Economic Affairs Secretary Ajay Seth has said that the Reserve Bank of India (RBI) has prepared a draft Bill for setting up a National Financial Information Registry (NFIR) with a view to improve accessibility and affordability of loans.
The proposal to set up a credit repository was discussed by Finance Minister Nirmala Sitharaman at the meeting of the Financial Stability and Development Council in September, he said.
The Reserve Bank has already prepared the draft bill which is currently being deliberated upon, Seth told PTI in a post-budget interaction.
The objective is to build a public infrastructure for credit-related information and right information can be made available by the NFIR to lending agencies.
A National Financial Information Registry will serve as the central repository of financial and ancillary information. This will facilitate efficient flow of credit, promote financial inclusion, and foster financial stability, the Finance Minister had announced in her first Budget speech.
A new legislative framework will govern the proposed credit public infrastructure, and it will be designed in consultation with the RBI, she had said.
Apart from having information about loans, Seth said, the proposed NFIR would be a repository for ancillary information like tax paid, electricity consumed pattern etc.
“If a creditor or a potential creditor doesn’t have adequate information, it will put a risk and thereby the interest rate will go up. On the other hand, if risks are well understood, then there can be finer pricing of the credit,” he said.
Going forward, he said, the institution would help in appropriately pricing of loans and bring down risk for all stakeholders.