HO: Credit Circular No: 04/2019 DATE:01.01.

2019

TO ALL OFFICES

Consolidated Circular - Drawing Credit Information Reports (CIRs) on the

Borrowers from Database of Credit Information Companies (CICs)

Detailed guidelines in respect of drawing of CIRs have been circulated vide HO

Credit Circular No.09/2018 dated 07.03.2018.
Consequent upon the amalgamation of the 3 RRBs in Punjab into one entity and in order to
obviate cross reference to different loan circulars by Incumbent Incharge, we have
consolidated guidelines with regard to ‘Drawing Credit Information Reports (CIRs)
on the Borrowers from Database of Credit Information Companies (CICs) ’ as per
enclosed Annexure.

All concerned are advised to note the guidelines for compliance .

(Sachidanand Dubey)
General Manager

INDEX: CREDIT INFORMATION COMPANIES (CICs)

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 Annexure

Guidelines for drawing Credit Information Reports (CIRs) on the Borrowers

from the Database of Credit Information Companies (CICs)

Credit Information Companies (CICs) have been set up for creating a database
to be used by the member banks for extraction of Credit Information Reports
(CIRs) on the borrowers for considering their request for credit facilities. After
the operationalization of Credit Information Company (Regulation) Act 2005,
banks/ FIs can submit data to Credit Information Companies without obtaining
consent of the borrowers / co- obligants / guarantors.

2. As per RBI guidelines every Credit Institution has to become member of all
the Credit Information Companies (CICs). Our bank is presently member of all
the four CIC s vi z CIBIL, EQUIFAX, EXPERIAN & CRIF HIGHMARK.

3. Since CIRs give vital information about the prospective clients, drawing of
CIR from CICs is mandatory for Borrowers, Guarantors & Co -obligants (both
Consumer & Commercial Category Accounts), requiring fresh credit facilities
before sanction of facilities as well as at the time of Renewal/ Review/
Enhancement of such facilities except in certain exempted categories of
advances. It has been observed that in most of the fraud cases, the appraisal
guidelines are not followed and drawing of CIR from CICs is ignored.

It may be mentioned that reporting of accounts under Consumer / Commercial

Bureau depends upon category of borrowers and not on purpose of the loan. For
convenience of the field, it is clarified that :

 CIBIL is operating two bureaus as under :-

i) Consumer Bureau – It maintains data of all individual customers

irrespective of purpose of loan e.g. a loan in the name of Mr. Amitabh
Kumar for acquiring a commercial vehicle for business purpose will
be reported under Consumer Bureau.

ii) Commercial Bureau – It maintains data of all non -individual

customers (limited companies, partnership firms, proprietorship,
HUF, etc.) irrespective of purpose of loan.

 Equifax is operating Consumer Bureau and reports are

i. Demographic Report
ii . Basic Report
iii . Enhanced Report

Our bank is using Basic and Enhanced report for consumer category and
not using the demographic report .
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  Experian provides only the consumer category of customers.

 CRIF High Mark - It provides report for consumer category of

customers .
4. Credit Institutions submit the information on the obligants to the
CICs for creation/ updation of their data base. In our bank data captured from
the CBS/LADDER is forwarded to the CICs on monthly basis for creation/
updation at their end. The irregularities/ defaults pertaining to a particular loan
account thus get reflected in the CIRs extracted on the obligants from this data
base.

5. In order to use the CICs database, the system of drawing CIRs by field
functionaries, operational guidelines in this regard viz. accessing CICs
Website, CIR Charges (Consumer & Commercial accounts), Billing &
Expenditure Accounting, maintenance of record of CIRs drawn from CICs,
password/ user ID etc., were issued by Credit Section HO. .

