KARACHI: The State Bank of Pakistan (SBP) has doubled the period of retaining names of defaulters in the electronic Credit Information Bureau (eCIB) for two years even after clearance of all dues with relevant banks.

“From July 1, the State Bank has decided to include two years’ history of negative or overdue information for consumer and individual borrowers’ in the eCIB reports of SBP in line with international practices,” said a circular issued on Friday.

Currently, the eCIB report reflects negative or overdue information for consumer and individual borrowers’ for one year, it added.

The e-CIB of SBP collects and collates credit data on borrowers from its member Financial Institutions (FIs). The financial data is then aggregated in system and the resulting information, in the form of credit reports, is made available online to the member FIs for the purpose of credit assessment, credit scoring and credit risk management.

The major purpose of this database is to enable the FIs to know the credit history of their current and prospective customers thus enabling them to make informed and timely lending decisions.

“The decision was undertaken by the SBP to align its eCIB policies with international practices and to meet the Ease of Doing Business Survey (EODB) requirement of displaying at least two years’ history in the eCIB reports,” said the SBP.

The same will help in the enhancement of the credit assessment capability of the member FIs of their current and potential customers.

“It is very important that this change will be adopted on prospective basis and will be effective from July 1 onwards,” said SBP.

Accordingly, any default, delay in payment, etc prior to July 1 will continue to be reflected in the credit report of the customers only for one year. However, defaults, delayed payments, etc after July 1 will be shown on the credit reports for two years.

All the member FIs were advised to bring the contents of this policy change in the knowledge of their existing and potential customers.

Besides, the member FIs should also ensure upfront disclosure to their current and potential customers regarding the eCIB reporting requirement and its implication ie (the reflection of overdue, late payments, write off, waiver, etc.) in eCIB reports after settlement of their liabilities,” said the SBP.

Published in Dawn, April 10th, 2021