Context:
Recently, RBI imposed a penalty of Rs 39 lakh on Citibank for failing to provide credit information to Credit Information Companies (CIC).
Credit Information Companies (CICs):
- Entities that collect public data, credit transactions and payment histories of individuals and companies regarding loans and credit cards, among others.
- They gather data from various sources, such as banks, financial institutions, lenders, and other credit-granting entities, and then compile this data into credit reports.
- Banks and Non-banking financial institutions refer to the CIC’s report and score to decide borrowers’ creditworthiness before granting a loan or issuing a credit card.
- Licensed by – RBI
- Governed under – Credit Information Companies Regulation Act, 2005 (CICRA) and various other rules and regulations issued by the RBI.
- Every Credit Institution (like banks) should be a member of at least one CIC.
- A CIC may seek and obtain information from its members only.
- As a result, when a bank seeks information from a CIC, it will get the information given by other institutions (to CIC) only.
- Present status – 4 credit information companies are given certificates of registration by the RBI.
- Credit Information Bureau (India) Limited (CIBIL)
- Equifax Credit Information Services Private Limited
- Experian Credit Information Company of India Private Limited
- CRIF High Mark Credit Information Services Private Limited.
Source: TOI
Previous Year Question
Consider the following statements:
1. In India, credit rating agencies are regulated by Reserve Bank of India.
2. The rating agency popularly known as ICRA is a public limited company.
3. Brickwork Ratings is an Indian credit rating agency.
Which of the statements given above are correct?
[UPSC Civil Services Exam – 2022 Prelims]
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Answer: (b)
Explanation:
Statement 1 is not correct: In India, credit rating agencies are regulated by Securities and Exchange Board of India (SEBI).