Hyderabad: The Telangana High Court has given a final warning to the Union Finance Ministry on the sharing of personal data through credit reports.
As a Public Interest Litigation is pending for more than four years, the court has expressed concerns over the delays in responding to it.
The case is being heard by a division bench comprising Chief Justice Aparesh Kumar Singh and Justice Ghouse Meera Mohiuddin.
Background of the case
In 2021, a resident of Hyderabad, Krupa Soni, has filed the PIL against the existing regulatory framework for Credit Information Companies (CICs).
Following the PIL, the notices were sent to the Reserve Bank of India in December 2021 and to the Finance Ministry in May 2023. However, as per the court, the counter-affidavits from the main respondents are yet to be filed.
Due to the silence from the authorities, the court has taken a tough stand and demanded accountability.
Deadline for response
The court has asked the Union Finance Ministry to file its counter-affidavit by March 17, 2026.
The bench stated that costs would be imposed if the ministry fails to comply by the next hearing. The order has been addressed to the Principal Secretary of the Finance Ministry.
In the petition, the Credit Information Companies Amendment Regulations, 2021 has been challenged. It has been argued that the current system enables private entities to collect, process, and share sensitive personal data without adequate safeguards.
The petitioner has requested the court to restrain four major credit bureaus from making CIBIL score reports available on publicly accessible platforms. These include TransUnion CIBIL Limited, Equifax Credit Information Service, Experian Credit Information Company, and CRIF High Mark Credit Information Service.
In the petition, it has been highlighted that inaccurate information submitted by banks can damage financial reputation of an individual. There is a lack of a transparent and effective mechanism to resolve such disputes, the petition added.
The petitioner has requested court to stay the RBI notification related to updated credit reporting regulations.
Another major request is the creation of a strong and independent mechanism to verify and correct disputed data submitted by lending institutions.
