Credit Information Companies (CICs) in India are regulated by the Reserve Bank of India (RBI) and the Credit Information Companies (Regulation) Act, 2005. The Act provides for the establishment of CICs and sets out their registration, regulation, and functioning. The RBI, in consultation with the Securities and Exchange Board of India (SEBI) and the Insurance Regulatory and Development Authority of India (IRDAI), issues guidelines for the functioning of CICs.
The regulatory guidelines governing CICs in India include the following:
- Registration: CICs must register with the RBI to operate in India. The RBI has prescribed the eligibility criteria, application process, and other requirements for registration. The RBI may also cancel the registration of a CIC if it fails to comply with the prescribed guidelines.
- Ownership: The Act stipulates that the ownership of a CIC must be diversified, with no single entity holding more than 10% of the paid-up capital. The RBI has also prescribed guidelines for the composition of the board of directors and the management of CICs.
- Information disclosure: CICs are required to disclose information about their operations and financials on their website and in their annual reports. They must also provide credit information reports to their subscribers, which include banks, financial institutions, and other entities.
- Data protection: CICs are required to protect the confidentiality and security of the data they collect from borrowers and other sources. They must also obtain the consent of individuals before collecting and sharing their credit information.
- Dispute resolution: CICs must have a mechanism for resolving disputes with borrowers and other stakeholders. They must also appoint a nodal officer to address complaints and grievances.
- Governance: CICs are required to have robust corporate governance practices, including risk management, internal controls, and compliance. They must also undergo periodic audits and submit reports to the RBI.
Overall, the regulatory guidelines aim to ensure that CICs operate in a transparent, accountable, and customer-centric manner, while also safeguarding the confidentiality and security of credit information.