RBI allows fintechs to access credit bureaus

The RBI has widened the access to credit information bureaus enabling fintech companies to register as users.

In November 2021, the RBI through a gazette notification had amended the Credit Information Companies Regulation 2006. The notification enabled “entities engaged in the processing of information, for the support or benefit of credit institutions and satisfying the criteria laid down by the RBI” to access individual credit histories.

The recent notification reverses the central bank’s stand in 2019 that consumer credit information cannot be directly shared with fintech firms. In a communication to banks and NBFCs, the RBI had said that banks were appointing fintech firms as agents but this was against the norms. Under the new regulations, any corporate entity with a net worth of over Rs 2 crore can process information to support regulated lending entities (banks and finance companies). Also, the company has to be Indian-owned with diversified ownership. A key requirement is that the entity should have a certification from CISA (Cybersecurity and Infrastructure Security Agency) certified auditor that it has a robust and secure information technology system in place.

There are currently four credit information bureaus TransUnion Cibil, Equifax, Experian and CRIF Mark. According to lenders, fintechs that do not have a nonbanking financial company licence but facilitate credit through partnership with banks will benefit from this move. This would also facilitate e-commerce players to offer ‘buy now pay later’ option in partnership with lenders on their website.

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