To enable the banking sector tackle the problem of stressed assets, which now stands at about ₹12 lakh crore, the Centre has set up an information utility (IU) called National E-Governance Services.

An information utility is a credit registry, maintaining data on borrowing, default, and security interest of lending/borrowing transactions with banks and financial institutions. It provides data to authorised users on the present status of a borrower.

Commissioned by the Ministry of Corporate Affairs, the group was given the mandate to frame rules, regulations and by-laws for IUs besides eligibility norms for entities desirous of becoming an IU.

Draft regulation

A draft regulation has already been put up for further discussion and approval.

The draft regulations expect an IU to provide high-quality authenticated information about debts and defaults so that courts and tribunals accept the information in IUs as evidence.

Hence, the regulations have taken care that IUs can accept information only of a certain kind and only from certain persons for the sake of accuracy.

In addition, the regulator Insolvency and Bankruptcy Board of India (IBBI) will specify the set of standards for IUs, besides having a unique identifier for all lenders, borrowers and loans.


Once implemented, banks would be able do better enforcement of dues against borrowers.

Better credit monitoring would result in lower risk weights and reduce interest rates charged, besides recycling funds so that credit is available with high velocity.

For borrowers, the main benefits come in the form of reduced cost of capital, no unilateral action, and data on repayment will be tracked by the IU.

Access to credit increases, prompt repayment of loans by firms are recognised incentiivising risk taking by entrepreneurs.

A new set of professionals named Insolvency Professionals (IP) will come into being and they would be supervised by insolvency professional agencies (IPA). Adjudication would be done by the National Company Law Tribunal (NCLT) and the Debt Recovery Tribunal (DRT).

The company has been formed following a report by a working group of experts, who include: KVR Murty, Joint Secretary (e-Governance), Ministry of Corporate Affairs; Ajay Shah, Professor, NIPFP; Mihir Kumar, Director and Deputy Registrar, CERSAI; Rajinder Kumar, CGM, RBI; Jayesh Sule, Whole-Time Director and Chief Operating Officer, NSDL E-Governance; Mrutyunjay Mahapatra, DMD, SBI; and Nivedita Haran, Director, National E-Governance Services.