Mumbai: A tidal wave of discontent is hitting India's credit reporting system. Complaints filed against Credit Information Companies (CICs) have skyrocketed, nearly quadrupling over a span of just three years. This dramatic surge highlights a growing crisis of confidence among borrowers, who are increasingly frustrated with errors in their credit scores and the accuracy of their financial data.
A Sharp Spike in Grievances Against Credit Bureaus
Data from India's financial ombudsman reveals an alarming trend. While overall complaints across all regulated financial entities have been rising, the escalation against CICs is the most severe. The numbers tell a stark story: complaints rose from 1,039 in the financial year 2022-23 to 3,847 in 2023-24. The upward trajectory continued, reaching 4,585 complaints in 2024-25. This marks an increase of almost 400% over the three-year period.
The overwhelming majority of these grievances—more than 84%—are linked to issues concerning loans and advances. This indicates that inaccuracies in credit reports are directly impacting citizens' ability to secure or manage debt, a critical component of financial life.
The Broader Landscape of Financial Complaints
The rise in CIC complaints is part of a larger, concerning pattern in the financial sector. The ombudsman's annual report shows that total complaints across all regulated entities continued their climb. The figure reached 2.95 lakh (295,000) in FY25, up from 2.93 lakh in FY24 and 2.34 lakh in FY23.
Banks remain the single largest source of complaints, though their numbers stabilized at 2,41,601 in 2024-25 after a sharp rise the previous year. Non-Banking Financial Companies (NBFCs) and non-bank payment system participants (NBPSP) also posted steady increases. NBFC complaints grew from 33,072 to 43,864, while NBPSP grievances rose from 3,456 to 5,617 over the same three years.
Shifting Trends Within Banking Complaints
Within the banking sector, the nature of complaints is evolving. While loans and advances remain the largest category, two other areas have seen significant growth:
- Credit Card Grievances: These complaints gained over five percentage points in two years, reaching 17.16% of all bank complaints in FY25.
- Deposit Account Issues: These climbed to become the second-largest area of concern, accounting for 20.63% of complaints.
Conversely, complaints related to ATM and debit card services fell sharply from 14.56% to 7.47%. This decline clearly reflects the consumer shift away from traditional card-based transactions towards UPI and other digital payment platforms.
Private Sector Banks Overtake Public Sector Banks
In a notable shift, private sector banks received more complaints than their public sector counterparts in FY25. Private banks garnered 1,11,199 complaints, slightly edging out the 1,03,117 complaints against Public Sector Banks (PSBs).
What This Means for Borrowers and the System
The explosive growth in complaints against credit information companies is a clear red flag. It signals systemic issues with data accuracy and dispute resolution mechanisms at credit bureaus. For millions of Indians, an erroneous credit score can mean rejected loan applications, higher interest rates, and blocked financial opportunities.
The data underscores an urgent need for CICs and lenders to improve data hygiene, ensure timely correction of errors, and make the grievance redressal process more efficient and transparent. As credit becomes even more central to the economy, restoring borrower trust in the credit reporting system is paramount.
