Banking · Credit Information Financial Market Infrastructure
Under the Credit Information Companies (Regulation) Act (CICRA), 2005, and associated RBI guidelines, which statement is incorrect regarding the regulatory obligations and credit infrastructure for member banks in India?
- 1Every credit institution (such as ApexBank) must become a member of at least one CIC and submit credit information accurately at specified periodic intervals.
- 2Credit Rating Agencies (CRAs) are primarily regulated by SEBI, and their ratings represent an opinion on the relative default risk of a debt instrument, distinct from a CIC's historical record keeping.
- 3A member bank is required to inform a retail borrower of the reasons for rejecting a loan application if the rejection is based on an adverse Credit Information Report (CIR) from a CIC.
- 4A member bank is mandated by CICRA, 2005, to submit credit information about both retail and corporate entities, and the formal commercial Credit Rating assigned by a CRA must be collected and submitted to the CICs by the bank as mandatory transactional data.✓
Correct answer
A member bank is mandated by CICRA, 2005, to submit credit information about both retail and corporate entities, and the formal commercial Credit Rating assigned by a CRA must be collected and submitted to the CICs by the bank as mandatory transactional data.
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