The Reserve Bank of India (RBI) has initiated steps to set up a wide-based digital Public Credit Registry (PCR) to capture details of all borrowers, including wilful defaulters and also the pending legal suits in order to check financial delinquencies.
The PCR will also include data from entities like market regulator SEBI, the Corporate Affairs Ministry, Goods and Service Tax Network (GSTN) and the Insolvency and Bankruptcy Board of India (IBBI) to enable the banks and financial institutions to get 360 degree profile of existing and prospective borrowers on a real-time basis.
The RBI has invited expression of interest (EOI) for developing the registry from companies with a turnover of over ₹100 crore in the last three years.
In June this year, the RBI had announced to set up a PCR for India with a view to address information asymmetry, foster access to credit and strengthen the credit culture in the economy.
Digital registry
Earlier, a high-level task force (HTF) was constituted by the RBI to review the current availability of information on credit, the adequacy of the existing information utilities, and identify gaps that could be filled by a PCR.
“In essence, PCR will be a digital registry of authenticated granular credit information and will work as a financial information infrastructure providing access to various stakeholders and enrich the existing credit information ecosystem,” the EOI document said.
The PCR would be the single point of mandatory reporting for all material events for each loan, notwithstanding any threshold in the loan amount or type of borrower.
Currently, there are multiple granular credit information repositories in India, with each having somewhat distinct objectives and coverage.
Rising bad loans
Within the RBI, the Central Repository of Information on Large Credits (CRILC) is a borrower-level supervisory dataset with a threshold in aggregate exposure of ₹5 crore.
Also there are four privately-owned credit information companies (CICs) operating in India. The RBI has mandated all its regulated entities to submit credit information individually to all four CICs.
As per the EOI, the proposed solution should allow easy integration with ancillary information sources, like the Ministry of Corporate Affairs, SEBI, GSTN, CERSAI, utility billers, Central Fraud Registry and Wilful Defaulter/Caution/Suit Filed Lists.
Besides, borrowers would also be able to access their own credit information and seek corrections to the credit information reported on them.
Setting up of the PCR assumes significance amidst rising bad loans in the financial system. The non-performing assets in the banking system is about ₹10 lakh crore.
