New RBI Norms Allow Fintechs To Access Credit Bureaus

Now, fintech companies can access credit data bureaus and can register as customers as per the latest guidelines of the Reserve Bank of India (RBI).  

In November 2021, the RBI published a notification on their website that stated that the Credit Information Companies Regulation 2006 has been amended. The notification 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. 

 This new notification will reverse the previous notification of 2019 that stated the central bank won’t be sharing client credit data with any fintech companies. RBI has communicated to the banks and non-banking financial companies (NBFCs) that appointing fintech companies as brokers will be considered a violation of the norms of the RBI.  

 Under the recent amendment, any company entity with a web price of over Rs 2 crore can access data to improvise their services to the lending entities (banks and finance corporations). But only Indian-owned with diversified possession can access these data. One of the major eligibility criteria to access such data includes a certification from Cybersecurity and Infrastructure Security Agency (CISA). Thus corporates who have certification from CISA licensed auditors to show that they have sturdy and safe data know-how system in place can only get access to data. 

 There are currently four credit information bureaus that are functional. These bureaus include TransUnion Cibil, Equifax, Experian and CRIF Mark. As per the lenders, fintech who do not have a non-banking financial company licence (NBFC) but facilitate credit through a partnership with banks can benefit from this new amendment of the RBI, reported the Times of India. This would also facilitate e-commerce players to offer the ‘buy now pay later option in partnership with lenders on their website.