Public Credit Registry is back, under a new name

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Editor's note: In her budget speech last week, finance minister Nirmala Sitharaman announced that a National Financial Information Registry is being set up by the government in consultation with the Reserve Bank of India. The purpose of this registry is primarily to store “financial and ancillary information” that will “facilitate the efficient flow of credit, promote financial inclusion and foster financial stability”, she said. Here’s what we know so far: Economic affairs secretary Ajay Seth, in a post-budget interaction, told news service PTI that the NFIR would function as a public database, storing the credit history of borrowers to be made available to licensed lending institutions. Such a database, in theory, is expected to improve transparency in credit underwriting, improve credit flow, as well as reduce costs of availing loans for people with good credit profiles. This registry differs from the current model of credit scoring involving private credit bureaus such as TransUnion CIBIL in that it is also expected to store “ancillary information” beyond just the credit profile of borrowers. It is unclear what this will entail, but Seth indicated that …