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RBI considering setting up Public Credit Registry in India

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Reserve Bank of India (RBI) is considering setting up a public credit registry in India to address the twin balance sheet problem of the banking sector and the corporate sector. RBI Deputy Governor Viral Acharya highlighted the need to set up a public credit registry while delivering the theme talk at the 11th Statistics Day Conference. Reserve Bank celebrated its ‘11th Annual Statistics Day Conference’ on July 04, 2017 on the Theme ‘New Frontiers on Statistical Methods and Information Base for Central Banks’.

What is Public Credit Registry?

According to the World Bank Doing Business Project, “Public credit registry coverage reports the number of individuals and firms listed in a public credit registry with current information on repayment history, unpaid debts, or credit outstanding. The number is expressed as a percentage of the adult population.” rbi-grants-payments-banks-licence-to-11-applicants

  • Public Credit Registry is managed by a public authority like the central bank or the banking supervisor, and reporting of loan details to the registry by lenders and/or borrowers is mandated by law.
  • It is different from Credit Information bureau which is privately owned and caters to the information requirements of commercial lenders. While a public credit registry data are geared towards use by policymakers, regulators, and other officials.

Expected Benefits from Public Credit Registry:

Acharya mentioned that public credit registry will help RBI in effectively monitoring delinquencies in credit market and intervene at an early phase.

  • It will bring in efficiency in the credit market by helping the lenders in appraisals and monitoring of the loan portfolio.
  • The registry will also help the cause of financial inclusion of the small businesses and individuals by allowing them to establish their reputation via the registry.
  • Based on available details of collaterals, the registry can enable the writing of contracts that prevent over-pledging of collateral by a borrower.

Quick Facts – Reserve Bank of India (RBI):

  • Established in: 1935
  • Headquarters: Mumbai
  • Current Governor: Urjit Patel