Credit Information Companies (CIC) should regularly hold workshops for banks/FIs, in association with Indian Banks’ Association (IBA) or Micro Finance Institutions Network (MFIN), as the case may be, according to the Reserve Bank of India.

This will help them appreciate the benefits arising out of better screening of loan applicants and usage of credit information report (CIR) in credit appraisal.

The abovementioned directive is part of the recommendations of the Committee to Recommend Data Format for Furnishing of Credit Information to Credit Information Companies (CICs). The RBI has now asked banks/financial institutions/ CICs to implement 11 of the recommendations.

The RBI said banks/FIs should include in their credit appraisal processes/ loan policies, suitable provisions for obtaining CIRs from one or more CICs so that the credit decisions are based on information available in the system.

In this context, as commercial borrowers’ data is not adequately populated with the CICs, to start with, banks/FIs may institute board approved policies for credit bureau usage in all lending decisions and account opening to retail borrowers/consumer borrower segment.

A roadmap in regard to CICs populating their databases in respect to corporate borrowers is required to be laid out. For this purpose, banks/FIs are advised to report data in respect of their corporate borrowers to the CICs in a timely manner with immediate effect and CICs should populate their databases with commercial data records within six months.

Therefore, after a period of six months, banks/FIs should also start using data available with the CICs in respect of commercial/corporate borrowers, under a Board approved policy.

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