The Reserve Bank of India (RBI) on Thursday asked credit institutions (CIs) to provide credit information of the borrowers on-boarded by them to the credit information companies (CICs) until their licence cancellation, shutdown of operations, or the completion of the borrower’s loan lifecycle, whichever is earlier.
Currently, entities whose licence or Certificate of Registration (CoR) has been cancelled by the RBI are not considered CIs under the Credit Information Companies (Regulation) Act, 2005 (CICRA), and their credit information cannot be accepted by the credit information companies (CICs).
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In these cases, the repayment history of these entities’ borrowers is not updated, even if they continue to repay or clear their dues.
To address the difficulties faced by these borrowers, the RBI has directed CICs and CIs to implement a credit information reporting mechanism following the cancellation of the licence of banks or non-banking finance companies (NBFCs).
In its circular, the RBI said, “These CIs shall continue to report credit information of the borrowers on-boarded and reported to CICs prior to cancellation of their licence or CoR to all the four CICs till the loan lifecycle is completed or the credit institution is wound up, whichever is earlier.”
Furthermore, CICs will term entities as “Licence Cancelled Entities” in their Credit Information Report (CIR). CICs shall base this tagging on the information available on the RBI’s website or the cancellation of licence order received from the banking regulator.
The circular will be implemented within six months of the date of the circular, with the provisions being applicable to those entities whose licences have been cancelled by the RBI before the issuance of this circular.
First Published: Oct 10 2024 | 7:02 PM IST
