CREDIT INFORMATION COMPANIES (REGULATION) ACT, 2005
(1) This Act may be called the Credit Information Companies (Regulation) Act, 2005.
(2) It extends to the whole of India.
(3)1It shall come into force on such date 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.
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1. The enforcement date for the Act as per notofication No: SO2098(E) is 14.12.2006.
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
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.
(1) Every company which intends to commence the business of credit information shall make an application for registration to the Reserve Bank in such form and manner as may be specified by regulations.
(2) Every credit information company, in existence on the commencement of this Act, before the expiry of six months from such commencement, shall apply in writing to the Reserve Bank for obtaining a certificate of registration under this Act:
Provided that in the case of a credit information company in existence on the commencement of this Act, nothing in section 3 shall be deemed to prohibit such credit information company from carrying on the business of a credit information company, until it is granted a certificate of registration or is by notice in writing informed by the Reserve Bank that a certificate of registration cannot be gra
(1) The Reserve Bank may, for the purpose of considering the application of a company for grant of a certificate of registration to commence or carry on the business of credit information, require to be satisfied, by an inspection of records or books of such company or otherwise that the following conditions are fulfilled, namely:--
(a) that the applicant company has minimum capital structure referred to in section 8;
(b) that the general character of the management or the proposed management of the applicant company shall not be prejudicial to the interest of its specified users, clients or borrowers, or other credit information companies;
(c) that any other condition, the fulfilment of which in the opinion of the Reserve Bank, shall be necessary to ensure that the commencement or carrying
(1) The Reserve Bank may cancel a certificate of registration granted to a credit information company under sub-section (2) of section 5 if such company,--
(i) ceases to carry on the business of credit information; or
(ii) has failed to comply with any of the conditions subject to which the certificate of registration has been granted to it; or
(iii) at any time fails to fulfil any of the conditions referred to in sub-clauses (a) to (c) of sub-section (1) or sub-section (2) of section 5; or
(iv) fails--
(a) to comply with the provisions of any law for the time being in force or any direction issued by the Reserve Bank under the provisions of this Act; or
(1) A credit information company aggrieved by the order of rejection of an application for grant of certificate of registration under section 5 or cancellation of certificate ( of registration under section 6, may prefer an appeal to the Central Government or any other authority or tribunal which may be designated by rules made by the Central Government, within a period of thirty days from the date on which such order of rejection or cancellation, as the case may be, is communicated to the credit information company.
(2) The decision of the Central Government or the authority or tribunal referred to in sub-section (1) where an appeal has been preferred to it under sub-section (1), or of these Reserve Bank where no such appeal has been preferred, shall be final:
Provided that before making any order of rejection of an appeal, the applic
(1) The authorised capital of every credit information company shall be a minimum of thirty crores:
Provided that the Reserve Bank may, by notification, increase the minimum amount of authorised capital to any amount not exceeding fifty crores.
(2) The issued capital of every credit information company shall not be less than twenty crores:
Provided that the Reserve Bank may, by notification, increase the issued capital to any amount not exceeding the minimum amount of authorised capital as referred to in sub-section (1).
(3) The minimum paid up capital of every credit information company at any time shall not be less than seventy five per cent. of the issued capital.
(1)Notwithstanding anything contained in any law for the time being in force, or inany contract to the contrary, every credit information company in existence onthe commencement of this Act, or which comes into existence thereafter, shallhave one of its directors, who may be appointed on whole-time or on a part-timebasis as chairperson of its board, and where he is appointed on whole-time basisas chairperson of its board, he shall be entrusted with the management of thewhole of the affairs of the credit information company:
Providedthat the chairperson of the board of the credit information company shallexercise his powers subject to the superintendence, control and directions ofthe board.
(2)Where a chairperson is appointed on a part-time basis, the management of wholeof the affairs of the credit information company shall be entrusted t
Where the Reserve, Bank is satisfied that it is necessary or expedient in the public interest or in the interest of specified users or in the interest of credit information companies or credit institutions or clients or borrowers so to do, it may determine the policy in relation to functioning of credit information companies or credit institutions or specified users generally or in particular and when the policy has been so determined all credit information companies, credit institutions and specified users, as the case may be, shall be bound to follow the policy as so determined.
