ISLAMABAD: The Senate on Thursday passed the Credit Bureaus (Amendment) Bill, 2016 to ensure the existing legislation in conformity with the provision of Banking Companies Ordinance and international best practices.
Minister for Law and Justices Zahid Hamid on behalf of Minister for Finance Mohammad Ishaq Dar moved the Credit Bureaus (Amendment) Bill, 2016 in the House as reported by the Standing Committee.
The Statement and objects and reasons of the bill says that the purpose of Credit Bureaus (Amendment) Bill, 2016 to amendments in the Credit Bureaus Act, 2015, is to ensure that the existing legislation is in conformity with the provisions of the BCO, 1962, and international best practices.
The amendments in the Act are proposed for the following reasons: "a) The existing requirement of credit information report issued by a credit bureau to be verified by the State Bank of Pakistan (SBP), has been omitted, as the credit information report shall in most of the cases be accessed electronically by financial institutions that have data sharing arrangements with the credit bureau.
Technically, it would not be possible for SBP to verify reports being accessed by institutions across the country.
In addition to this, SBP collects data under Section (25A) of Banking Companies Ordinance (BCO), 1962 for Electronic Credit Information Bureau (ECIB) database which is confidential. If this data is used for verification of the credit reports, there would be indirect disclosure of confidential data, which is unlawful under the aforesaid Section of the BCO, 1962.
The member financial institutions, who report/upload data on ECIB, are responsible for accuracy of the data.
Same practice would be followed in case of private credit bureaus, who would be subject to internal, external and SBP Audit/Inspection, to ensure compliance of rules and regulations. This is also consistent with the international best practices."
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