Impact Analysis of RBI recommendations for data Formats for Credit Bureaus

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Impact Analysis of Recommendations of Reserve Bank of India committee for data Formats for Credit Bureaus

Text of Impact Analysis of RBI recommendations for data Formats for Credit Bureaus

  • Impact Analysis of Recommendations of RBI committee for data Formats for CICs http://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=30855
  • Recommendations of RBI committee for data Formats for CICs Recommendation Potential Impact/opportunity All commercial banks, Regional Rural banks, Local Area Banks, HFCs and SFCs may be compulsorily required to become members of all CICs and submit data to them. Cooperative banks and NBFC with assets over 100 crores may be compulsorily required to become members of all CICs. Others may be encouraged to become members of all CICs Huge increase in data load for CICs. Help banks to generate and share data with all CICs in standardised TUDF format Adaptor for banks for generating and sharing data with all CICs in standardised TUDF format Include following fields relating to the CPs in the commercial data format for collecting credit info from CIs: 1. Name of CP issuer 2. Name of IPA 3. Amount 4. Issue date 5. Maturity date 6. Name of credit rating agency 7. Rating assigned 8. Amount of default TBD in the TWG (technical working group) for data formats CICs may populate their DBs with commercial data records within 1 year Opportunity to help CICs populate DBs with commercial data
  • Recommendation Potential Impact/opportunity CIR should report co-borrower and guarantor details Enhance CIR format to include these details CIC may be required to have information on mortgages of properties in the consumer bureau format by having linkages with the database of the Central Registry (CERSAI) Enhance CIR format and the system that generates CIR (MSOTool)? In case of multiple borrowings of the same customer, information on various accounts may be provided in the order of live accounts, closed accounts and overall position of NPA status/wilful default/suit filed, with limits and liabilities of each account Enhance CIR format and the system that generates CIR (MSOTool)? CIC should provide Read-only access to members to view the data provided and updated by them New system requirement unless already there Necessary steps be taken to put in place a full-fledged online data correction mechanism New system requirement Adequate disincentives be put in place to ensure that CICs and CIs adhere to the timelines stipulated under the CIC rules for resolving discrepancies in CIR ? CIRs should provide appropriate disclosures if any information contained therein is disputed and the matter is not satisfactorily resolved. if the customer so desires, his/her comment could also be added to the CIR Enhance CIR format and the system that generates CIR? Recommendations related to CIR
  • Recommendation Potential Impact/opportunity New fields to indicate willful default of over 25 lakh (suit filed and non-suit filed accounts) Improve the commercial data format DPDs should be captured by CIs for reporting to CICs Enhancements to the CBS/credit systems of Cis Fields showing reasons for restructuring Improve the commercial data format Banks to share data on unhedged foreign currency exposure with CICs. CICs may devise suitable format / fields for incorporation in the Commercial Data Format. Data from CIs should have at least one of the identifier fields viz. PAN card No, Driving license no, Voter Card ID no. etc. CIs to improve data generating process Reasons fore rejection need to be parameterized and circulated among the credit institution concerned. Rejection reports should be made simple and understandable. Enhancements to data upload process of CICs (DUA) Data Quality Index New application requirement at CIC or Cis CIBIL method of calibrating credit score from 300 to 900 could be adopted by the other CICs Other CICs to Modify/create calibration to match scoring from 300 to 900 Changes in Commercial data format of CIBIL
  • Recommendation Potential Impact/opportunity When CIRs on the same borrower are accessed by more then one specified user, say, within a period of one month, an alert may be provided by the CIC to all specified users who have drawn the reports, to avoid multiple financing to void fraudulent transactions Enhance the system generating CIR, for this feature (MSOTool)? Alerts on borrowers who are changing their address/office are to be indicated to other credit grantor as a Separate value added product, without disclosing the name of the CI New application requirement? Customization of reports to provide specific information like behaviour pattern of borrowers, as a separate value added product New application requirement? All CICs should be ISO27001:2013 certified for information security Certification audit by a reputed auditor Best practices for CICs
  • Recommendations of RBI committee for data Formats for CIs Recommendation Potential Impact/opportunity Banks may be required within a reasonable period of, say, eighteen months, to arrange for capturing the required data from SHGs for reporting to CICs Banks required to update their processes to capture info about members of SHGs All banks should be required to share DPD data in their reporting under asset classification. In the commercial segment, corporate identification number and credit history of the directors of the company (based on DIN number) also should be included. Modify CIBIL commercial data format There should be only one format for uploading and reverting reject data from the CIC as conversions/ reconversions between formats like Excel/TUDF/Notepad, etc., during the process of furnishing data create validation issues. Standardisation of data format between CIs and CICs The term settled be suitably explained in the consumer CIR to avoid misinterpretation by users. Explanation by borrower may also be included if desired by the borrower Changes in CIR format DPDs should be captured by CIs for reporting to CICs Enhancements to the CBS/credit systems of CIs
  • Recommendations of RBI committee for data Formats for CIs Recommendation Potential Impact/opportunity CIs may include in their credit appraisal processes, provisions for obtaining credit reports from one or more CICs so that the credit decisions are based on the information available in the system Integrate CBS/credit appraisal systems with CICs to directly fetch CIRs into the system without manual intervention CIBIL format to be taken as base for standardisation of data formats for consumer and commercial borrowers. High Marks format to be the base for MFI data reporting. Advantages CIBIL and HM. Other CICs need to adopt these formats. Additional fields in data formats as per annex 5 of the report. Changes in data formats to be incorporated in the data coming from CIs and CICs need to modify their data validation and upload procedures accordingly. Detailed product classification, e.g., car loans, commercial vehicles and construction equipment vehicles, under auto loans could be furnished by CICs if so reported by the banks. Change in CIR format Business category/type, Mobile/Telephone number, State/Pin- code/Country enhance the value of the commercial bureau data and hence should be captured by the banks in their CBS. Enhance banks CBSs
  • Recommendation Potential Impact/opportunity Banks should mandate the use of CIRs in credit appraisal process Directly fetch CIRs into credit processing systems Data Quality Index New application requirement at CIs Best practices for CIs
  • Current Scenario 4 April 2014 Harrier 9
  • Proposed New Scenario 4 April 2014 Harrier 10
  • To achieve this, use SMAC-G 4 April 2014 Harrier 11
  • We seek your feedback & shall be happy to discuss further! 4 April 2014 Nagpur Shanti Plaza, Shanti Park, Harihar Nagar Besa, Nagpur 440034 India Tel: +91-712-329-6558, 653-6728 Fax: +91-712-245-5322 Mumbai 201-B, Mastermind III Royal Palms, Goregaon (E) Mumbai - 400065 USA 1512, Penzance way, Hanover, MD 21076 Email: info@harriersys.com http://www.harriersys.com/ Harrier 12 Thank you!