Enhanced Reporting Frequency for Credit Institutions to Credit Information Companies: An Imperative for Current Credit Data
In a significant move to enhance the timeliness and accuracy of credit information, the Reserve Bank of India (RBI) has issued new directives aimed at both Credit Information Companies (CICs) and Credit Institutions (CIs). These measures are detailed in the circular DBR. No. CID. BC. 60/20.16.056/2014-15 dated January 15, 2015, which mandates regular updates of credit information on a monthly basis or at shorter intervals as agreed upon between the CIs and CICs. This directive acknowledges the rapid advancements in digital credit underwriting processes, emphasizing the need for Credit Information Reports (CIRs) to reflect more current information. This ensures that lenders can make well-informed credit decisions promptly.
To bolster this initiative, the RBI has exercised its authority under sub-section (1) of section 11 of the Credit Information Companies (Regulation) Act, 2005 (CICRA, 2005). The new directive mandates that CIs must now update their credit information on a fortnightly basis, specifically on the 15th and the last day of each month. Alternatively, updates can be made at even shorter intervals if mutually agreed upon between the CI and the CIC. The submission of this credit information to CICs must occur within seven calendar days following the relevant reporting period.
Moreover, CICs have been instructed to ingest the credit data received from CIs within a stipulated timeframe. According to the circular DoR.FIN.REC.49/20.16.003/2023-24 dated October 26, 2023, this timeframe was initially set at seven calendar days. However, the latest directive has reduced this to five calendar days, ensuring that credit information is processed and made available even more swiftly.
In addition to these measures, CICs are now required to submit a list of CIs that fail to adhere to these fortnightly data submission timelines. This list must be provided to the Department of Supervision, Reserve Bank of India, Central Office, on a half-yearly basis, specifically as of March 31 and September 30 each year. This step is intended to enhance monitoring and ensure compliance with the new reporting requirements.
The new instructions will come into effect on January 1, 2025. Nevertheless, CIs and CICs are encouraged to implement these changes as soon as possible to align with the updated requirements before the official deadline. Non-compliance with these directives will result in penal actions as prescribed under CICRA, 2005.
In summary, these updated reporting requirements signify a pivotal advancement in the credit information ecosystem. By ensuring more frequent and timely updates of credit data, the RBI aims to enhance the reliability of CIRs, thereby supporting lenders in making more accurate and timely credit decisions.
