Provision of data for reforms: Utilities cos to hold meetings with SBP, credit bureaus

The federal government is to direct power and gas utilities companies including K-Electric to hold meetings with State Bank of Pakistan (SBP) and licensed credit bureaus for provision of data for reforms under the Ease of Doing Business (EODB), sources in Finance Division told Business Recorder.

Credit Bureaus Act 2015 was enacted on August 19, 2015 to provide a legal and regulatory framework for incorporation and functioning of credit bureaus. After enactment of Credit Bureaus Act 2015, the State Bank of Pakistan (SBP) issued requisites rules, regulations and licensing criteria under this Act to provide regulatory and licensing framework for credit bureaus.

Based on the legal framework for private credit bureaus, the SBP has granted licence to two credit bureaus, i.e, Data Check Ltd and M/s Aequitas Information Services Limited (AISL).

On the basis of data acquired from financial institutions, retailers and utility companies, these credit bureaus can provide value-added services. The value-added services normally offered by private credit bureaus, include credit scoring, anti-fraud tools, fraud detection, portfolio monitoring services, debt collection services and marketing services. Anti-fraud products are developed using data from applications and other data sources in addition to account data.

Debt collection and marketing oriented products and services rely extensively on geo-demographical data such as compilation of address of the debtor or applicant and recent enquiries regarding specific financial products among types of data.

"Data provision by utility companies to credit bureaus is a key area of reform under the Ease of Doing Business (EODB) which if adopted by the private credit bureaus will improve country ranking among types of data," the sources added.

In terms of sections 2(1)(i)(iii), 2(j), 10 and section 34 read with section 2(1)(q) and section 11 of the CBA, 2015 the federal government shall issue notification to make it obligatory for the utility companies including telecoms to share data with the licensed credit bureaus. It has already been notified that all the companies providing wireless telecommunications services to the consumers to be members of a credit bureau and furnish information in accordance with the Act 2015 and regulations made thereunder.

The next step would be bringing other utility companies in the process. In this regard, a number of meetings have been held at Finance Division and in the meeting held on November 29, 2019 at the Ministry of Finance the following decisions were taken: (i) arrange a meeting of the State Bank of Pakistan and licensed credit bureaus with the management of K-Electric; (ii) necessary directives to the respective gas companies for holding meetings with licensed credit bureaus in the presence of credit bureaus; (iii) prioritize four Discos, viz.

Lahore Electric Supply Company (Lesco), Faisalabad Electric Supply Company (Fesco), K-Electric and Multan Electric Power Company (Mepco) to issue necessary directives to them for holding meetings with SBP and licensed credit bureaus; and (iv) draft notification will be shared with Ministry of Energy (Power Division), Petroleum Division, Oil and Gas Regulatory Authority (Ogra), National Electric Power Regulatory Authority (Nepra) and the SBP for consultation.

When contacted, Chief Executive Officer (CEO), KE Moonis Alvi said that he has not held any such meeting with SBP or credit bureaus so far, however, he held a meeting with an IMF lady over lunch but stated that no detailed discussion took place with her.