TransUnion CIBILTM, Equifax, Experian, and CRIF High Mark are the four credit information bureaus in India. The Reserve Bank of India’s Department of Banking Operations and Development has direct oversight of these credit information bureaus. According to the provisions of the 2005 Credit Information Companies (Regulations) Act (CICRA), all banks, financial institutions, and non-bank financial companies (NBFCs) are required to report every retail loan taken out by a consumer to all or any four credit information bureaus. They also have to keep credit agencies up to date on the consumer’s repayment habits. This enables lenders to use this information before issuing loans and gauging customers. Customer data is expected to be kept confidential under the RBI’s outsourcing policies for NBFCs and commercial banks.
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NBFCs- Introduction
A Non–Banking Financial Corporation is a business formed under the Companies Act of 2013 or 1956. An NBFC is defined as a Non–Banking Company that conducts the business of a financial institution under Section 45-I (c) of the RBI Act. It goes on to say that the NBFC must be in the loan and advance business, as well as the acquisition of stocks, equities, debt, and other marketable securities issued by the government or any local authority.
A non-banking financial company is a company whose primary business is to accept deposits under any scheme or arrangement by any mode (Residuary non-banking company). The NBFC industry excludes companies whose primary business is one of the following:
- Agricultural Work
- Industrial Production
- Purchase or sale of any item other than securities
- Providing any services – Sale/purchase/construction of any immovable property
Equifax registration of an NBFC (A Credit Information Bureau)
Equifax is a credit information company that operates one of four credit bureaus in India. It is a separate entity licenced by the Federal Reserve Bank of India (RBI) and registered under the Credit Information Companies Act, 2005, to provide credit information products and related services to its members. Equifax’s members include banks, non-bank financial companies, and financial institutions. Member institutions are required to provide information about each customer’s credit-related activity.
It collects and systematises this data on an individual/corporate basis and makes it available in a readable format. This information enables lenders to make informed lending decisions and to operate in a more transparent, efficient, and cost-effective manner than would otherwise be possible.
Member institutions report on individuals’ credit behaviour to the agency (and the opposing credit bureaus in operation) on a regular, usually monthly basis. As previously stated, the agency then processes this information into a usable and readable format and provides credit information reports based on the knowledge provided by the members. It also offers a credit score and a variety of other services, in addition to other related products.
As a credit rating agency, it keeps track of all borrowing and credit-related activities of individuals and businesses, including all transactions involving loans, credit cards, and borrowed funds. This extensive data provided by the agency enables lenders to understand an individual’s or corporation’s report so that they can make informed decisions when evaluating prospective lenders for loans.
Information provided by the Equifax to the Lenders:
- A thorough examination of a borrower’s credit history across all loan accounts held.
- A borrower’s repayment history/behavior as reported by lenders
- Identification information such as a potential borrower’s name, address, and other information provided by member companies.
- Data on prospective borrower creditworthiness supplemented the information provided by contributing members.
- Access to Equifax ePORT (upon registration), which allows member institutions to view all of the above data.
Information provided by the Equifax to the Individual/Business Owner
- Access to the borrower’s credit history as reported by the lender. This allows borrowers to ensure that the information reported is accurate and up to date, thereby reducing duplication and misinformation and assisting in the detection of fraud or identity theft.
- Access to credit information reports aids in keeping track of one’s credit worthiness and repayment history, which leads to good credit behaviour.
Registration Process for Equifax ePORT
It is an online portal accessible to Equifax members via the company’s official website. Lenders, banks, and financial institutions can use this virtual portal to obtain an individual’s credit record/history when applying for a loan from a bank, financial institution, or private office. The following steps guides through the registration process at Equifax ePort:
The Application process for Equifax Membership
Because it is a virtual portal, an individual or NBFC can apply online at Equifax’s official website or call the customer service number. To complete the registration process, simply follow the steps/instructions provided at the portal or by the custom care assistant members. After successfully registering, an individual will have access to all of Equifax’s data.
The Application process for ePORT access
Equifax’s official website includes a link that allows an individual/NBFC to register for ePORT. Click on the provided link and enter the necessary information, such as:
- An individual’s full name
- A company’s name
- Existing Customer Account Number, and so forth.
Conclusion
The Credit Information Companies (Regulation) Act, 2005 (CIC Act), is legislation enacted by the Government of India to manage the actions of credit information companies (CICs) in India and to facilitate the efficient distribution of credit, as well as for matters related to an equivalent.
The Federal Reserve Bank of India and the Government of India has enacted the Credit Information Companies Regulations, 2006 and thus the Credit Information Companies Rules, 2006 issued under the Act, respectively, in accordance with the CIC Act.
Hence, when a company’s financial assets account for more than half of its total assets and income from financial assets accounts for more than half of its gross income, it is engaging in financial activity as its primary business. The RBI will register a company that meets both of these criteria as an NBFC under any one of the four credit information bureaus available in India, for instance, Equifax.
