RBI asks banks to use credit info for corporates

Mumbai: Reserve Bank today said its expects banks to use credit bureaux information not just for retail borrowers but equally for corporates.

“Commercial banks are increasingly using information from the credit bureaux to extend loans to retail investors more in comparison to corporates. The impression, we have sometime back is that this is used actively for retail and not so much for corporates,” RBI Deputy Governor Anand Sinha told a meeting organised by Credit Information Bureau (India) Ltd (Cibil).

Noting that banks are using credit bureau information for lending to retail investors, Sinha pointed out that this is less used in case of corporate accounts now. Sinha asked these bureaux to furnish timely and accurately for greater relevance. “The data should be furnished timely and accurately.”

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The RBI Deputy Governor expressed the hope that going forward, banks would do a better balancing act. “Now, there are three more credit information companies. I am sure, situation will definitely improve.” Referring to creation of unique customer identification numbers, Sinha said the central bank is looking at it.

“We are looking at it. The Financial Stability Board is advocating it and G-20 is also in favour of it,” he said, adding issuance of the Aadhar numbers provides a lot of hope in this regard.

Talking about the rationale behind creation of credit information agencies, he said this would help in increasing lending activity to SMEs and poorer section of the society. “Without proper credit information, bank lending will be sub-optimal with bad borrowers. Also, credit information will help in increasing lending to SMEs and the poor.” Sinha emphasised on creating awareness among the customers about credit information bureaux.

PTI