The Reserve Bank of India has decided to set up a Public Credit Registry (PCR) “to foster the level of access to credit and strengthen the credit culture…”
The PCR will 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. The PCR will serve as a registry of all credit contracts, duly verified by reporting institutions, for all lending in India and any lending by an Indian institution to a company incorporated in India.
The RBI considered the recommendations of YM Deosthalee-headed High Level Task Force and decided to set up a PCR. An Implementation Task Force (ITF) is being constituted to help design and undertake logistics for the next steps in setting up of the PCR, RBI said.
Currently, there are multiple granular credit information repositories in India, each with distinct objective and coverage. Within the RBI, CRILC is a borrower-level supervisory dataset with a threshold in aggregate exposure of Rs 5 crore. Also, there are four privately-owned credit information companies (CICs) in India.
“In view of the envisaged benefits, the setting up of the PCR may be expedited. However, considering the broad scope of PCR, the project may be implemented in phases with maximum coverage to be achieved in the first phase itself by on-boarding all SCBs and top NBFCs which are already submitting CRILC and/ or BSR-1 to RBI and all UCBs,” the Deosthalee panel said.
According to the panel, the existing data warehouse infrastructure and the in-house expertise available in RBI may be leveraged and enhanced for a quick rollout of the PCR. However, from the beginning it needs to have a strong technical team and processes in place. “The PCR should be structured as an independent unit within the RBI so that it may be hived off to a separate non-profit at an appropriate time. It should eventually achieve an autonomy and agility to move with the evolving environment and cater to the changing demands,” it said.
The RBI has mandated all its regulated entity to submit credit information individually to all four CICs. CICs offer, based on this unique access to the credit data, value added services like credit scoring and analytics to the member credit institutions and to the borrowers.