Credit Reporting After Licence Cancellation: RBI's New Mechanism
Current · Source: Reserve Bank of India · RBI/2024-25/81 · issued 10 Oct 2024 · ~2 min read
Quick answerRBI mandates that banks and NBFCs whose licence is cancelled must continue reporting borrower credit data to CICs until loans are repaid or the entity is wound up, ensuring borrower repayment history is updated.
The rule, in the simplest words
If a bank or NBFC’s licence is cancelled, it must still send borrowers’ repayment data to all four credit bureaus until the loan is fully paid or the company is closed.
The cancelled entity is still called a “Credit Institution” for reporting, but the credit bureaus will not charge it any annual or membership fees and must label it as “Licence Cancelled Entity”.
The cancelled entity can only look at credit reports for borrowers it had already onboarded before the licence was cancelled.
All affected institutions must update their systems and the credit bureaus must apply the new tagging within six months of the RBI circular.
How it plays out — a real example
Rohit, a senior loan officer at a small finance bank in Jaipur, checks each morning that repayment updates from customers of a branch whose licence was cancelled last month are still being sent to the four credit bureaus, just as the RBI rule requires, ensuring those borrowers’ credit histories stay current.
What changed
Previously, cancelled entities could not report to CICs, leaving borrower repayment history unupdated. Now, such entities are treated as 'Credit Institutions' under CICRA Section 2(f)(vii) and must continue reporting. CICs cannot charge them annual or membership fees and must tag them as 'Licence Cancelled Entities'.
What it means for you
Borrowers of cancelled lenders will no longer suffer from incomplete credit histories, aiding their access to new credit. Lenders must ensure their systems can continue reporting post-cancellation, and CICs must update tagging and fee waivers within six months.
What you must do
Update internal systems to continue reporting credit data to all four CICs after licence cancellation until loan lifecycle ends or entity is wound up.
Ensure access to Credit Information Reports is limited only to borrowers onboarded before cancellation.
Coordinate with CICs to implement the tagging as 'Licence Cancelled Entities' based on RBI's public orders.
Review existing cancelled entities and apply this mechanism retroactively as per the circular.
Will borrowers of a cancelled NBFC still have their repayment history updated?
Yes, the cancelled entity must continue reporting to CICs until the loan is fully repaid or the entity is wound up, so borrower repayment history will be updated.
Do cancelled entities have to pay fees to CICs under this new mechanism?
No, CICs shall not charge annual or membership fees from these entities.
Does this apply to entities whose licence was cancelled before this circular?
Yes, the provisions apply retroactively to all entities whose licence or CoR was cancelled prior to the circular's issuance.
📜 Read the original circular — full text as issued by RBI
RBI/2024-25/81
DoR.FIN.REC.47/20.16.042/2024-25
October 10, 2024
All Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks, and excluding Payments Banks)
All Primary (Urban) Co-operative Banks/ State Co-operative Banks/ Central Co-operative Banks
All Non-Banking Financial Companies (including Housing Finance Companies)
All Asset Reconstruction Companies
All Credit Information Companies
Dear Sir/ Madam,
Implementation of Credit Information Reporting Mechanism subsequent to cancellation of licence or Certificate of Registration
The Credit Information Companies (Regulation) Act, 2005 (CICRA) stipulates that only Credit Institutions (CIs) can furnish credit information to Credit Information Companies (CICs). Section 17(1) of CICRA mandates that CICs can collect credit information from its member CIs or member CICs only. Therefore, only the entities that are covered under the ambit of section 2(f) of CICRA, 2005 can submit credit information to CICs.
2. In view of the provisions of CICRA, entities whose licence or Certificate of Registration (CoR) has been cancelled by the Reserve Bank of India, can no longer be deemed as CIs under CICRA and their credit information cannot be accepted by the CICs. In such cases, repayment history of borrowers of these entities is not updated even if these borrowers continue to repay/ clear their dues.
3. In order to redress the hardship faced by such borrowers, in exercise of the powers conferred by sub-section (vii) of section 2(f) and sub-section (1) of section 11 of CICRA, the Reserve Bank of India directs CICs and CIs to implement a credit information reporting mechanism subsequent to the cancellation of the licence/CoR of banks/ Non-Banking Finance Companies (NBFCs) as given in the Annex .
4. These CIs shall continue to be governed by the provisions of CICRA, Rules and Regulations framed thereunder and directions issued by the Reserve Bank of India from time to time.
5. These instructions shall be implemented within six (6) months of the date of the circular.
Yours faithfully,
(J. P. Sharma)
Chief General Manager
Encl: Annex
Annex
Provisions of the credit information reporting mechanism subsequent to cancellation of licence or Certificate of Registration
1. All CIs, whose licence or CoR has been cancelled by the Reserve Bank of India shall be categorised as "Credit Institutions" under Section 2(f)(vii) of CICRA.
2. 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.
3. These CIs shall have access to Credit Information Reports pertaining to only those borrowers which were onboarded and reported to CICs before the cancellation of their licence/CoR.
4. CICs shall not charge the annual and membership fees from these CIs.
5. CICs shall tag these CIs as "Licence Cancelled Entities" in the CIR. CICs shall base this tagging on the information available on the website of the Reserve Bank of India or the cancellation of licence order received from RBI.
6. Provisions of this circular shall also be applicable to those entities whose licence/CoR has been cancelled by the Reserve Bank of India prior to issuance of this circular.
7. All other instructions regarding credit information reporting by CIs to CICs shall remain unchanged.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2024-25/81 · issued 10 Oct 2024. The plain-English explanation above is BankPulse’s own independent summary.
Update internal systems to continue reporting credit data to all four CICs after licence cancellation until loan lifecycle ends or entity is wound up.
📜 Compliance
Ensure access to Credit Information Reports is limited only to borrowers onboarded before cancellation.
Coordinate with CICs to implement the tagging as 'Licence Cancelled Entities' based on RBI's public orders.
Review existing cancelled entities and apply this mechanism retroactively as per the circular.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are an IT/Systems lead at a bank this circular applies to (Commercial banks (including SFBs, LABs, RRBs, excluding Payments Banks), Primary Urban Co-operative Banks, State Co-operative Banks, Central Co-operative Banks, Non-Banking Financial Companies (including Housing Finance Companies), Asset Reconstruction Companies, Credit Information Companies), your first concrete step on “Credit Reporting After Licence Cancellation: RBI's New Mechanism” is: “Update internal systems to continue reporting credit data to all four CICs after licence cancellation until loan lifecycle ends or entity is wound up.” (RBI issued this 10 Oct 2024).
Circular: RBI/2024-25/81 -- Credit Reporting After Licence Cancellation: RBI's New Mechanism
Issued: 10 Oct 2024
Action required: Update internal systems to continue reporting credit data to all four CICs after licence cancellation until loan lifecycle ends or entity is wound up.
Action required: Ensure access to Credit Information Reports is limited only to borrowers onboarded before cancellation.
Action required: Coordinate with CICs to implement the tagging as 'Licence Cancelled Entities' based on RBI's public orders.
Action required: Review existing cancelled entities and apply this mechanism retroactively as per the circular.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12739&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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