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.
As far as comprehensive review of financial sector regulators are concerned, Seth said, it has to be seen in the larger perspective or government efforts that each part of the government and regulators should look at, making things simpler, making doing business easier and reducing the cost of compliance.
It should be seen in that context and the review will be done by individual regulators, he said. To promote ease of doing business, the government has removed 39,000 compliances without diluting anything.
RBI is doing it after two decades, he said, adding, “They (RBI) did their review. They came out with a report in early part of 2022 and I believe some more is happening. Other regulators have been doing it… they will take it to their respective boards (for approval after review).”
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