In June 2018, the Reserve Bank of India (RBI) decided to set up a Public Credit Registry (PCR) in a phased manner. Accessible to all stakeholders, it would serve as an extensive database of credit information for India.
As per the RBI’s statement on Developmental and Regulatory Policies, for setting up the PCR, an implementation task force would help design and undertake logistics for the next steps involved in the process.
The report of the high-level task force on PCR for India, with Yashwant M. Deosthalee as chairman, is the main factor behind the establishment of the PCR. The RBI constituted the task force in order to review the current availability of information on credit, adequacy of existing information utilities, and to identify gaps that could be filled by a PCR. The task force submitted its report to the RBI on April 4, 2018. It recommended setting up of a task force by the central bank, so as to address information asymmetry, strengthen the credit culture in the economy and foster access to credit.
The task force also said that setting up of a granular repository for the credit market through a PCR is quite necessary because, through this facility, lenders can trace a particular borrower’s complete credit history across various sources of funding. The PCR would also maintain borrower’s privacy with regard to tax information, insolvency or bankruptcy proceeding and regulatory actions and cases of criminal liability against a company.
At present, there are various credit information companies (CICs). The RBI has multiple granular credit information repositories like CRILC (Central Repository of Information on Large Credit); banks and non-banking financial companies report their loan disbursal data to two separate CRILC platforms. RBI wishes the multi-level credit information system to be consolidated.
Since credit disbursals from financial institutions, borrowing from the market or external commercial borrowings, and other sources of credit are recorded over multiple systems, there is replication of the same information across these systems. This also issues results in matters relating to data quality and reporting. To resolve these issues, a single or common PCR is the solution.