RBI asks lenders to report restructured accounts to credit bureaus

“Banks/AIFIs (all-India financial institutions)/NBFCs (non-banking financial companies) should make necessary modification to their systems and commence reporting the above information to CICs (credit information companies) within two months from the date of this circular. CICs shall make necessary modifications to their system to reflect the above changes,” the RBI said in a notification.

The Reserve Bank of India (RBI) on Friday issued a data format for banks and other lenders to report accounts restructured due to Covid-19 to credit bureaus. It directed them to make the necessary modifications to their systems within the next two months.

“Banks/AIFIs (all-India financial institutions)/NBFCs (non-banking financial companies) should make necessary modification to their systems and commence reporting the above information to CICs (credit information companies) within two months from the date of this circular. CICs shall make necessary modifications to their system to reflect the above changes,” the RBI said in a notification.

The uniform credit reporting format has two annexes. Annex-I contains two formats for credit reporting – consumer bureau and commercial bureau, whereas annex-II contains the credit reporting format for the microfinance institution (MFI) segment. The RBI on Friday modified the three formats.

Under the consumer bureau, the label of the field ‘written off and settled status’ was modified as ‘credit facility status’ and it will also have a new catalogue value – ‘restructured due to Covid-19’. Under the commercial bureau, the existing field ‘major reasons for restructuring’ will have a new catalogue value, ‘restructured due to Covid-19’. In the MFI bureau, the existing field ‘account status’ will have a new catalogue value – ‘restructured due to Covid-19’.

Lenders have already been reporting restructured accounts to CICs, and the revised format requires them to specifically identify loans being restructured under the Covid relief scheme.

The restructuring scheme has been utilised sparingly, with most lenders saying that they received very few requests for availing the scheme. In late December, Icra revised its estimate for loan restructuring volume to 2.5-4.5%, from initial estimates of 5-8% of advances.