Public Credit Registry

Public Credit Registry

⇛The Reserve Bank of India has shortlisted six major IT companies, including TCS, Wipro and IBM India, to set up a wide-based digital Public Credit Registry (PCR) to capture details of all borrowers and wilful defaulters.

⇛The PCR will be an extensive database of credit information for India that is accessible to all stakeholders. The idea is to capture all relevant information in one large database on the borrower and, in particular, the borrower's entire set of borrowing contracts and outcomes.

⇛The PCR will also include data from entities like market regulator sebi, the corporate affairs ministry, Goods and service tax network and the insolvency and bankruptcy board of india to enable banks and financial institutions to get a 360 degree profile of the existing as well as prospective borrowers on a real time basis.

Management of PCR:

⇛Generally,a PCR is managed by a public authority like the central bank or the banking supervisor, and reporting of loan details to the PCR by lenders and borrowers is mandated by law.

Benefits of having a PCR:

• A PCR can potentially help banks in credit assessment and pricing of credit as well as in making risk based, dynamic and counter cyclic provisioning.
• The PCR can also help the RBI in understanding if transmission of monetary policy is working, and if not where are thw bottlenecks.
• Further, it can help supervisors, regulators and bank in early intervention and effective restructuring of stressed bank credits.
• A PCR will also help banks and regulators as credit information is a 'public good' and its utility is to the credit market at large and to society in general.

Task force on PCR:

• The Reserve Bank of India (RBI) had formed a high-level task force on public credit registry (PCR) for India. The task force was chaired by Y M Deosthalee.
• The task force has suggested the the registry should capture all loan information and borrowers be able to access their own history. Data is to be made available to stakeholders such as banks, on a need-to-know basis. Data privacy will be protected.