State Bank of Pakistan (SBP) has issued a license to Data Check Private Limited for operating a private credit bureau in Pakistan. It will provide value-added services to the financial sector and access to their credit information to the general public.
This will be the first private bureau in Pakistan, the central bank announced through its official notification.
SBP operates Credit Information Bureau (CIB) mainly to provide credit history and related details of customers and organizations to the banks. Due to increasing customer base and services offered by banks, it issued Credit Bureaus Regulations and licensing criteria for setting up credit bureaus in the private sector in April 2016.
There are three companies in the banking industry which are private credit bureaus ‑ Datacheck, News-VIS CIB, and ICIL/PakBizInfo.
The company awarded a license officially is M/s Data Check Private Limited, which filed a petition against the central bank for setting a high price of paid-up capital. Consequently, the central bank revised a paid-up capital limit of Rs. 225 million from Rs. 250 million on the directives of Sindh High Court in May 2018.
The very objective of establishment of credit bureaus in private sector is to enhance the scope of credit information, provision of value-added services to the financial sector, bring in efficiency and provide general public access to their credit information.
The information provided by the credit bureau is an important factor to evaluate creditworthiness and make business decisions. It would, therefore, be of prime importance that the service is available without any disruption and the information provided is up to date and accurate.
Credit bureaus, being the custodian of financial information of individuals and corporations, have the responsibility to ensure privacy and confidentiality of the information. Any breach of confidentiality and security of data can have serious repercussions for the data reporting entities and the credit bureau.
As it’s an important pillar of the financial services infrastructure of the country, financial viability, future growth, and efficient service standards etc of the prospective credit bureau will also be evaluated, the central bank regulations stated.