Why is a Public Credit Registry important?

• A public credit registry is an information repository that collates all loan information of individuals and corporate borrowers.
• A credit repository helps banks distinguish between a bad and a good borrower and accordingly offer attractive interest rates to good borrowers.
• PCR will address issues such as information asymmetry, improve access to credit and strengthen the credit culture among consumers.
• A PCR may also help raise India’s rank in the global ease of doing business index.

Panel’s proposals

• The committee has suggested 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.

Why PCR is necessary

• Credit information is now available across multiple systems in bits and pieces and not in one window. Data on borrowings from banks, non-banking financial companies, corporate bonds or debentures and external commercial borrowings, among others, are not available in one data repository.
• PCR will help capture all relevant information about a borrower, across different borrowing products.
• It can flag early warnings on asset quality by tracking performance on other credits.

PCR in other countries

• PCR in other countries now include other transactional data such as payments to utilities like power and telecom for retail consumers and trade credit data for businesses.
• Regularity in making payments to utilities and trade creditors provides an indication of the credit quality of such customers.