The Reserve Bank is empowered to collect credit information from banking companies and to furnish such information in consolidated form to any banking company applying for the same along with the prescribed fee. The term credit information means any formation relating to –
(1) the amounts and the nature of loans or advances and other credit facilities granted by a banking company to any borrower or class of borrowers;
(2) the nature of security taken from any borrower or class of borrowers or credit facilities granted to him or to such class;
(3) the guarantee furnished by a banking company for any of its customers or any class of its customers;
(4) the means, antecedents, history of financial transactions and the creditworthiness of any borrower or class of borrowers; and
(5) any other information which the bank may consider to be relevant for the more orderly regulation of credit or credit policy.
The term, credit information thus has much wider coverage and significance.
The term banking company includes for this purposes, the scheduled and non-scheduled banks, the State Bank of India and its subsidiary banks, the nationalized banks and any other financial institutions notified by the Central Government. The term borrower is also defined so as to include in case of a company its subsidiaries also, in case of Hindu undivided family any member if the family or any firm in which such member is partner; in case of a partnership, any partner or any form in which he is a partner and in case of an individual of any firm in which such an individual is a partner.
The credit information is required in respect of big borrowers only. The Reserve Bank has directed the bask to submit credit information on the prescribed forms. The credit limits for the purposes of submitting half yearly returns (as on the last Friday of April and October every year) by banks to Reserve Bank relating to information on borrowers have been raised in 1984 from Rs 5 lakh and over to Rs 10 lakhs and over in case of secured advances and from Rs 1 lakh and over to Rs 5 lakhs and over in respect of unsecured advances.
Section 45-C empowers the Reserve Bank to direct any banking company to submit to it statements relating to credit information in the specified time and form. Every banking company shall be bound to comply with such direction.
Under Section 45-D a banking company may make an application to the Reserve Bank to furnish the applicant with such credit information as may be specified in the applications in connection with any person. The Reserve Bank shall furnish the credit information in its possession but it shall not disclose the names of the banking companies which have submitted such formation to the Bank.
Any credit information submitted by a banking company to the Reserve Bank or by the Reserve Bank to any banking company shall be treated as confidential and shall not be published or disclosed except for the following purposes specified in the Act:
(1) Disclosure by any banking company of any formation furnished to the Reserve bank with the previous permission of the Reserve Bank.
(2) Publication by the Reserve Bank of any information collected by it under this Section in such consolidated form as it may think fit without disclosing the name of nay banking company or its borrowers and
(3) The disclosure or publication by the banking company or by the Reserve Bank of any credit information to any other banking company or in accordance with the practice and usage customary among bankers or as permitted or required under any other law.