Master circulars on eCIB: SBP directs FIs to ensure strict compliance

KARACHI: While issuing master circulars on Electronic Credit Information Bureau (ECIB), the State Bank of Pakistan (SBP) has asked Financial Institutions for strict compliance.

The Electronic Credit Information Bureau was established by the State Bank in 1992 under section 25-A of the Banking Companies Ordinance 1962, to help the Financial Institutions (FIs) in making informed lending decisions. Since its inception, the SBP has issued various circulars/directives from time to time.

Now, in order to facilitate all the eCIB member FIs to ensure meticulous compliance with these circulars/directives, SBP has consolidated the existing instructions in the form of this Master Circular. The Master Circular is a compilation of all the applicable instructions and clarifications issued by SBP from time to time relating to eCIB and will supersede the previous instructions.

Accordingly, the SBP has advised all member FIs to ensure compliance with the master circular in letter and spirit. Failure to comply with these instructions will attract penal action (s) against the concerned FIs under the relevant legal and regulatory provisions, the SBP warned.

Credit Information Bureau collects and collates credit data on borrowers from its member Financial Institutions (FIs). The financial data is then aggregated in the system and the resulting information (in the form of credit reports) is made available online to the member FIs for the purpose of credit assessment and credit risk management. The major purpose of this system is to enable the Financial Institutions (FIs) to know the credit history of their current and prospective customers thus enabling them to make informed and timely lending decisions.

Currently, the member FIs can generate two types of reports from the eCIB system, ie, eCIB report for Consumer/Individual Borrowers and secondly for Corporate Borrowers by paying the service charges as specified by the SBP from time to time.

Consumer Credit Report reflects the credit information of individuals/sole proprietorship borrowers while Corporate Credit Report reflects the credit information of public/private companies, firms/partnerships, corporations, and other forms of businesses.

The eCIB report contains position of funded & non-funded facilities including the amount of outstanding, overdue, write-off and repayment history of the borrower. However, eCIB report does not debar any FIs from taking credit exposure on borrowers with over dues/late payments/write-offs in their credit reports.

The FIs make their own lending decisions based on their credit policies, the past track record of borrowers, and their repayment capacity.

Under section 25-A of the Banking Companies Ordinance 1962, the information of the eCIB is confidential and can only be used by SBP and its member FIs for their internal use and cannot be shared, published, or disclosed.

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