July 2, 2006 (LBO) – A senior central banker has strongly criticized the practice of banks of not reporting influential defaulting clients to the Credit Information Bureau (CRIB). Some banks have also started giving multiple identity card numbers of certain clients to the CRIB, in order to avoid being black listed by the credit information bureau officials said.
The CRIB was set up after a series of finance companies collapsed in the mid 1980s.
It issued credit reports based on the information supplied by lending institutions.
A senior Central Banker says some financial institutions cherry pick defaulters that are reported to the CRIB.
“It is well known that banks and credit institutions do not report the full list of borrowers to the CRIB. It is also no secret that these institutions cherry pick the borrowers according to the foremost preference,” observes Ranee Jayamaha, Central Bank’s Deputy Governor.
“The affluent borrowers, multinational companies, large corporates, highly connected borrowers and the banks’ preferred customers do not get reported to the CRIB even if they default altogether.
The credit profiles of the affluent customers will