Reserve Bank of India (RBI) issued eligibility criteria for entities that harness data from credit information companies (CICs) or credit bureaus. These newly-formed guidelines said that a company’s net worth must be at least Rs 2 crore and owned and controlled by resident Indian citizens to become a designated user with a credit bureau, which comes amid accusations of lending applications with Chinese ties functioning in India.
According to the eligibility criteria for entities to be categorised as Specified User under clause (j) of Regulation 3 of the Credit Information Companies (Amendment) Regulations, 2021:
- A company incorporated in India or a Statutory Corporation constituted in India shall be the entity.
- The governing statute of the Statutory Corporation or Memorandum of Association of the Company, as the case may be, should allow the business/activity of processing of information for the support or benefit of credit institutions.
- The guidelines said a company’s net worth must be at least two crore rupees as of the most recent audited balance sheet, and it must meet the criterion on a continuous basis.
- Also, the company must be owned and controlled by resident Indian citizens/an Indian company owned and controlled by resident Indian citizens in the case of a company. The ownership of the company shall be well diversified.
- The corporation must have at least three (3) years of experience in the business/activity of processing information for the assistance or benefit of credit institutions, as well as a clean track record.
- The company, its promoters, or any of its directors should not have been convicted of a crime involving moral turpitude or a financial crime at any time in the past.
- In addition, the entity should have a certification from CISA certified auditor that it has a robust and secure Information Technology (IT) system in place for preserving and protecting the data relating to the credit information as per the provision of the Credit Information Companies (Regulation) Act, 2005 and Rules and Regulations framed thereunder and any other applicable Regulations, Guidelines in this regard.