Abbreviations:
PCR - Public Credit Registry
RBI - Reserve Bank of India
RBI announced that it will set up a PCR as repository information regarding loan information of individuals and corporate borrower
PCR - Public Credit Registry
RBI - Reserve Bank of India
RBI announced that it will set up a PCR as repository information regarding loan information of individuals and corporate borrower
- The decision is as per recommendations of Y.M. Deosthalee Committee set up by central bank
Committee Recommendations:
- RBI to set up PCR in due course
- This should be backed by legal framework
- Central bank may also consider moving such registry to separate non-profit entity
- PCR should also capture data such as
- External commercial borrowings
- Market borrrowings
- Contingent liabilities
- Providing holistic picture about borrower's indebtedness
- PCR shall work as repository of all loan contracts, duly verified by reporting institutions for all/ any lending in India, regardless of the amount of loan.
- Registry should capture both positive and negative information about all loans.
- The borrowers should also be able to access their own history
- PCR data should be available to all stakeholders such as banks on a need-to-know basis.
- There should be adequate safeguards in privacy protection
- Onus of data quality should be on reporting agencies and institutions and action should be taken against the institution in case of any violations in rules
- Data base should be linked to defaulter database such as those maintained by Export Credit Guarantee Corp. of India, GST network etc.
RBI Action:
- On 6th June 2018, RBI disclosed plans to establish PCR in modular and phased manner
- Registry will distinguish between bad borrowers and good borrowers and will offer interest rates accordingly
- It helps in improving access to credit, strengthen the credit culture and strengthen the banking system because at present, the corporate borrowers lend from multiple banks without disclosing their existing debt.
