'Take in account credit info reports in lending decisions'

RBI today asked banks and other financial institutions to take into account 'credit information reports (CIRs)' from one or more agencies in all lending decisions and account opening.
"Banks/FIs should include in their credit appraisal processes/loan policies, suitable provisions for obtaining CIRs from one or more CICs (Credit Information Companies) so that the credit decisions are based on information available in the system," the RBI said in a notification.
It further said as commercial borrowers' data is not adequately populated with the CICs, "to start with, banks/FIs may institute board approved policies for credit bureau usage in all lending decisions and account opening to retail borrowers/consumer borrower segment".

Earlier, the RBI has set up a Committee to recommend data format for furnishing of credit information to CICs.
The RBI further said banks/FIs are advised to report data in respect of their corporate borrowers to the CICs in a timely manner with immediate effect and CICs should populate their databases with commercial data records within six months.
"Therefore, after a period of six months, banks/FIs should also start using data available with the CICs in respect of commercial/corporate borrowers, under a Board approved policy," it said.

With a view to streamlining the process of data submission by banks/FIs to CICs, RBI said that it has also been decided to standardise the formats for data submission.

In another notification, the RBI said banks/FIs may continue to furnish the data on wilful defaulters (non-suit filed accounts) of Rs 25 lakh and above for the quarter ending June 30, 2014 and September 30, 2014 to RBI.
Similarly, in respect of defaulters (non-suit filed accounts) of Rs 1 crore and above, they may continue to submit the data to RBI for the half year ending September 30, 2014 in the existing format.
In terms of Credit Information Companies (Regulation) Act, 2005, banks/FIs are advised to furnish the data in respect of wilful defaulters for the quarter ending December 31, 2014 and the data on defaulters for the half year ending December 31, 2014 to CICs and not to RBI.

"Thereafter, banks/FIs may continue to furnish data in respect of defaulters/wilful defaulters to CICs on a monthly or a more frequent basis. This would enable such information to be available to the banks/FIs on a near real time basis," the RBI added.