The US thinks that the RBI’s public credit bureau will squeeze out India’s private players


  • The US is reportedly against the Reserve Bank of India’s plan to set up a public credit database, explaining that the government-backed registry will make it harder for private credit bureaus to operate
  • There are four private credit information companies in India that do the same work as the public credit database, of which two - TransUnion CIBIL and Equifax Credit Information Services - are owned by US companies.
  • The RBI has been mulling the establishment of a public credit registry since 2017, finally shortlisting a number of tech majors such as Wipro, TCS, Capgemini and IBM to set up the registry in December 2018.

The US is reportedly against the Reserve Bank of India’s plan to set up a public credit database, explaining that the government-backed registry will make it harder for private credit bureaus to operate.

The public credit database will accumulate information on all borrowers along with outstanding loans amounts and material events linked to each loan - and will hence, be used to prevent loan slippages. A loan officer will be able to differentiate between reliable and unreliable borrowers and set interest rates accordingly.

The US concerns could stem from the fact that the move will be a threat to US-owned businesses. There are four private credit bureaus in India that do the same work as the public credit database, of which two - TransUnion CIBIL and Equifax Credit Information Services - have US parents.

A source told Mint that the US felt that the establishment of a public credit registry would hinder the operations of private credit bureaus and limit their access to loan information. Instead, it lobbied for a registry that would mainly be used by regulators - something that defeats the purpose of a public credit database.

Indian officials reportedly responded by saying that the public credit bureau would not limit the access of private bureaus to loan information and that the US concerns were misplaced.

The US administration likely raised the issue this week during a set of meetings between US Commerce Secretary Wilbur Ross and India’s Commerce Minister Suresh Prabhu in Delhi. In addition to the public credit registry, the two were slated to discuss a number of issues ranging from trade benefits to India’s e-commerce policy.

The RBI has been mulling the establishment of a public credit registry since 2017, finally shortlisting a number of tech majors such as Wipro, TCS, Capgemini and IBM to set up the registry in December 2018.


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