Annual Policy Statement for the year 2004-05 - Dissemination of credit information - Role of CIBIL

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ಪ್ರಕಟಿಸಲಾದ ದಿನಾಂಕ ಜೂನ್ 17, 2004

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Annual Policy Statement for the year 2004-05 - Dissemination of credit information - Role of CIBIL

RBI/2004/226
DBOD No. DL.BC.95/20.16.002/2003-04

June 17, 2004

All Scheduled Commercial Banks (excluding RRBs) and
Notified All-India Financial Institutions and
State Financial Corporations

Dear Sir

Annual Policy Statement for the year 2004-05 – Dissemination of credit information – Role of CIBIL

Please refer to paragraph 124 of the Annual Policy Statement for the year 2004-05 on dissemination of credit information enclosed to the Governor’s letter No.MPD.BC.249/07.01.279/2003-04 dated May 18, 2004.

2. With effect from March 2003, dissemination of credit information covering data supplied on suit-filed defaulters in the financial system is being undertaken by Credit Information Bureau (India) Ltd. (CIBIL). Accordingly, such data can now be accessed on CIBIL’s website.

3. The Reserve Bank had issued instructions to banks and financial institutions (FIs) vide circulars DBOD No.DL.BC.29 and 70/20.16.002/2002-03 dated October 1, 2002 and February 10, 2003, respectively, to obtain the consent of all their borrowers (and not only defaulters) for pooling of data for development of a comprehensive credit information system. However, many banks have not taken effective measures to comply with the instructions in a comprehensive manner, which is a matter of serious concern. The development of an efficient credit information system is considered critical for the development of a sound financial system. Hence, we advise that the Boards of banks/FIs should review the measures put in place by their banks/FIs for furnishing credit information in respect of all borrowers to CIBIL and report compliance to Reserve Bank of India, Department of Banking Operations and Development, Central Office, World Trade Centre, Mumbai – 400 005.

4. Please acknowledge receipt.

Yours faithfully

(C. R. Muralidharan)
Chief General Manager-in-Charge

Dissemination of Credit Information – Role of CIBIL

124. Since June 2002, compilation and dissemination of credit information covering data on defaults to the financial system have been taken over by Credit Information Bureau of India Ltd. (CIBIL) from RBI. The Reserve Bank had issued instructions to banks/FIs to obtain the consent of all their borrowers for dissemination of credit information to enable CIBIL to compile and disseminate credit information. However, many banks have not taken effective measures to comply with the instructions in a comprehensive manner which is a matter of concern. The Reserve Bank accords highest priority to the development of an efficient credit information system and would be closely monitoring the progress in this regard. With a view to developing a sound financial system, it is proposed that:

The Boards of banks/FIs should review the measures taken for furnishing credit information in respect of all borrowers to CIBIL and report compliance to RBI.
Credit Information Bureaus, like credit rating agencies, are critical for the operation of the financial system and, in many ways, have a privileged relationship with the regulator. As such, it is desirable that the objective should be to move towards a sufficiently diversified ownership with no single entity owning more than 10 per cent of the paid-up capital in the first stage, and 5 per cent later