Credit Information Companies (Regulation) Act, 2005
No: 30 Dated: Jun, 23 2005
The Credit Information Companies (Regulation) Act, 2005
(Act No. 30 of 2005)
An Act to provide for regulation of credit information companies and to facilitate efficient distribution of credit and for matters connected therewith or incidental thereto.
Be it enacted by Parliament in the Fifty-sixth Year of the Republic of India as follows:-
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.—(1) This Act may be called the Credit Information Companies (Regulation) Act, 2005.
(2) It extends to the whole of India.
(3) It shall come into force on such date1 as the Central Government may, by notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act, and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
2. Definitions.—In this Act, unless the context otherwise requires,—
(a) “board” means the Board of directors of a credit information company;
(b) “borrower” means any person who has been granted loan or any other credit facility by a credit institution and includes a client of a credit institution;
(c) “client” includes—
(i) a guarantor or a person who proposes to give guarantee or security for a borrower of a credit institution; or
(ii) a person—
(A) who has obtained or seeks to obtain financial assistance from a credit institution, by way of loans, advances, hire purchase, leasing facility, letter of credit, guarantee facility, venture capital assistance or by way of credit cards or in any other form or manner;
(B) who has raised or seeks to raise money by issue of security as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), or by issue of commercial paper, depository receipt or any other instrument;
(C) whose financial standing has been assessed or is proposed to be assessed by a credit institution or any other person or institution as may, by notification, be directed by the Reserve Bank;
(d) “credit information” means any information relating to—
(i) the amounts and the nature of loans or advances, amounts outstanding under credit cards and other credit facilities granted or to be granted, by a credit institution to any borrower;
(ii) the nature of security taken or proposed to be taken by a credit institution from any borrower for credit facilities granted or proposed to be granted to him;
(iii) the guarantee furnished or any other non-fund based facility granted or proposed to be granted by a credit institution for any of its borrowers; (iv) the credit worthiness of any borrower of a credit institution;
(v) any other matter which the Reserve Bank may, consider necessary for inclusion in the credit information to be collected and maintained by credit information companies, and, specify, by notification, in this behalf;
(e) “credit information company” means a company formed and registered under the Companies Act, 1956 (1 of 1956) and which has been granted a certificate of registration under sub-section (2) of section 5;
(f) “credit institution” means a banking company and includes—
(i) a corresponding new bank, the State Bank of India, a subsidiary bank, a co-operative bank, the National Bank and regional rural bank;
(ii) a non-banking financial company as defined under clause (f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934);
(iii) a public financial institution referred to in section 4A of the Companies Act, 1956 (1 of 1956);
(iv) the financial corporation established by a State under section 3 of the State Financial Corporation Act, 1951 (63 of 1951);
(v) the housing finance institution referred to in clause (d) of section 2 of the National Housing Bank Act, 1987 (53 of 1987);
(vi) the companies engaged in the business of credit cards and other similar cards and companies dealing with distribution of credit in any other manner;
(vii) any other institution which the Reserve Bank may specify, from time to time, for the purposes of this clause;
(g) “credit scoring” means a system which enables a credit institution to assess the credit worthiness and capacity of a borrower to repay his loan and advances and discharge his other obligations in respect of credit facility availed or to be availed by him;
(h) “notification” means a notification published in the Official Gazette of India;
(i) “prescribed” means prescribed by rules made under this Act;
(j) “regulations” means regulations made by the Reserve Bank under this Act;
(k) “Reserve Bank” means the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);
(l) “specified user” means any credit institution, credit information company being a member under sub-section (3) of section 15, and includes such other person or institution as may be specified by regulations made, from time to time, by the Reserve Bank for the purpose of obtaining credit information from a credit information company;
(m) words and expressions used herein and not defined in this Act but defined in the Reserve Bank of India Act, 1934 (2 of 1934) or the Banking Regulation Act, 1949 (10 of 1949) or the Companies Act, 1956 (1 of 1956) shall have the meanings respectively assigned to them in those Acts.
CHAPTER II
REGISTRATION OF CREDIT INFORMATION COMPANIES
3. Prohibition to commence or carry on business of credit information.—Save as otherwise provided in this Act, no company shall commence or carry on the business of credit information without obtaining a certificate of registration from the Reserve Bank under this Act.