Credit Information Bureaus (CIBs) will function to provide a gamut of credit facilities including storing and processing information related to the credit exposure of all borrowers/clients in the financial system.
This will make data available for the purpose of performing central bank’s supervisory and regulatory function while ensuring the confidentiality of information.
This was outlined in the Royal Monetary Authority’s (RMA) draft rules and regulations on CIB licensing and functioning 2017, an amendment of the CIB regulations 2015.
A CIB is an entity that receives credit information from member institutions and consolidates credit reports available to them. CIB will facilitate the financial institutions in improving the quality of assets. The bureau will also access financial institutions in making proper credit decision upon the complete information and historical repayment.
According to the CIB draft rules and regulations 2017, an entity is required to obtain license from the central bank to function as a CIB in the country.
These rules and regulations have been adopted through power granted under Section 140 of the Royal Monetary Act of Bhutan 2010 and Section 203(f) of the Financial Services Act 2011.
A CIB will also collect data and information from the data provider, compile, store and disseminate information and data from a centralized database, related to the credit exposure of any borrower or client, and connected person, for use by the data user for the purpose of assessing the credit worthiness of a borrower or client.
CIB would also issue Loan Clearance Certificate to an employee who has resigned, retired, expired, availing long term leave and other ways of separation from service.
A data provider shall report to a CIB the information and data set out in a file format as defined by a CIB. The data provider shall provide information on its outstanding credit, closed loan and any other information as may be determined by a CIB.
The data provider would report to a CIB the complete information and the credit data. For active loans, lending institutions should report within five working days of the following month and for closed loans, newly sanctioned loans or any change in borrower they should report on a daily basis.
For utility credit service provider and wholesaler or retailer they should report a utility credit such as bill repayment history and client information on a monthly basis.
In the event a CIB discovers that any of the reported or stored data is inaccurate, the CIB shall seek explanation from the data provider on the cause of the inaccuracy and shall ensure that the data provider takes all necessary measures for the rectification and resubmission of corrected data within five working days.
A CIB will provide credit report to data user for the a person who has made a written application to the data user to avail, extend, renew, review and enhance credit facility and a person who accepts liability for payment on a bill of exchange drawn by a person who has applied to the data user for a credit facility of any type.
A person has the right to request, and receive a hard and softcopy report of information maintained in a CIB data base, on that person. In order to receive the report the person must complete a self inquiry request form and provide proper identification at the time of the request.
The RMA Act 2010 under section 140 states that any CIB, either public or private, will operate under conditions designed by the RMA, or other authorized body, as may be designated by the laws of Bhutan.
Dechen Dolkar from Thimphu