RBI Forms Task Force To Find Better Ways To Track Credit Quality
Panel to review gaps in India’s credit information system set up by RBI.
The Reserve Bank of India has constituted a panel to establish a public database of credit information, and suggest improved mechanisms to track credit quality, as Indian lenders battle mounting bad loans.
The ten-member task force on public credit registry will be chaired by YM Deosthalee, the former chief executive officer of L&T Finance Holdings Ltd., the central bank said in a memorandum issued Monday. Anujit Mitra, the director of the statistics department at RBI, will be the member secretary.
The task force may also invite experts from the World Bank, European Central Bank and similar economic and monetary bodies, the memorandum said.
The panel will review the current availability of credit information in India and assess the gaps that a public credit registry can fill. It will then suggest a roadmap for developing a “transparent, comprehensive and near-real-time- PCR for India,” the memo added. The task force will also study international practices on public credit registries, determining the scope and deciding the structure of the information system.
The regulator has already created a Central Repository of Information to track large credit exposures of lenders. It also has a comprehensive basic statistical return database with granular account-level information on credit.
Bad loans worth more than Rs 8 lakh crore have hindered banks’ ability to bolster credit growth when the economy is facing its worst slowdown in three years. The central bank has aimed to resolve India’s 60 largest delinquent-loan cases by the end of the current fiscal, Bloomberg had reported.
RBI, in its August monetary policy review, had announced plans to form such a panel. The banking regulator pointed that credit information companies have been offering limited reports to lenders by segregating the information into separate modules. A credit registry will “help in enhancing efficiency of the credit market, increase financial inclusion, improve ease of doing business and help control delinquencies”, according to the banking watchdog.
The panel will submit its first report by April 4, 2018 and its secretariat will be housed in the Department of Statistics and Information Management in the RBI.