Ill-preparedness causes delay in passage of bill

ZAHEER ABBASI

ISLAMABAD: The failure of Finance Ministry and State Bank of Pakistan (SBP) to provide information about four private companies, limit of their paid-up capital and their capacity to handle data led to cause a delay in the passage of the Credit Bureau Bill 2015 by National Assembly's Standing Committee on Finance.

The committee meeting presided over by Omer Ayub Khan on Wednesday received a sock when the officials of Credit Information Bureau of SBP failed to provide the required information to the committee about four private companies, their paid-up capital and handling of data by them. All they said was that only one is operational. Danyal Aziz said, "you are going to regulate the market but you don't know anything about it".

Chairman of the Committee Omer Ayub said he was sorry to say that the committee wanted to facilitate SBP and Finance Ministry, but was shocked over their ill-preparedness. Nafeesa Shah said the committee cannot work on a government deadline while the ruling party's Qaiser Sheikh stated that there are so many flaws in the proposed law that necessitate another meeting.

Deputy Governor SBP Saeed Ahmed said the regulator has no interest in credit bureau information. He said that SBP is looking at worthiness of credit information so that a lender can make right decisions.

The officials of SBP informed the committee that the objective of the Credit Bureaus Act, 2015 is to bring the existing and new private sector credit bureaus under regulatory ambit, provide a platform for accuracy in risk prediction/credit scoring, which result in the healthy growth of credit, reduce risks of default and enable lending to new segments of borrowers as well as stabilize financial system and contribute to sustainable economic growth in the country.

The meeting was further informed that in some jurisdictions CBs are either in private or in public sector or combination of the both with a responsibility to collect, collate and disseminate credit data. They undertake credit scoring and sell such credit scoring to users; and depending on the country policies, CBs collect data regarding utility bills payments, bankruptcy, criminal record, etc. About the existing legal framework for operation of Credit Information Bureau, the meeting was informed that section 25A of Banking Companies Ordinance (BCO), 1962 empowers SBP to collect Credit Information and banks are required to submit credit data to SBP. The credit information is confidential in nature.