What changed
RBI reminded RRBs that they are classified as credit institutions under the Credit Information Companies (Regulation) Act, 2005, and must join at least one credit information company. RRBs are required to build a database and be ready to supply credit data (positive and negative) in the prescribed format. Borrowers can request a copy of their credit information from the RRB for a maximum fee of Rs. 50.
What it means for you
RRBs must now actively participate in the credit information system, which will improve credit assessment and reduce default risk. Lenders will have access to comprehensive credit histories, enabling better lending decisions. Non-compliance with the Act and regulations could invite regulatory action.
What you must do
- Initiate steps to build a comprehensive credit database of all borrowers.
- Become a member of at least one credit information company immediately.
- Supply both positive and negative credit data in the format specified by the credit information company.
- Ensure readiness to provide credit information copies to borrowers upon request, charging a maximum fee of Rs. 50.
- Review and ensure strict compliance with the Credit Information Companies (Regulation) Act, 2005 and its rules.
Who it affects
All Regional Rural Banks (RRBs), Borrowers applying for credit from RRBs, Credit information companies
What is the deadline for RRBs to become members of a credit information company?
The Act requires membership within three months from its commencement (December 14, 2006) or any extended time allowed by RBI. This circular urges immediate action.
What data must RRBs supply to credit information companies?
RRBs must supply both positive and negative credit data in the format prescribed by the credit information company.
Can a borrower get a copy of their credit information from an RRB?
Yes, any person applying for credit can request a copy, and the RRB must provide it upon payment of a maximum fee of Rs. 50.