(1) Where the Reserve Bank is satisfied that,--
(a) in the public interest; or
(b) in the interest of credit institutions; or
(c) in the interest of specified users; or
(d) in the interest of banking policy; or
(e) to prevent the affairs of any credit information company being conducted in a manner detrimental to the interests of its specified users or in a manner prejudicial to the interests of credit institutions or borrowers or clients; or
(f) to secure the proper management of credit information companies generally,
it is necessary to issue directions to credit information companies or credit institutions
(1)Notwithstanding anything to the contrary contained in section 235 of theCompanies Act, 1956, the Reserve Bank, at any time, may and on being directed soto do by the Central Government shall, cause an inspection to be made, by one ormore of its officers or through such other persons or agency as the Reserve Bankmay determine, of any credit information company or credit institution orspecified user and their books and accounts; and the Reserve Bank shall supplyto the credit information company or credit institution or specified user, asthe case may be, a copy of its report on such inspection.
(2)It shall be the duty of every director or other officer or employee of thecredit information company, credit institution and specified user to produce toany officer or person or agency, as the case may be, making an inspection undersub-section (1) all such books, accounts and other documen
(1) It shall be the duty of an auditor of a credit information company to inquire whether or not the credit information company has furnished to the Reserve Bank such statements, information or particulars relating to its business as are required to be furnished under this Act and the auditor shall, except where he is satisfied on such inquiry that the credit information company has furnished such a statement, information or particulars, make a report to the Reserve Bank in this regard.
(2) The Reserve Bank may, on being satisfied that it is necessary so to do, in the public interest or in the interest of credit system, issue directions in particular or in general with respect to audit of the credit information company and submission of the report to the Reserve Bank.
(3) Where the Reserve Bank is of the opinion that it is necessary so
(1) A credit information company may engage in any one or more of the following forms of business, namely:--
(a) to collect, process and collate information on trade, credit and financial standing of the borrowers of the credit institution which is a member of the credit information company;
(b) to provide credit information to its specified users or to the specified users of any other credit information company or to any other credit information company being its member;
(c) to provide credit scoring to its specified users or specified users of any other credit 'information company or to other credit information companies being its members;
(d) to undertake research project;
(e) to undertake any oth
(1) Every credit institution in existence on the commencement of this Act, before the expiry of three months from such commencement or within such extended period, as the Reserve Bank may allow on its application and subject to being satisfied about the reason for extension, shall become member of at least one credit information company.
(2) Every credit institution which comes into existence after the commencement of this Act, before the expiry of three months from its coming into existence, or within such extended period, as the Reserve Bank may allow on its application and subject to being satisfied about the reason for extension, shall become member of at least one credit information company.
(3) A credit information company may, at its option, become member of another credit information company.
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(1) Where a credit institution--
(a) abstains from becoming a member of at least one credit information company;
or
(b) at any time is not a member of any credit information company,
the Reserve Bank suo moto or on a complaint from a credit information company may, direct such credit institution to take necessary steps within such time, as it may specify to become a member of a credit information company.
(2) In case a credit institution fails to comply with the directions of the Reserve Bank under sub-section (1), to become member of at least one credit information company, the Reserve Bank may, without prejudice to the provisions of this Act, intimate such failure to any other authority for taking
(1) A credit information company or any person authorised in that behalf by the company may, by notice in writing, in such form, as may be specified by regulations made by the Reserve Bank or as near thereto, require its members being credit institution or credit information company, to furnish such credit information as it may deem necessary in accordance with the provisions of this Act.
(2) Every credit institution which is member of the credit information company and every credit information company which is a member of other credit information company shall, on receipt of notice under sub-section (1), provide credit information to the credit information company of which it is a member, within such period as may be specified in the notice.
(3) Every credit information company shall provide for such purpose, as may be specified by re
(1) Notwithstanding anything contained in any law for the time being in force, if any dispute arises amongst, credit information companies, credit institutions, borrowers and clients on matters relating to business of credit information and for which no remedy has been provided under this Act, such disputes shall be settled by conciliation or arbitration as provided in the Arbitration and Conciliation Act, 1996(26 of 1996), as if the parties to the dispute have consented in writing for determination of such dispute by conciliation or arbitration and provisions of that Act shall apply accordingly.
