Credit Information Bureau (CIB) was set up in Bangladesh Bank (BB) in the year 1992 with the objective of minimizing the extent of default credit1. CIB of BB collects credit related information of borrowers from banks and financial institutions (FIs) and maintain the information in its database. The banks and FIs can access online database of CIB and collect credit information of its customer, when needed. They use the information to analyze repayment behavior of customer and avoid financing to any defaulter.
As per Bangladesh Bank Order, 1972 (Chapter IV), a clear legal and regulatory framework has been laid down which allows credit reporting and furnishing of credit reports to banks/FIs to function successfully.
As per section 27KaKa of Bank Company Act, 1991, every Bank Company/ Financial Institution is obliged to send to the Bangladesh Bank a list of debtors in default. Bangladesh Bank is obliged to send to all Bank Companies or Financial Institutions at their request information on the specific defaulter.
Banks, Financial Institutions and Investment Corporation of Bangladesh (ICB) are currently participants of the CIB of Bangladesh Bank. These participants supply credit related information to CIB database.
The main aim of the CIB is to provide service to the participants (banks/financial institutions) that need to assess credit risk when granting investment/ credit. To this end, these banks/ financial institutions have access to the total liabilities of each customer in the CIB database. In addition, the CIB of Bangladesh Bank provides following services:
(Reference: Policies and Guidelines for New CIB Online Solution, 2015 (Draft))
CIB report contains credit information of a borrower which is very important, confidential and sensitive. In article 46 of Bangladesh Bank order, 1972, there are directions and guidance for restricted use of credit information. In this article, restrictions are also imposed for not to disclose any credit information to the clients or others. Furthermore, in this article, it is also said that even Bangladesh Bank and other commercial banks/FIs are not entitled to disclose or transfer any complete credit information of borrowers.
In case the CIB report in respect of the borrower/customer is found adverse, instead of handing over the CIB report itself or an extract thereof, the banks/FIs may inform the client or prospective client in writing, in a confidential letter using the following language:
"According to credit information available with us, you are identified to be in default in your account(s) with one or more lending institution(s). You may approach your current lending institution(s) to regularise the position with them." (CIB Circular 1 dated 08 January 2005).
the bank/FIs are not required to report credit/investment information of the customer to CIB database of Bangladesh Bank.
(CIB Circular 2 dated 04 May 2011 and Para 5.07 of Agricultural & Rural Credit Policy & Program for the FY 2016-17)
Unscrupulous defaulters often obtain order of injunction from court restraining the Bangladesh Bank from publishing their name as a defaulter in the CIB report. By this way, they manage to hide their default status for time being.
As per section 42 (c)(ii), credit information includes the nature of security taken from any borrower for credit facilities granted to him. Based on this legal ground, Bangladesh Bank is going to prepare a database of mortgaged land properties.