First of all wekosystem can be done today. I saw a site which shows an application framework.
http://eng.silvercab.biz/ If one looks at this site although its a demo site, this tells that it can be done, for if people can order cabs then putting up few financial transactions should be much much easier. Btw the site is done using Drupal . I do not know the people behind it but they seem to have done a good job of the same.
More interestingly, I remembered the same as last week I had attended the Moneylife workshop which was organized by Ms. Sucheta Dalal www.suchetadalal.com . I have been an admirer of her work for maybe 3-4 years. The workshop/seminar was on the theme of Credit Reports . There were 4 panelists :-
Mr.PS Jayakumar,Country Business Manager,Citibank (www.citibank.com) , Mr.Arun Thukral,Credit Information Bureau of India Ltd. (www.cibil.com), Dr.Sujata Prasad,General Manager,RBI (www.rbi.org.in) ,Ms.Sureka Marandi,Banking Ombudsman . (www.bankingombudsman.rbi.org.in)
Now the problem stems from the fact how the loan is given, what terms there are, the conditions and charges made by banks for various services, all of them well-disguised to fool the customer or so it seems.
The other part of the equation is CIBIL. From their own site http://www.cibil.com/overviewin.htm
“Rapid industrialisation. An expanding economy. Growing aspirations. Increased incomes. Improved lifestyles. Availability of high quality products and services. An expanding market.
These factors have created an atmosphere conducive to rapid credit off take. While the demand for credit has risen exponentially, there has been a parallel increase in competition, and credit delinquencies. In such an environment, risk assessment is of critical importance. Not only, in deciding on what business to book and the speed at which a credit grantor does so, but also in determining the appropriate pricing.
Comprehensive credit information, which provides details pertaining to credit facilities already availed of by a borrower as well as his payment track record, has become the need of the hour.”
Now the problem is they are not going to be the only ones, they are going to be 3 more credit organizations. Now with CIBIL, as and when it will become possible for individuals, one would have to pay Rs. 100/- for his/her credit report (at today’s rate). Even if we take a conservative estimate its going to be Rs. 400/- this way or that way. Even if we go from our bank its bound to be charged in one way or the other.
Also there are issues with accuracy of the database, how recent the history and things like that.
For people who feel they have been wronged or wrongly charged, they have the RBI and the Banking Ombudsman but from whatever interactions there were it seemed that they have just no voice.
Its only lone voices like Sucheta who’s able to take up cases, get some action going on them by reporting in mainstream media or consumer groups who may take up the cause one way or the other. The other side of the table seems to have lost touch. The people who were wronged or who felt they were mis-guided in the audience were educated, the elite of the society. If they felt like this, I shudder what other may be going on a day-to-day basis.
On this sombre note, I bid adieu for now, with the hope there is someway a wekosystem comes up in this industry and shows people what is possible.