Reserve Bank India (RBI) deputy governor NS Vishwanathan said that RBI wants to strengthen the credit bureaus and it has already started with the process. In order to attain optimum results, the government will have to make some legislative amendments. In the process talking about the robust growth in smaller companies in the micro, small and medium company sector, Vishwanathan said: “A number of small finance banks have been licensed to lend to the MSME sector, smaller size companies with a loan size of `10 lakh posted 30% yearly credit growth and those with `10 lakh to `50 lakh posted a 50% credit growth in Q1FY19.”
While delivering the keynote address at the national banking summit organised by IBA and Ficci, the deputy governor added that from the regulator’s point of view, it is very important to contain the probability of failure of systematically important banks and framework of containing any contagion risks. He added that Domestic systematically important bank (D-SIB) classification will hopefully make domestic banks more risk averse. While talking about the change in requirements from the global systematically important banks ( G-SIB), he said, “the elevated requirements from G-SIBs include an improvement in several functions such as the risk managements functions, risk data aggregation capabilities and internal control.
Vishwanathan also spoke about the continuous demands from the power and telecom sectors to share their customers’ payment history with the credit bureaus. Both the sectors want the definition of default to be extended beyond the domain of the financial sector. “We have several measures in that direction (strengthening credit bureaus). Some of these are in terms of expanding the database… database that credit bureaus require, certain legal amendments and that is a work in progress,” Vishwanathan added.