The United States of America (USA) has objected to the Reserve Bank of India’s (RBI) move to create a new public credit registry (PCR).
Why objection
- As per the US, the non-profit credit information firm will be anti-competitive for private credit bureaus (PCBs).
- Currently, four PCBs are operating in India, of which TransUnion CIBIL Ltd and Equifax Credit Information Services Pvt. Ltd are US-owned companies. The other two PCBs are Experian Credit Information Co. of India Pvt. Ltd and CRIF High Mark.
- It has complained that the PCR will limit PCBs’ access to data and hinder their scope and ability to operate optimally in the country.
- It wants India to create a PCR to provide regulators with data to perform supervisory duties.
India’s logic
- India responded that US concerns are misplaced and PCR will not affect the functioning of PCBs in India.
- RBI deputy governor Viral Acharya had said in January 2019 this year that globally, PCBs and PCRs both operate in the same space
- India has informed the US that PCBs will have access to the PCR data as required to carry out their mandate and as decided by the RBI.
What is Public Credit Registry
- The RBI has announced to create the Public Credit Registry on the recommendations of a task force set up in 2017, headed by Y.M. Deosthalee. The committee submitted its report in April 2018 and the central bank made it public in June last year.
- The Public Credit Registry is planned as a repository of loan information of individuals and corporate borrowers to curb bad loans. It will help banks distinguish between good and bad borrowers and accordingly offer attractive interest rates to good borrowers and lend to bad borrowers at higher interest rates.
