the two components.

  • CIBIL score is for consumers and CIBIL rank stands for commercial purpose.
  • CIBIL score is a 3 digit numeric summary of CIBIL credit history and CIBIL Rank is the summary of CCR.
  • CIBIL score ranges between 300-900 but CIBIL rank is present between the scales of 10-1.