Reserve Bank Deputy Governor Viral Acharya has said the central bank plans to engage with the Centre and other regulators to bring in a comprehensive Public Credit Registry (PCR) Act to strengthen micro credit in the coming months.
“The PCR will have to be backed and governed by a comprehensive Public Credit Registry Act … so as to bring in data from the section of lenders who do not directly fall under the RBI regulations,” he said.
In the meantime, the RBI has set up an Implementation Task Force that is putting the systems infrastructure in place to kick-start the PCR with data from regulated entities that can be covered either under, or with minor tweaking, of the extant legislative framework, Acharya said while addressing the IIT Bombay Tech Fest.
“The PCR has been envisaged as a database of core credit information – an infrastructure of sorts on which users of credit data can build further analytics. It will strive to cover all regulated entities (i.e., financiers) in phases and in this way get a 360-degree view of borrowers. It will facilitate linkages with related ancillary information systems outside the banking system, including corporate filings, tax systems (including the Goods and Services Tax Network), and utility payments,” the RBI Deputy Governor said.
“It will have to follow the latest privacy guidelines based on a laid down consent framework,” Acharya said. The PCR Act will need to ensure adequate safeguards on data, while at the same time address extant restrictions on sharing of credit data that prevent efficient allocation and regulatory supervision of credit, he added.
Acharya said the PCR will make borrower information more complete with increasing coverage of lending entities. In particular, it will eventually reach out even to the smallest primary agricultural credit societies. “It will also cover entities which may not be regulated by the RBI. This will have to be done in phases and it may take up to three to five years to accomplish, possibly sooner,” he said.
According to Acharya, PCR will vastly simplify and reduce the reporting burdens on lenders. Other entities including regulators and supervisors will be able to access it for core credit information and supplement it with only the incremental part as per their requirement.
“Many of the statistical returns presently collected by RBI may also accordingly be substantially rationalised and pruned, freeing up resources in the financial eco-system for analysis instead of repetitious efforts in data collection, follow-up and cleaning. The same would be the case with other entities that presently collect such data from banks,” he said.
Data as of March 2018 of scheduled commercial banks (SCBs) from RBI’s basic statistical returns (BSR) shows that close to half of the outstanding credit is for ticket size above Rs 10 crore and 30 per cent is above Rs 100 crore.