The Reserve Bank of India (RBI) on Monday formed a high-level task force on public credit registry (PCR) for India. The task force, chaired by Y M Deosthalee, former CMD of L&T Finance Holdings Ltd will have nine other members.
The terms of reference of the task force include, reviewing the current availability of information on credit in the country, assessing gaps in India that could be filled by a comprehensive public credit registry and suggesting a “roadmap including the priority areas, for developing a transparent, comprehensive and near-real-time” public credit registry for India.
The task force will submit its report by April 4, 2018.
The RBI said the task force will also study the best international practices on public credit registry, decide the structure of the new information system.
According to the RBI statement,the task force will “determine the scope/target of the comprehensive PCR” such as the type of information that should be covered along with the cut-off size of credit.
Currently, there are four credit bureaus in India — Credit Information Bureau (India) Limited (CIBIL), Equifax, Experian, and CRIF Highmark. These bureaus provide credit scores and allied reports and services. As of now, their analysis reports are used for issuing credit cards and for taking decisions mainly on retail loans. The bureaus are regulated by the RBI under the Credit Information Companies (Regulation) Act, 2005.
Typically, a PCR is set up by the central bank and reporting of loan details to the Registry by lenders and/or borrowers is mandated by law. A survey conducted by the World Bank reported that as of 2012, out of 195 countries that were surveyed, 87 were having PCRs, as per the RBI. A public credit registry would help “good borrowers” in securing credit at lowers costs and also improve access of credit to small and medium enterprises.