However, guidelines relating to Mandatory drawing of CIRs/ Exempted

Categories, CIR Charges for Commercial Category of Accounts & consumer
categories are as under:

Mandatory Drawing of CIRs/ Exempted Categories

Drawing of CIRs shall be mandatory for Borrowers & Guarantors/ Co -
obligants (both Consumer & Commercial Category Accounts), requiring fresh
credit facilities before sanction of facilities as well as at the time of
Renewal/ Review/ Enhancement of such facilities. Drawing of CIRs in certain
cases, will be as under: -
(i) In proprietorship accounts, CIRs should be drawn for the firm and
proprietor / guarantor .
(ii) In partnership accounts, CIRs should be drawn for the firm and each
individual partner/ guarantor.
(iii) In case of company accounts, CIRs should be drawn on the Co. and
each individual director/ guarantor also.
(iv) In case of Trust account, CIRs of the Trust and those trustees
authorized to act on behalf of the Trust, should be drawn.
(v) In case of corporate guarantees, CIRs should be drawn on the
company standing as guarantor.
(vi) In case of Allied / Associate Concerns of the borrowing entity, it is
prudent to draw CIRs of the allied/ associate concerns.

The operational guidelines for drawing CIRs from the database of CICs are as
under:
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 Loan Amount CIRs
Less than Rs.5,00,000/ i. Where score is required:
- One CIR with score from CIBIL or Experian or
Equifax or CRIF Highmark.
ii. Where score is NOT required:
One CIR without score from CIBIL or Experian
or Equifax or CRIF High Mark.
Rs.5,00,000/ - and Two CIRs as under:
above i. One CIR with score from CIBIL is mandatory
ii. One compulsory CIR without score from
Experian or Equifax or CRIF High Mark.
In case of Two CIRs as under:
customers
having credit risk i. One CIR with score from CIBIL is mandatory
rating
‘B2 & B3 ’ and below ii. One compulsory CIR without score from
‘B 2 &
B3 ’ Experian or Equifax or CRIF High Mark.

As the cost of CIR with score is higher than CIR without score, such
reports may be drawn, where the score is required for ‘PGB Score
Models’. In all other cases CIRs without score may be drawn .
6. Exemptions:
Drawing of CIRs shall be exempted in case of following category of advances:
(a) Advance against Bank’s own Deposits, Govt. Securities/Bonds,
PSU Bonds, Postal Securities, LIC Policies, Shares,Debentures &
Mutual Funds.
(b) Advances against 100% Cash Margin.
(c) All Staff Loans.
(d) Advance against gold jewellery/ ornaments
(ii) CIR Charges
Charges for drawing CIRs have been circulated by H.O. from time to time.
For ready reference of the branches, present charges for drawing CIRs are
reproduced below: -
(a) Consumer Category of Accounts
Fixed charges of Rs.65/ - for CIBIL and Rs.50/- for Equifax are required to
be recovered in advance from prospective borrowers and Guarantors/ Co -
obligants for each CIR drawn under Consumer Category of accounts, i.e.
individuals.
(b) Commercial Category of Accounts
The details of charges to be recovered from Commercial Category of
accounts are tabulated below. This amount will be charged only for the
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CIRs which are generated by the CIBIL system. At present CIBIL is only
approved CIC for commercial CIR in our bank.

Please note that for Commercial Category of accounts, charges will not
be levied for ‘No Hit’ reports:

Loan Amount Charges

Irrespective of amount Rs.1100/ - per CI R

The charges so recovered as at (a) & (b) above shall not be refunded even if
the proposal is declined. In case of the existing borrowers, these charges
should be debited to their accounts.

(iii) Maintenance of Record of CIRs drawn from Database of CICs

The branches shall also maintain a record of CIRs drawn from

CICs database and recovery of charges from the borrowers in a separate
Register to be maintained for the purpose both for Consumer &
Commercial Categories as per format advised on the subject.

(iv) Other Misc. Guidelines

(a) The CIRs on Borrowers/ Guarantors/ Co-obligants (Consumer &
Commercial category of borrowers) requesting / availing credit
facilities, (including renewal/ review/ enhancement) should form part
of the proposal and a copy thereof should also be kept in the file along
with other documents for verification by the Inspecting Officer /
Concurrent Auditor during inspection of the branch.

(b) The Branch Heads while sanctioning/ recommending credit facility to

Controlling Offices, shall certify in the proposal that CIRs on
Borrowers/ Guarantors/ Co-obligants have been drawn from
database of CICs and their past history/ dealings with other banks/
FIs have been verified from the details available in the CIRs and no
irregular/ adverse feature, which may jeopardize bank’s interest, have
been observed.

