RBI issues eligibility criteria for entities using credit bureau data – World Affairs SRS

RBI issues eligibility criteria for entities using credit bureau data

– World Affairs SRS

Reserve Bank of India (RBI) Eligibility criteria issued for entities exploiting data from Credit Information Companies (CICs) or credit bureaus. These newly formed guidelines state that the net worth of the company should be at least Rs 2 crore and to become designated users with credit bureaus owned and controlled by resident Indian citizens, which comes amid allegations of lending applications with Chinese ties in India.

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As per the eligibility criteria for entities to be classified as users specified under clause (j) of regulation 3 of the Credit Information Companies (Amendment) Regulations, 2021:

  • a company incorporated in India or a Statutory Corporations Formed in India body will be
  • The governing statute of the Memorandum of Association of the statutory corporation or company, as the case may be, should permit the business/activity of processing of information for the support or benefit of the credit institutions.
  • The guidelines state that the company should have a net worth of at least Rs two crore as on its recently audited balance sheet, and it should meet the criteria on an ongoing basis.
  • Further, the company should be owned and controlled by an Indian company owned and controlled by resident Indian citizens in the case of resident Indian citizens/ company. Company ownership will be well diversified.
  • The corporation must have at least three (3) years of experience in the business/activity of processing information for the aid or benefit of credit institutions, as well as a clean track record.
  • The Company, its promoters, or any of its directors should not have at any time in the past been convicted of an offense involving moral turpitude or a financial offence.
  • In addition, the entity must have a certification from a CISA certified auditor that it has a robust and secure Information Technology (IT) system in place to protect and protect the data relating to credit information as per the provision of the Credit Information Companies (Regulation) Is. ) Act, 2005 and the rules and regulations made thereunder and any other regulations, guidelines in force in this behalf.

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