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State Bank of Pakistan

SBP issues instructions for reporting borrowers’ information

KARACHI: The State Bank of Pakistan on Thursday issued instructions for banks to ensure quality reporting regarding borrowers’ information.

The SBP said the Credit Information Bureau (eCIB) of the central bank collects borrowers’ credit information and makes it available to financial institutions (FIs) for making informed credit decisions.

The information in eCIB is also used by SBP for supervisory purposes.

Accordingly, quality data reporting in eCIB remains a top priority for SBP.

In this regard, the SBP, carried out an in-depth assessment of the mechanisms put in place for eCIB data feeding, compilation, validation and reporting by the member FIs.

In light of the findings of this exercise, instructions have been developed to ensure quality data reporting in eCIB.
All the member FIs are advised to ensure strict compliance with the enclosed “Instructions for Quality Data Reporting in eCIB” in letter and spirit to avoid any untoward business and legal implication of the incorrect data reporting in eCIB.

Failure to comply with these instructions will attract strict penal actions against the concerned FIs under the relevant legal and regulatory provisions.

The SBP said that despite the issuance of repeated instructions from time to time regarding the quality data reporting, still some inconsistencies in the eCIB reported data were witnessed.

Such inaccuracies in data can result in adverse selection by the FIs such as the inadvertent refusal of credit application of a good borrower or extension of credit to a bad borrower. Besides, it may also expose the member FIs to legal and regulatory implications.

Therefore, to ensure high-quality credit reporting of credit data, all the member FIs are advised to ensure that the financial and non-financial data should be:

i. Accurate (i.e. correct, up-to-date, having strong validation process for identification of data subjects and other information as per prescribed data formats).

ii. Sufficient, relevant, and collected on a systematic basis from all reliable, appropriate, and available sources.

iii. Timely (updated on a continuous basis and reported to eCIB).

iv. Retained safely for at least five years or otherwise specified in the relevant law/regulations issued by SBP from time to time.