(2) Where a dispute has been referred to arbitration under sub-section (1), the same shall be settled or decided,--
(a) by the arbitrator to be appointed by the Reserve Bank;
(b) within three month
A credit information company or credit institution or specified user, as the case may be, in possession or control of credit information, shall take such steps (including security safeguards) as may be prescribed, to ensure that the data relating to the credit information maintained by them is accurate, complete, duly protected against any loss or unauthorised access or use or unauthorised disclosure thereof.
Every credit information company, credit institution and specified user, shall adopt the following privacy principles in relation to collection, processing, collating, recording, preservation, secrecy, sharing and usage of credit information, namely:--
(a) the principles--
(i) which may be followed by every credit institution for collection of information from its borrowers and clients and by every credit information company, for collection of information from its member credit institutions or credit information companies, for processing, recording, protecting the data relating to credit information furnished by, or obtained from, their member credit institutions or credit information companies, as the case may be, and sharing of such data with specified users;
(ii) which may be adopted by
(1) Any person, who applies for grant or sanction of credit facility, from any credit institution, may request to such institution to furnish him a copy of the credit information obtained by such institution from the credit information company.
(2) Every credit institution shall, on receipt of request under sub-section (1), furnish to the person referred to in that sub-section a copy of the credit information subject to payment of such charges, as may be specified by regulations, by the Reserve Bank in this regard.
(3) If a credit information company or specified user or credit institution in possession or control of the credit information, has not updated the information maintained by it, a borrower or client may request all or any of them to update the information; whether by making an appropriate correction, or addition or otherwise
(1) No person shall have access to credit information in the possession or control of a credit information company or a credit institution or a specified user unless the access is authorised by this Act or any other law for the time being in force or directed to do so by any court or tribunal and any such access to credit information without such authorisation or direction shall be considered as an unauthorised access to credit information.
(2) Any person who obtains unauthorised access to credit, information as referred to in sub-section (1) shall be punishable with fine which may extend to one lakh rupees in respect of each offence and if he continues to have such unauthorised access, with further fine which may extend to ten thousand rupees for every day on which the default continues and such unauthorised credit information shall not be taken into account for any purpose.
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(1) Whoever, in any return or other document or in any information required or furnished by, or under, or for the purposes of, any provision of this Act, wilfully makes a statement which is false in any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with imprisonment for a term which may extend to one year and shall also be liable to fine.
(2) Every credit information company or a credit institution or any specified user, wilfully, performing any act or engaging in any practice, in breach of any of the principles referred to in section 20, shall be punishable with fine not exceeding one crore rupees.
(3) Any credit information company or credit institution or specified user wilfully providing to any other credit information company or credit institution or specified user o
(1)No court shall take cognizance of any offence committed by a member of acredit information company and punishable under section 23 except upon acomplaint in writing made by an officer of the credit information companygenerally or specially authorised in writing in this behalf by the creditinformation company or if so directed by the Reserve Bank so to do and no courtother than that of a Metropolitan Magistrate or a Judicial Magistrate of thefirst class or any court superior thereto shall try any such offence.
Explanation.--Forthe purposes of this sub- section, "member of a credit informationcompany" shall mean a member referred to in section 15.
(2)No court shall take cognizance of any offence committed by a credit informationcompany punishable under section 23 except upon a complaint in writing made byan officer of the Reserve Bank g
(1) Notwithstanding anything contained in section 23, if a contravention or default of the nature referred to in sub-section (2) of section 22 or sub-section (2) or sub-section (3) or sub-section (4) of section 23, as the case may be, is made by a credit information company or a credit institution then, the Reserve Bank may impose on such credit information company or credit institution--
(i) where the contravention is of the nature referred to in sub-section (2) of section 22, a penalty not exceeding one lakh rupees;
(ii) where the contravention is of the nature referred to in sub-section (2) or sub-section (3) of section 23, a penalty not exceeding one crore rupees;
(iii) where the contravention is of the nature referred to in sub-section (4) of section 23, a penalty not exceeding one lak
A court imposing any fine under this Act may direct that the whole or any part thereof shall be applied in or towards payment of the costs of the proceedings, or for such purposes as may be directed by the court.
