Don’t spoil a good idea with monopoly

  Don’t spoil a good idea with monopoly

The RBI’s High-Level Task Force on creating a Public Credit Registry (PCR) for India has recommended an in-house repository(भंडार गृह/कोष) having extensive(विस्तृत/व्यापक) information on all borrowers(उधारकर्ताओं). The intent(आशय/प्रयोजन), to curb bad loans and make the credit market more efficient(कुशल/योग्य), is laudable (प्रशंसनीय/सराहने योग्य) comprehensive database will help lenders(कर्ज देनेवाला) get a true picture of a borrowers’ credit history and enable them to assess risks better. To have data—such as external commercial borrowings, market borrowings and all contingent(आकस्मिक/श्रेणी) liabilities—makes sense for a holistic picture. However, why make the PCR the “single point of mandatory reporting for all material events for each loan, serving as a registry of all credit contracts verified by reporting institutions” for all lending in India? Indeed, all information should come to it, but not just to it. Competition is a good idea.

Today, multiple repositories, including Credit Information Companies (CIC), collect and store granular credit information. The panel says that credit institutions will not be obliged to provide information to CICs. That is not a good idea. The notion that a single window for reporting credit information will lower the compliance burden (बोझ) is flawed in a technology-driven era. PCR should co-exist with other repositories that include information utilities that authenticate(प्रमाणित) and store sensitive information on debt and default to speed up the resolution(संकल्प/प्रस्ताव) process. More competition will drive innovation(नवीनता)/नवीनीकरण) and improve the quality of data on borrowers.

Borrowers must be allowed to access their own credit history. Multiple identifiers are unnecessary. Aadhaar is a unique ID for individuals(व्यक्तियों). Other legal entities must be mandated (अनिवार्य/अधिकार-पत्र दिया जाया)to have unique identifiers, to trace real beneficial(फायदेमंद) ownership. Data privacy and security must receive due attention.

 

 

Important Vocabulary

1.Extensive(विस्तृत/व्यापक)
Synonyms:broad, comprehensive, considerable, expanded, huge
Antonyms: broad, comprehensive, considerable, expanded, huge

2.Laudable (प्रशंसनीय/सराहने योग्य
Synonyms: commendable, creditable, praiseworthy, deserving, estimable
Antonyms: disrespected, unworthy, bad, blameable

3.Contingent(आकस्मिक/श्रेणी)
Synonyms: unforeseen, accidental, chance, dependent, incidental
Antonyms: designed, essential, planned, certain, definite

4.Resolution(संकल्प/प्रस्ताव)
Synonyms: decision, settlement, verdict, aim, boldness
Antonyms: apathy, cowardice, fear, flexibility

5.innovation(नवीनता)/नवीनीकरण
Synonyms: modernization, addition, alteration, contraption, departure
Antonyms: stagnation, custom, habit, old, old hat

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