What changed
RBI clarified that SC/RCs are 'credit institutions' under the Credit Information Companies Act, 2005, and must comply with membership and data submission requirements. They must provide current data in existing formats if not already furnished by banks/FIs from whom assets were acquired.
What it means for you
SC/RCs now have a statutory obligation to share borrower credit information with CICs, ensuring comprehensive credit histories. This enhances data accuracy and completeness in the credit information system, benefiting lenders with better risk assessment.
What you must do
- Become a member of at least one Credit Information Company if not already done.
- Furnish current borrower data in the existing format to the CIC, ensuring it is accurate and complete.
- Update credit information on a monthly basis or at shorter intervals as agreed with the CIC.
- Coordinate with banks/FIs to avoid duplication of data already provided by them.
Who it affects
All registered Securitisation Companies, All registered Reconstruction Companies, Credit Information Companies
Why are SC/RCs required to join a Credit Information Company?
Under the Credit Information Companies Act, 2005, SC/RCs are defined as 'credit institutions' and must become members of at least one CIC to furnish credit information.
How often must SC/RCs update credit information?
Credit information must be updated regularly, at least on a monthly basis, or at shorter intervals as mutually agreed with the CIC.
What data should SC/RCs provide to CICs?
They should provide current data in the existing format, ensuring accuracy and completeness, especially if the data was not already furnished by the banks/FIs from whom assets were acquired.