The Reserve Bank may, specify, by regulations the maximum amount of fees leviable under sub-section (3) of section 14 for providing information to the specified users and for admissions of credit institutions or credit information companies as a member of a credit information company.
No chairperson, director, member, auditor, adviser, officer or other employee or agent employed in the business of a credit information company or in the business of a specified user shall, except for the purposes of this Act or when required to do so by any other law in force or court or tribunal or authority, disclose any information to any person.
(1) Every credit information company shall observe, except as otherwise required by law, the practices and usages customary among credit information companies and it shall not divulge any information relating to, or to the affairs of, its members or specified users.
(2) Every chairperson, director, member, auditor, adviser, officer or other employee of a credit information company shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form, as may be prescribed in this regard.
Explanation.--For the purposes of this section and section 30, the terms "practices and usages customary" means such practices and usages which, are generally followed by credit information companies or may develop in due course in relation to their functions, in pursuance of the provisions of this Act, rules and regulations mad
(1) No suit or other legal proceedings or prosecution shall lie against the Reserve Bank or the Central Government or credit information company or credit institution, or their chairperson, director, member, auditor, adviser, officer or other employee, or agent or any person authorised by the Reserve Bank or the Central Government or credit information company or credit institution to discharge any function under this Act, for any loss or damage caused or as is likely to be caused by anything which is in good faith done or intended to be done, in pursuance of this Act or any other law for the time being in force.
(2) Nothing contained in sub-section (1) shall affect the right of any person to claim damages against a credit information company, a credit institution or their chairperson, director, member, auditor, adviser, officer or other employee or agents, as the case may be, in
Nocourt or authority shall have, or be entitled to exercise, any jurisdiction,powers or authority, except the Supreme Court and a High Court exercisingjurisdiction under articles 32, 226 and 227 of the Constitution, in relation tothe matters referred to in sections 4, 5, 6, 7 and 18.
(1) The Central Government may, on the recommendation of the Reserve Bank, by notification in the Official Gazette, direct that any or all of the provisions of this Act shall not apply to any credit information company or a credit institution, as the case may be, either generally or for such period and subject to such exceptions or modifications, as may be mentioned in that notification.
(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the n
The provisions of this Act shall be in addition to, and not, save as provided under this Act, in derogation of, the provisions of the Companies Act, 1956(1 of 1956) or any other law for the time being in force.
The enactments mentioned in the Schedule to this Act shall be amended in the manner specified therein.
(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:
Provided that no order shall be made under this section after the expiry of a period of two years from the commencement of this Act,
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.
(1) The Central Government may, after consultation with the Reserve Bank, by notification in the Official Gazette, make rules to carry out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing powers, such rules may provide for all or any of the following matters, namely:--
(a) the authority or tribunal which may be designated under sub-section (1) of section 7;
(b) the steps to be taken by every credit information company or credit institution and specified user for ensuring accuracy, completeness of data and protection of data from any loss or unauthorised access or use or disclosure under section 19;
(c) the form in which a declaration of fidelity and secrecy shall be made under sub-section (2
(1) The Reserve Bank may make regulations consistent with the provisions of this Act and the rules made thereunder to carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing powers, such regulations may provide for all or any of the following matters, namely:--
(a) the persons or institutions which may be specified as specified users under clause (1) of section 2;
(b) the form in which application may be made under sub-section (1) of section 4 and the manner of filing such application under that sub-section;
(c) any other form of business in which a credit information company may engage under clause (e) of sub-section (1) of section 14;
(d) the
THE SCHEDULE
(See section 34)
AMENDMENTS TO CERTAIN ENACTMENTS
PART I
THE RESERVE BANK OF INDIA ACT, 1934
(2 of 1934)
Section 45E, sub-section (2), after clause (c), insert--
"(d) the disclosures of any credit information under the Credit Information Companies (Regulation) Act, 2005.".
PART II
THE BANKING REGULATION ACT, 1949
(10 of 1949)
1. Section 19, after sub-section (3), insert--
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