CRIB to secure new state-of-the-art system with credit rating
The Credit Information Bureau of Sri Lanka (CRIB), the first such institution in the South Asian region, is exploring the possibility of introducing a credit rating classification in addition to present credit score report under its financial information services.
The CRIB is developing a new state-of-the-art credit bureau system replacing the present computer system with the assistance of one of the best credit bureau services, Finance Ministry sources divulged.
Credit member institutions, banks, finance companies and leasing companies are used to this present system for a long period and all their data will have to be shifted to the new system without any inaccuracies, a senior ministry official said.
The shifting of the more than 15 year-old system to a new digitised system is a time consuming process as all such data will have to be shifted to the new system without any issues and with minimal impact to users, he pointed out.
The bureau now implements a points system for borrowers, instead of branding customers as bad borrowers.
The aim is to classify borrowers who used to service their debts without defaulting and allow them to get further banking facilities by considering their track record, the official said.
According to available data, the CRIB covers 46.5 per cent of the country’s adult population, which includes 6.3 million people and over 212,000 firms.
Credit Score is a three-digit number which ranges from 250 to 900. The higher credit score leads to lower credit risk to lenders and similarly a lower credit score leads to higher credit risk.
Similar to self-inquiry report (i-report), credit scores also change over time due to updates and changes in credit data.
The CRIB has been directed to launch the new credit rating report by the Parliamentary Sectoral Oversight Committee on alleviating the impact of the economic crisis recently.
The chairman of the committee Gamini Waleboda MP has recommended to make provisions for providing a rating report in addition to providing information for banks and financial institutions and individuals while approving loans.
The officials of the CRIB told the committee that their institution only releases information about the financial affairs of individuals and institutions.
Mr. Waleboda pointed out that immediate measures should be taken to prevent banks from approving loans to institutions and individuals who are unable to settle their debts or become bankrupt.
He noted that it is absolutely impossible to allow public money to be wasted by giving loans without tracking their financial record and the ability to repay debt.
The officials informed the committee that attention is being paid to changing the name CRIB in the future after installing its new digital system to provide details of financial information including over indebtedness, utilisation of available credit and dishonored cheques etc.
These financial data will be released on request for permissible purposes to the lending institutions who are shareholders of the bureau, the Central Bank, any government agency or institution declared by the minister of finance to be entitled to receive such information, he revealed.
The present computer system has the capacity of processing 10 million records in a month but the new state of the art system could process a similar number of data in a day, he added.
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