The working group set up by the Reserve Bank of India (RBI) to study options of set up a credit information bureau (CIB) has suggested involving a foreign technology partner in the venture. The proposal is made in order to gain from the foreign partner's expertise.
The group which submitted the report to RBI yesterday said that the bureau should be technology driven and professionally managed company with minimum manual intervention.
The report said that although under the existing legal framework disclosure of information of banks customers is prohibited, the bureau could begin with information related to suit filed accounts. The bureau could also disseminate information in cases where the customer has given consent to the bank to disclose the information.
It has suggested that bureau should collect both negative and positive information relating to credit, trade and financial information including external borrowings on corporate and consumer or retail segments, collected from sources such as credit facilities available from banks, non-banking finance companies as also credit cards held indebtedness to housing finance companies, mobile phone companies sand so on.
The working group is of the view that the CIB should operate as repository of positive and negative information which would require enactment of master legislation to facilitate collection and sharing of information.
The bureau could be set up as a company under Companies Act, 1956 or as a subsidiary company with share capital contribution from its user groups which includes commercial banks, financial institutions and NBFC registered with the RBI. It should function like a commercial organisation.
It has also recommended building up an effective system and evolving a code of conduct among the members for protection of data and regulation of its use. The group has suggested that an appropriate regulatory framework for credit information bureau is necessary.
Accordingly it is suggested that the proposed legislation should have provisions in relation to data protection, privacy, redressal of grievances for customers and so on. iple A
