What changed
RBI clarified that accounts admitted to NCLT/NCLAT under the Insolvency and Bankruptcy Code must be reported as suit-filed cases to Credit Information Companies.
What it means for you
Banks and lenders must now tag NCLT/NCLAT-admitted accounts as suit-filed in their credit information submissions, ensuring CICs reflect the legal status accurately. This impacts credit scoring and risk assessment for borrowers undergoing insolvency, potentially lowering their creditworthiness.
What you must do
- Update your credit reporting systems to classify NCLT/NCLAT-admitted IBC cases as suit-filed accounts.
- Train credit reporting teams on the new classification by February 28, 2023.
- Ensure implementation of this circular by February 28, 2023.
Who it affects
All Commercial Banks including Small Finance Banks, Local Area Banks, RRBs, Primary Urban Co-operative Banks, State Co-operative Banks, DCCBs, All-India Financial Institutions (Exim Bank, NABARD, NHB, SIDBI, NaBFID), All NBFCs including Housing Finance Companies, All Credit Information Companies
What is the key change in this circular?
RBI clarified that cases admitted under IBC at NCLT/NCLAT must be reported as suit-filed accounts to Credit Information Companies, effective from the implementation date.
By when must banks implement this change?
The circular must be implemented by February 28, 2023.
Does this affect all types of lenders?
Yes, it applies to all commercial banks, cooperative banks, NBFCs, housing finance companies, and all-India financial institutions.