RBI/2014-15/125
UBD. CO. BPD. PCB. Cir. No. 4/16.74.000/2014-15

July 15, 2014

The Chief Executive Officer
All Primary (Urban) Co-operative Banks

Dear Sir / Madam

Data Format for Furnishing of Credit Information to
Credit Information Companies and other Regulatory Measures

A Committee to Recommend Data Format for Furnishing of Credit Information to Credit Information Companies (Chairman: Shri Aditya Puri) was constituted by the Reserve Bank of India (RBI). The Report of the Committee was placed on RBI’s website on March 22, 2014 inviting comments on the recommendations of the Committee. The Report of the Committee is available for reference on RBI’s website which  can be viewed using the link http://rbi.org.in/scripts/PublicationReportDetails.aspx? UrlPage=&ID=763.

2. On examination of the recommendations of the Committee and the comments/suggestions received, it has been decided to implement the following recommendations with modifications, wherever appropriate:

i. Credit Information Reports (CIRs) / Credit Bureau Usage in all Lending Decisions and Account Opening: Urban Cooperative Banks (UCBs) should include in their credit appraisal processes/loan policies, suitable provisions for obtaining CIRs from one or more Credit Information Companies (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, UCBs may institute board approved policies for credit bureau usage in all lending decisions and account opening to retail borrowers/ consumer borrower segment. [Recommendation 8.9]

ii. Populating Commercial Data Records in Databases of all CICs: A roadmap in regard to CICs populating their databases in respect to corporate borrowers is required to be laid out. For this purpose, UCBs are advised to report data in respect of their corporate borrowers to the CICs in a timely manner with immediate effect. After a period of six months, UCBs should start using data available with the CICs in respect of commercial / corporate borrowers, under a Board approved policy. [Recommendation 8.8]

iii. Standardisation of Data Format: With a view to streamlining the process of data submission by UCBs to CICs, it has been decided to standardise the formats for data submission by the UCBs to the CICs. The data format as per Annex I should be taken as the base for standardisation of data format for consumer and commercial borrowers. These formats should be put in use by the UCBs for reporting to CICs with immediate effect. The data format would be a non-proprietary reporting format and henceforth would be known as “Uniform Credit Reporting Format”. The segment viz. consumer and commercial will be denoted appropriately in parentheses, for example, “Uniform Credit Reporting Format (Consumer)”. These should be uniformly adopted by the UCBs. [Recommendation 8.10 (a)]

iv. Technical Working Group: It has been decided to constitute a Technical Working Group comprising of representatives from Scheduled Commercial Banks (a member each from a Public Sector Bank, a Private Sector Bank and a Foreign Bank), Urban Cooperative Banks, Regional Rural Banks (RRBs), All India Notified Financial Institutions, CICs, NBFCs, HFCs, IBA and MFIN to institutionalise a continuing mechanism for reviewing and making changes where necessary to the data formats. This Working Group should review the data formats periodically, say once a year, and suggest modifications to the same. It would frame rules on all data fields for various data formats, viz. consumer, commercial and MFI. The data formats after finalisation by the Group will be submitted to RBI for approval. In order to implement the recommendations relating to the Technical Working Group, CIBIL will act as the convenor of the Group and take the lead to operationalize the recommendation. To start with, the Working Group may take up, on a priority basis, changes in the commercial borrower segment, where there is an urgent need to capture data required for sharing of information among member banks/FIs under consortium/multiple banking arrangements and to aid in implementation of the instructions at paragraph 2 (ii) above. The Working Group should also incorporate the additional fields as detailed in Annex II. [Recommendations 8.10 (b) and 8.11]

v. Rectification of Rejected Data: CICs are required to share with UCBs the logic and validation processes involved in data acceptance so that instances of data rejection can be minimised. The reasons for rejection need to be parameterised and circulated among the UCBs concerned. Rejection reports should be made simple and understandable so that they can be used for fixing reporting and data level issues. UCBs should rectify the rejected data and upload the same with the CICs within seven days of receipt of such rejection report. [Recommendation 8.15]

vi. Data Quality Index: A common Data Quality Index would assist UCBs in determining the gaps in their data and also move towards improving their performance over a period of time. In addition, they would also be able to rank their own performance against that of their peers and identify their relative position. UCBs may adopt this Data Quality Index for assessing the quality of data submissions and make efforts towards improving data quality and minimising data rejections, within a time period of six months. [Recommendation 8.16]

vii. Best Practices for UCBs: Every UCB should take into account the best practices as detailed in Annex III while formulating or reviewing the policy and procedure under the Credit Information Companies (Regulation) Act, 2005 (CICRA) with the approval of their Board of Directors. [Recommendation 8.25]

3. The other recommendations of the Committee would be further examined before taking a decision on their implementation. UCBs are advised to implement the instructions contained in this circular, as per the time schedule indicated.

Yours faithfully,

(Scenta Joy)
General Manager