Module: | Priority Sector, Consumer Protection & Digital Lending
Q121: Consider the following statements:
Assertion (A) - Information relating to loans that were previously declined to a customer shall not be reported by Credit Information Companies (CICs).
Reason (R) - Reporting such information could be prejudicial to the interests of the customer, as a rejection by one Credit Institution (CI) might be used as a ground for rejection by another CI.
Reason (R) - Reporting such information could be prejudicial to the interests of the customer, as a rejection by one Credit Institution (CI) might be used as a ground for rejection by another CI.
✅ Correct Answer: A
The correct answer is A. Both statements are factually correct, and the Reason accurately explains the Assertion.
CICs are strictly instructed not to report information about previously declined loans.
The logical reason for this regulatory stance is that such information could be highly prejudicial to the customer's interests, potentially triggering an unfair domino effect where a subjective rejection by one CI is used as a definitive ground for automatic rejection by another CI without independent appraisal.
CICs are strictly instructed not to report information about previously declined loans.
The logical reason for this regulatory stance is that such information could be highly prejudicial to the customer's interests, potentially triggering an unfair domino effect where a subjective rejection by one CI is used as a definitive ground for automatic rejection by another CI without independent appraisal.