The Reserve Bank of India has prescribed new rules that will allow a wider range of companies to access to credit data of millions of Indians. Previously only regulated companies could access the credit information from credit bureaus. As per new RBI norms fintech companies can access credit data bureaus and can register as customers as per the latest guidelines of the Reserve Bank of India. RBI published a notification on their website on 21 November, stated that the Credit Information Companies Regulation 2006 has been amended which  enabled “entities engaged in the processing of information, for the support or benefit of credit institutions and satisfying the criteria laid down by the RBI” to access particular person credit histories, which  enable faster turnaround of credit requests especially for small ticket loans where lending is purely based on a certain criterion with no or limited manual intervention. 

Earlier RBI stated that the central bank won’t be sharing client credit data with any fintech companies & also communicated to the banks and NBFCs that appointing fintech companies as brokers will be treated as a violation of the norms of the RBI. These new changes can liberalise the access to credit information to companies & also reduce the time needed for information exchange in the upcoming segment.

 RBI’s new rule suggests that any company incorporated in India and controlled by Indians can now be classified as a specified user & these entities should have diversified holding with not less than 3 years of experience to access data. This would mean that fintech companies will be allowed to classify as specified users to access information in a regulated manner as per the Act.

 Corporate entity with a net worth of over Rs 2 crore can process information to support regulated lending entities (banks and finance companies) & the company has to be Indian-owned with diversified ownership. A key requirement is that the entity should have a certification from Cybersecurity and Infrastructure Security Agency, certified auditor that it has a robust and secure information technology system in place.  While fintech players have been able to help financial institutions with alternate data such as transaction history, payments behavior of MSMEs, having access to credit bureau ratings will help Fintechs avails a curated list of borrowers based on their credit profile. This is a big win for fintechs and their partner Banks and NBFCs.”