India’s Finance Minister Nirmala Sitharaman on February 1, as part of her Budget 2023 speech, announced that the government will set up a national financial information registry to “serve as the central repository of financial and ancillary information.” “This will facilitate efficient flow of credit, promote financial inclusion, and foster financial stability,” Sitharaman said. “A new legislative framework will govern this credit public infrastructure, and it will be designed in consultation with the RBI,” she added. Why does this matter: One of the aims of such a registry is to make credit more easily available to those who are currently underserved by making it easier for lenders, including fintech companies, to assess creditworthiness. For lenders, it is expected to provide a better picture of the creditworthiness of a potential borrower. How will the registry work: Details on how the registry will work are scarce, but if it is to be like the public credit registry that has been in the news time and again, we do have some idea of how it might work. What is the public credit registry and how is it related: Back in 2018, a committee set up by the Reserve Bank of India (RBI) recommended setting up a public credit registry that functions as a 360-degree database of all types of credit information (loans, bonds, etc) of all types of borrowers (individuals, retail) that is accessible to all types of lenders (banks, NBFCs, fintechs, etc). It was pitched as a single point of information for…
