Credit bureaus should have a provision for Aadhar in systems

Usage of the Aadhaar number will make the functioning of lenders easy: KC Chakrabarty

Credit information bureaus should use Aadhaar number to enable smoother working of the credit market and root out cases of identity frauds, RBI Deputy Governor KC Chakrabarty said today.

"Let us have only one ID, that is Aadhaar, which will be much more convenient to the people and easier to identify. I feel that all credit bureaus should have a provision for the Aadhaar number in their systems," he said here.

He said usage of the Aadhaar number will make the functioning of lenders easy as the information can be shared easily across the lenders and also help prevent frauds.

"The use of Aadhaar will help in rooting out many cases from identity frauds to unauthorised documentations," he said, speaking ahead of the launch of three products by credit information company Experian.

He said the Unique Identification Authority of India, headed by Nandan Nilekani, which is rolling out Aadhaar numbers is doing a "tremendous job" and will complete the project by the end of FY'16.

Chakrabarty also said that people should get their bank account linked to the Aadhaar number.

He also asked the credit information bureaus to focus on retail and small businesses so that those who require credit the most, and have good repayment records till now, get loans easily.

Chakrabarty, a former commercial banker, said lenders grant loans to the two segments based only on "intuition" in the absence of strong data to back their decisions.

It is sheer luck that the segment has not created any excess stress in the system, he said.