Credit bureaus to note Covid loan rejigs


2021-03-12 22:30:00

MUMBAI: The RBI has asked credit information companies (CICs, or credit bureaus) to create new information fields in their borrower history to reflect loans that are restructured due to Covid. The changes will apply to databases of consumer loans, credit to businesses and microfinance.
The move will enable banks to restructure loans to borrowers without having to report them as delinquent to the credit rating agencies. The absence of the new category would have created a problem for the classification of borrowers.
“The modifications are being made to enable lenders to report the information relating to restructured loans to CICs as envisaged in the circular dated August 6, 2020, on the resolution framework for Covid-19 related stress,” the RBI said. The August circular allows banks to do a one-time restructuring for Covid-hit businesses.
While allowing a moratorium on loans in its March 27, 2020 circular, the RBI had made it clear to banks that the borrower’s credit profile should not suffer if they chose to delay repayment because of the lockdown.
“The rescheduling of payments, including interest, will not qualify as a default for supervisory reporting and reporting to CICs by the lending institutions. CICs shall ensure that the actions taken by lending institutions under the above announcements do not adversely impact the credit history of the beneficiaries,” the RBI had said in March 2020.



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