RBI Panel To Work On A Better Mechanism To Track Credit Quality 

The Reserve Bank of India will constitute a task force to suggest ways to track the quality of credit in a better manner as Indian lenders battle mounting bad loans.

The task force, comprising experts and major stakeholders, will help in assessing the gaps that could be filled through a public credit registry, the central bank announced as part of its developmental and regulatory policies. It will study international practices and suggest a road map, including the priority areas, for developing a transparent, comprehensive and near-real-time registry, the RBI said.

The regulator has already created a Central Repository of Information on Large Credits to track large exposures. It also has a comprehensive Basic Statistical Return database with granular account-level information on credit.

The RBI's move comes after the central bank, under fresh powers granted through an amendment in law, identified 12 large stressed companies for insolvency action. They account for a quarter of Rs 7.7 lakh crore bad loans on the books on Indian lenders.

The banking regulator pointed out that credit information companies have been offering limited reports to lenders by segregating the information into separate modules. To address this, it directed such companies to offer complete reports to all lenders to reduce information asymmetry between borrowers and lenders.

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In other regulatory policies, the RBI said it will ease liquidity coverage ratio guidelines by allowing banks incorporated in India to classify any reserves held by banks incorporated in India with a foreign central bank, in excess of the reserve requirement in the host country, as a high quality liquid assets.

The RBI also said that it will review the way it conducts surveys prior to the monetary policy announcement as per the recommendations of a technical advisory committee. The regulator conducts two such surveys – inflation expectation survey of households and consumer confidence survey.

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