The
Presidents / Chief Executives
All Banks/DFIs
Dear
Sirs/Madam,
REPORTING
TO CREDIT BUREAUS
The role of credit bureaus in the
efficient credit allocation through extension of credit
facilities to SME and consumer sectors has attracted global
attention. However, for smooth functioning of credit bureaus,
an elaborate policy and regulatory framework needs to be
put in place. The State Bank is actively working on a developmental
project focusing on developing a policy and regulatory framework
for credit bureaus. With the completion of this project
and putting in place the necessary policy and regulatory
framework, the credit bureaus would be in a better position
to cater to the credit information needs of their stakeholders.
Meanwhile,
it has been observed that a few private credit bureaus are
already operating in the country and some of the banks/DFIs
are voluntarily reporting credit data / obtaining credit
reports from them. The State Bank has been receiving an
increasing number of complaints from the customers of banks/DFIs
regarding misreporting of their names to the private credit
bureau(s). Upon probing the matter, we have learnt that
the banks/DFIs are, interalia, reporting the amounts reversed
in their books, on negotiated settlement with customers,
as “write-offs” and the amounts under dispute
as “defaults” to the private credit bureau(s).
Furthermore, the banks/DFIs are referring the small borrowers
to the Credit Information Bureau (CIB) of State Bank of
Pakistan despite the fact that their names are reported
by the banks/DFIs to the private credit bureau(s) and not
to the CIB.
In order to curb this tendency on the part of banks/DFIs,
the following instructions are being issued:-
i)
The reversals / write-offs made as a consequence of settlement
in writing, through mutual consent of the bank/DFI and the
borrower, should not be reported as “write-offs”
to a private credit bureau(s).
ii)
The amounts in dispute with the customers, substantiated
with the documentary evidence, should be reported as “amounts
under dispute” and not as “defaults” to
a private credit bureau(s).
iii)
The banks/DFIs shall send an intimation letter to the concerned
borrower before reporting his name as “defaulter”
to a private credit bureau(s). Such letter shall, interalia,
inform the borrower about the implications of reporting
his / her name to a private credit bureau(s) as defaulter,
and allow a reasonable time period (atleast 15 days) for
reconciliation / settlement of overdue liability.
Contd … P/2
- (2) -
iv)
Whenever any further information / clarification regarding
a borrower reported to the CIB or a private credit bureau(s)
is sought by the SBP, the concerned bank / DFI shall be
required to provide such information / clarification to
this Department within three working days of receipt of
such query.
v)
The banks/DFIs shall properly guide their customers as and
when they approach them seeking information about their
outstanding liabilities.
All
banks/DFIs are advised to ensure meticulous compliance of
the above instructions. Failure to comply with these instructions
shall render them liable for a punitive action under the
Banking Companies Ordinance, 1962.