In case no adverse features are noticed in the CIR but his availing
credit facilities from other banks/ FIs is observed, the reasons of
borrower’s approaching our bank may be ascertained. Before
considering borrower’s request for credit facilities in such cases, the
branches must take existing banker’s opinion on the borrower and
other precautionary steps in terms of extant guidelines besides
ascertaining the security aspects so as to safeguard bank’s interest.

(c) In case of fresh loan proposals, if any irregular/ adverse features

about borrower’s past dealings with other banks/ FIs are observed in
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 the CIR, his request for credit facility may be dealt with on merits of
each case.

Similarly, if such irregular features are noticed in case of

renewal/ review/ enhancement of existing facilities, further course of
action as deemed appropriate should be taken by the Sanctioning
Authority on case to case basis to safeguard bank’s interest.

(d) As per extant guidelines, for allowing advance against the security of
Fixed Deposits/ Recurring Deposits/ Saving & Current Account
Balances, besides other documents, application -cum –document
on PGB-308 is to be obtained and PGB -334 is to be obtained for
advance against the security of Shares & Debentures/ Govt.
Promissory Notes/ Bonds, Postal Securities etc. For the purpose of
submitting Credit Information to CICs in respect of borrowal
accounts pertaining to these advances, the additional information is
required to be obtained from the borrowers at the time of
allowing advances as per the format (Appendix -I).

The additional information so obtained on the format be kept with

other loan document s in the file besides making necessary data
entries in his account.

The Branch Heads should ensure that the additional information in

all loan accounts pertaining to the above mentioned securities must be
obtained from the borrowers so as to enable the bank to submit
complete credit information to CICs in respect of our borrowers.

(e) Before considering any fresh credit facilities, as well as at the time of
review/ renewal/ enhancement, the aspect of confirmation for drawing
of CIR from database of CICs has been covered in the ‘Standardized
Appraisal Format’ with a view to ensure that borrower’s profile has
been verified through CICs database.

(f) Access to own Credit Report

(i) In terms of Sec. 21(1) of Credit Information Companies

(Regulation) Act, 2005 provides that “any person, who applies for
grant or sanction of credit facility, from any credit institution,
may request such institution to furnish him a copy of the credit
information obtained by such institution from Credit
Information Company”.

Further, sub section (2) of the said section also specifies that
every credit institution shall on receipt of request as indicated
in sub section (1) shall furnish to such person a copy of the
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 Credit Information subject to payment of charges specified by
the Reserve Bank under the regulations.
ii. Field functionaries are advised to furnish a copy of credit
information obtained by the bank to the Borrowers, Guarantors &
Co -obligants on receipt of written request in this regard.
7. Damodaran Committee Recommendations on CICs
In order to implement Damodaran Committee recommendations on CICs and
measures suggested by IBA, it is advised that:
a. Branches should be doubly careful while reporting a borrower
as defaulter in the LADDER system.

b. It is to be ensured that all the communications to obligants on

delay in payment of dues/ instalments, invariably indicate that
status reporting to CIC is mandatory and any adverse remark
could adversely impact their credit score, which could affect their
ability to raise loans on beneficial terms in future.

9. For any other clarification relating to submission of Credit

Information, Drawing of CIRs and technical aspects of CICs, branches
may send their queries to Head Office.

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 Appendix -I

Additional Information to be obtained from the Borrowers/ Co -obligants for

allowing Advance against Bank Deposits, Postal Securities & Govt.
Securities/ Bonds for Extraction & Submission of Credit Information to CICs.

Borrower Co-obligant
1. NAME
2. CONSTITUTION
3. CATEGORY*
4. NET WORTH
5. DATE OF
BIRTH (DD/
MM/ YY)
6. GENDER (M/ F)

7. QUALIFICATION

8. PAN NO.

9. VOTER ID

10. COMPLETE ADDRESS

11. CITY/ LOCATION

12. COUNTRY

13. DISTRICT CODE

14. PIN CODE

15. PHONE (OFFICE WITH

STD CODE)
16. FAX NO. (OFFICE)

17. PASSPORT NO.

18. DRIVING LICENCE NO.

19. AADHAR CARD NO.

*RESIDENT INDIAN INDIVIDUAL, NON –RESIDENT INDIAN OR

FOREIGN NATIONAL

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