Credit Bureaus may soon be allowed access to data from utility providers

Credit Bureaus may soon be allowed access to data from utility providers as well as other databases like the Goods and Services Tax Network (GSTN), say experts.

The RBI has indicated that amendment to the relevant statute is on cards for facilitating access of credit bureaus. However, no timeline has been indicated for making amendment. The RBI has stressed on the importance of credit bureaus to improve financial inclusion, especially after it decided to set up a Public Credit Registry (PCR) in April.

Deputy Governor N S Vishwanathan said the RBI has taken several measures to strengthen credit information companies (CIC). “Some of these are in terms of expanding the database that credit bureaus require, certain legal amendments, which is a work in progress,” Vishwanathan added while addressing a national banking summit on Monday.

The amendment is expected to enable credit information bureaus to access information from utilities like telecom and GSTN. This will help in getting data on those that do not have a footprint on credit bureaus, said Harshala Chandorkar, chief operating officer of TransUnion CIBIL, adding that the information will help improve financial inclusion, besides credit assessment.

Executives of credit information bureaus said that access to utility payments has been a long drawn out discussion. This process will speed up greatly with the PCR coming in, they added.

“CICs are allowed to access data only from banks and non-banking finance companies (NBFCs), as per the Credit Information Companies (Regulation) Act. While this process has been stabilised, the industry and telecom companies have been pushing to include telecom data for credit evaluation,” said Parijat Garg, vice-president of CRIF Highmark.  

The RBI had set up a committee consisting of representations from the Telecom Regulatory Authority of India (TRAI) and CICs two-three years ago. This committee had favoured allowing credit bureaus to access telecom data. However, nothing materialised, said Garg.

RBI deputy governor Viral Acharya on Monday said that a new law was needed for PCR to address both transparency and privacy concerns, while improving data access.  

“In India, a PCR Act can enable us transparently address the entire gamut of governance issues, including data acquisition and its dissemination through access rights by various users,” said Acharya.

“It is desirable to have a special comprehensive legislation overriding prohibitions contained in all other legislations on sharing of information required for PCR. Otherwise, all such legislations will have to be amended separately, providing an exemption for sharing of information with PCR,” he added.

A CIC executive said PCR is expected to link various databases, thereby bringing in greater access to data, even for private players. Currently, telecom operators, payment banks, insurance companies, among others, are not allowed to share their data with CICs. “The PCR Act will set down the outline for types of alternate data sources that are available for credit evaluation, access to which will trickle down to CICs.”