In a significant move, the Telangana High Court has issued a final warning to the Union Finance Ministry over the unregulated dissemination of personal data in credit reports. The warning came as part of a hearing on a Public Interest Litigation (PIL) that has been pending for over four years.
The PIL, originally filed in 2021 by Hyderabad resident Krupa Soni, challenges the current framework under which Credit Information Companies (CICs) operate. The court expressed dissatisfaction with the Union Government’s delay in responding to the PIL and noted that counter-affidavits from key respondents remain pending despite notices being issued as far back as December 2021 and May 2023.
At the heart of the petition is a challenge to the Credit Information Companies Amendment Regulations, 2021. The petitioner argues that the current system allows private entities to collect, process, and disseminate sensitive personal information without sufficient safeguards. Ms. Soni’s petition seeks to restrain four major credit bureaus from publishing CIBIL score reports on platforms accessible to the public, stating that such practices should be halted until a fair, transparent, and independent mechanism is formulated to handle disputed credit information.
The case arrives at a critical juncture as credit scores have transitioned from mere banking tools to “financial identities” used for everything from loan approvals to employment background checks. The court’s decision on March 17 will likely set a major precedent for how financial data is handled in the future.
