RBI restricted access to credit data of consumers
The Reserve Bank of India (RBI) has asked the banks and non-banking finance companies (NBFCs) to restrict access to consumers' credit data on 16 September. The move aims to impact the business model of fintech companies. The Central bank has asked the banks and NBFCs to implement the measures in 15 days.
Key highlights:
RBI has found that banks and NBFCs that have partnered with the fintech companies and institutional agents, give them access to the data without the consent of the consumers. These agents include analytics firms, IT companies, online marketplaces, and institutional agents. The outsourcing model was available in the past few years. RBI also figured the pattern of data sharing appeared during an annual audit of some banks.
The Reserve Bank of India (RBI) has asked the banks and non-banking finance companies (NBFCs) to restrict access to consumers' credit data on 16 September. The move aims to impact the business model of fintech companies. The Central bank has asked the banks and NBFCs to implement the measures in 15 days.
Key highlights:
- The Credit Information Companies (Regulation) Act, 2005 (CICRA) violates sharing of information. RBI has warned that it will penalize the regulated entities in case of any breach.
- RBI also asked the Banks and NBFCs to provide details of every retail loan to all four credit information bureaus namely:
- TransUnion CIBIL
- Equifax
- Experian
- CRIF High Mark
- RBI has also sought clarity on the provisions under which the data was being shared under CICRA
RBI has found that banks and NBFCs that have partnered with the fintech companies and institutional agents, give them access to the data without the consent of the consumers. These agents include analytics firms, IT companies, online marketplaces, and institutional agents. The outsourcing model was available in the past few years. RBI also figured the pattern of data sharing appeared during an annual audit of some banks.
