Banks and financial institutions need not seek borrowers’ consent to share credit information with credit information companies, according to the Reserve Bank of India.
This advice comes as the Credit Information Companies (Regulation) Act provides statutory backing for sharing of credit information by credit institutions with credit information companies (CICs).
With CIC Act coming into force, the “consent clause” has become redundant, the RBI said in a notification. Previously, consent clause (for sharing information with CICs) was needed in the loan/credit documents.
The CIC Act provides for collection (from members) and furnishing (to specified users) of credit information by credit information companies. CICs are repository of credit information — both current and historical data on existing and potential borrowers.
These institutions maintain data base of credit information — both positive and negative — on the borrower which can be accessed by the intending lending institution.
Negative financial data includes adverse information on the borrower such as delinquencies, defaults, penalties, frauds or bankruptcies. Adverse public record data can also find its way to the negative credit file. Positive financial data includes historical record of facilities availed and good and satisfactory performance of loan repayment.
![comment](https://assetsbl.thehindubusinessline.com/theme/images/bl-online/1x1_spacer.png)
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.