Mumbai : The Reserve Bank of India (RBI) wants to strengthen the credit bureaus, but to do that the government has to make some legislative amendments, a top central bank official said on Monday.
Delivering the key note address at the national banking summit organised by IBA and Ficci, RBI deputy governor NS Vishwanathan said there is a need to strengthen the credit bureaus but to do that some legislative amendments are needed.
“We have several measures in that direction (strengthening credit bureaus). Some of these are in terms of expanding the database….database that credit bureaus require, certain legal amendments and that is a work in progress,” he said without elaborating on the same.
It can be noted that telecom companies and power utilities have been demanding that their customers’ payment history be shared with credit bureaus saying the definition of default has to be extended beyond the domain of pure financial sector alone. Currently, there are four credit information companies in India–TransUnion CIBIL, CRIF High Mark, Equifax, and Experian. Availability of credit scores through these bureaus has helped lenders take informed decisions on lending, especially to retail borrowers, according to analysts. Vishwanathan’s comments come at a time when RBI is in the process of setting up a public credit registry to address the issue of information asymmetry, and improve access to finance and credit culture. This was after a taskforce, set up by the RBI to review the availability of information on credit in India and assess the gaps that could be filled by a comprehensive public credit registry, submitted its report in June 2018.
Mumbai: Reserve Bank of India (RBI) deputy governor Viral V Acharya on Monday called for enacting a special law to enable the proposed public credit registry (PCR) to come into being, and said this can go a long way in resolving the deep data asymmetry in the financial system which in turn can help prevent bad loan pile-up. With a low credit-to-GDP ratio of a modest 55.7 per cent, the country is still under-penetrated financially and the proposed PCR can help the system move towards more equitable and timely access to credit, especially to the underserved segments, and thus democratise and formalise the credit flow, he said.
According to the Q4 2017 data from the Bank for International Settlements, India’s credit-to-GDP ratio stood at a low 55.7 per cent, against China’s 208.7 per cent, Britain’s 170.5 per cent and the US’ 152.2 per cent.
