Banks should give clear reason for application denial

[beast_boy]

I recently wrote a mail to Federal Bank. Level 1 didn't help. Now wrote to Level 2

Mila Federal ka?

 

[MangoRush]

Mila Federal ka?

Yes, took almost 2 months for them to resolve the issue.

 

[krish11]

I had applied for Jupiter CSB Edge Card a couple of months back and my application was rejected. As usual, the reason for rejection was internal policy stated by Jupier team and CSB Nodal Team as well. Recently i found out about Jupiter Nodal Team and they clarified about some Hunter check by Experian, based on which my application didn't reach threshold. On searching Experian Hunter Check, I found out about this tool is to eliminate fraud applications. On the other hand I have 811 as credit score in Experian.

 

[arun4455]

I have never got reason from any bank. At every level, they state that its a business decision/ internal policy.

 

[vijay.vj]

I got a call today from SBI Cards Team. I can say it was official because that lady was able to pull up records from as back as 2019 applications. Also she said all the documents will be over SBI official email ID.

However, coming to the reason. She mentioned that the application is not rejected, it shows like that on portal. But it has been put on hold because I hold too many Credit Cards. (Which of course I do). She said that the documents are fine and reconfirmed stuff like Salary and all. I confirmed all that, she said that she is raising this up with her head of department and I should expect some response in 1 month. (I don't know why that long time, but anyways). She said once that is in process, she will only call back (Anyway if I don't hear from her until 15th December, I will start bothering the Customer Care again). I am not letting my efforts go in vain.

What happened later on, did you manage to get the card?

 

[MS R]

What happened later on, did you manage to get the card?

+1 . .

 

[Tamal]

I had applied for Jupiter CSB Edge Card a couple of months back and my application was rejected. As usual, the reason for rejection was internal policy stated by Jupier team and CSB Nodal Team as well. Recently i found out about Jupiter Nodal Team and they clarified about some Hunter check by Experian, based on which my application didn't reach threshold. On searching Experian Hunter Check, I found out about this tool is to eliminate fraud applications. On the other hand I have 811 as credit score in Experian.


View attachment 49252

Hunter - India Consumer

www.experian.in

How to bypass Experian hunter check???

 

[biriyani]

Wow, okay. I am currently in process of pushing SBI and StanC. If I don't get a proper response, I will push to BO as well. 😉

Were you able to get the SBI card?

 

[Paritosh]

I informed ICICI about RBI guidelines for rejection of credit cards. ICICI rejected to give any reason. They gave it in writing that they won't be providing details and I can reach out to the RBI ombudsman. Attaching a screenshot of the mail I received. What are the next steps?

 

[arun4455]

I informed ICICI about RBI guidelines for rejection of credit cards. ICICI rejected to give any reason. They gave it in writing that they won't be providing details and I can reach out to the RBI ombudsman. Attaching a screenshot of the mail I received. What are the next steps?

You can reach out to RBI. The bank may call and provide the reason, however, RBI will be closing the complain stating that card issuance is subject to bank policy. This has happened with me on two cases.

 

[xfactcc]

You can reach out to RBI. The bank may call and provide the reason, however, RBI will be closing the complain stating that card issuance is subject to bank policy. This has happened with me on two cases.

So RBI will not follow RBI guidelines? 🤔

 

[Boy 07]

I recently wrote a mail to Federal Bank. Level 1 didn't help. Now wrote to Level 2

i am fed up recently axis bank declined the card i have mailed them they said you would recievd a letter by email there will be a clear reason.yes bank decliend the card i also asked them they have only one formate they paste me every time.they have not fear of RBI.Now i am not able to understand what should i do ?

 

[ramirami]

I do not like these guidelines. Evaluating a customer for creditworthiness is / should be proprietary information / algorithm for the bank. The bank is taking a calculated risk when it agrees to loan money. A bank with a better algorithm to identify good borrowers should be able to use it and get more profits. I think that the regulator is over-reaching here.

 

[atx]

I do not like these guidelines. Evaluating a customer for creditworthiness is / should be proprietary information / algorithm for the bank. The bank is taking a calculated risk when it agrees to loan money. A bank with a better algorithm to identify good borrowers should be able to use it and get more profits. I think that the regulator is over-reaching here.

Regulator is not asking banks to reveal how they evaluate a customer or their algorithm. It is asking to only to clearly state the exact reason why any customer's request has been rejected, that too after taking all of user's personal information, including Aadhaar consent & putting hard enquiries with credit bureaus.

Imo, one important thing to note here is that the 'reason of rejection' of a customer's application itself CANNOT be a proprietary information of the bank. It is actually the customer's information only which the bank has processed.

Telling users the exact reason of rejection does not mean banks have to give up their algorithm. It serves 2 purposes:
1. Customer can improve upon their profile after knowing the reason, and
2. Transparency

Even banks know that telling the reason of rejection is no harm to them or their process, or their algorithm. They just don't tell it so that even in case they're at fault or mistaken, customer cannot take any action against them because the customer doesn't even know what happened.

 

[nayra]

I wish I had known about SBI retention trick early. Would have gotten atleast 1 CC from them in my portfolio.

Can someone create a compilation of such methods/experiences that can be helpful for beginners?
I was thinking of getting LTF Cards too, and I don't what this means.. A pinned post in TF Neo section could be awesome..

 

[ramirami]

Imo, one important thing to note here is that the 'reason of rejection' of a customer's application itself CANNOT be a proprietary information of the bank. It is actually the customer's information only which the bank has processed.

Even though the decision is based on information provided by the customer, the algorithm used to arrive at the decision can be proprietary.

 

[atx]

Even though the decision is based on information provided by the customer, the algorithm used to arrive at the decision can be proprietary.

That is correct, but nobody is asking to reveal that algorithm.

There could 15 parameters that a bank could be checking while processing an application, let's say. Bank only need to inform that 1 point where the application got critically failed. For example, salary requirement not met, or salary mentioned vs salary credit mismatch, or low credit score, or too much credit leverage, or hunter score issue, or pincode issue, or kyc failure, or whatever of this kind. No information related to which all parameters passed is being asked, just the one which resulted in application rejection.

This way, atleast the customers would know what's the issue with their profile. And if there is a mistake from bank's end, which do happen many times, the customer can raise that appeal and this gives a chance of fair application review.

 

[Boy 07]

Same thing happened with me RBL DECLINED The Application and he did not tell the main/clear reason

 

[Mahmodul]

Yeah if you have certain leverage against them then you can ask for anything and they'll oblige.

But till then we need the RBI to enforce the Banks to atleast tell us the nearest reason why was it rejected without disclosing their underwriting protocols.

But its most likely impossible as the Banks have a considerable lobby in the RBI
You can say how fast the lobby acted to shutdown the BNPL industry as they were becoming a challenge to traditional players.

It's true.. RBI most of the time on the side of banks, a few months ago I fought with kotak and atlast RBI closed my case as per the reply of kotak.
My case was: Kotak offered me a loan of 4Lakh on my CC, I took it also but after one month I noticed in my CIBIL report that kotak showed this loan amount as CC.. surprisingly Kotak mentioned my cc limit 135k but outstanding approx 400k because of this my overall utilisation ratio went 42% then I wrote email to kotak pno, MD but no use them approached RBI but RBI took 2 months to resolve the issue, in the mean time some one called me from kotak nodal desk and told this the reporting system of all bank but replied with my practical logics but atlast bank managed RBI and RBI closed my complaint. RBI mostly don't care about customer satisfaction