Central Repository of Information on Large Credits (CRILC) - Everything You Need To Know!

Central Repository of Information on Large Credits (CRILC) is established by the Reserve Bank of India to collect, store, and disseminate credit data to lenders. Therefore, banks will have to furnish credit information to CRILC on all their borrowers which have aggregate fund-based and non-fund based exposure of Rs.5 crores and above.

Central Repository of Information on Large Credits (CRILC) is one of the most important topics for the UPSC IAS exam. It covers a significant part of the Economy subject in the General Studies Paper-3 syllabus and current events of national importance in UPSC prelims. In this article we shall study tye framework and operational guidelines of CRILC.

Central Repository of Information on Large Credits (CRILC) – Everything You Need To Know:Download PDF here!

Central Repository of Information on Large Credits (CRILC)

Central Repository of Information on Large Credits (CRILC) is established by the Reserve Bank for scheduled commercial banks, all Indian financial institutions, and some non-banking financial companies with a number of goals, including, among others, strengthening off-site supervision and early identification of financial distress.

Central Repository of Information on Large Credits (CRILC): Report of Large Exposures

Primary (Urban) Co-operative Banks (UCBs) have been instructed to report credit information, including the designation of an account as a Special Mention Account (SMA), on all borrowers with aggregate exposures of at least Rs 5 crore to the Central Repository of Information on Large Credits (CRILC) maintained by the Reserve Bank. All fund-based and non-fund-based exposure, including investment exposure on the borrower, shall be included in the aggregate exposure.

Framework of CRILC: A Tool for Financial Institutions to Monitor NPAs

• The State Bank of Travancore (SBT) was fined INR 1 crore by the RBI in January 2016 for inaccurate reporting to the Central Repository of Information on Large Credits (CRILC).
• The RBI developed criteria for financial institutions to follow for identifying stressed borrowers (depending on their repayment status) and submitting information to the RBI for storage in the CRILC central database.
• According to the CRILC regulations, participating banks are expected to submit quarterly reports on all of the borrowers with a combined fund-based and non-fund exposure of INR 50 million or more.
• In order to determine a borrower’s likelihood of becoming delinquent, the guidelines also call for institutions to group borrowers into Special Mention Accounts (SMA) of varying levels.

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Operational Guidelines for Reporting the CRILC

The CRILC-UCBs return will first report once every three months. Within 30 days of the end of the quarter, the banks must use the RBI’s XBRL (eXtensible Business Reporting Language) reporting platform to submit information on their significant exposures. Banks may implement the necessary procedures to be prepared to submit the return on a more frequent basis.

When sending data on big credits to the Reserve Bank of India, banks are recommended to exercise the utmost caution about data integrity and accuracy.

Three Sections of CRILC–UCBs Return

CRILC – UCBs return comprises three sections

Section 1: Exposure to Large Borrowers

Section 2: Reporting of Technically / Prudentially Written-off Accounts

Section 3: Reporting of Balance in Current Account

The three sections are discussed in the table below.

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Special Mention Account (SMA)

Assets or accounts designated as Special Mention Accounts exhibit signs of poor asset quality within the first 90 days or before they are classified as Non Performing Assets (NPA).

• In order to identify accounts that may eventually become NPAs or stressed assets, the RBI developed the Special Mention Accounts (SMA) categorization in 2014.
• This classification is justified by the possibility that some accounts will shortly become NPAs. Here, early detection will help to better address the issue.
• Special Mention Accounts come in four varieties: SMA-NF, SMA 0, SMA 1, and SMA 2.
• The Special Mention Accounts are typically divided into categories based on their duration. For instance, the overdue time for SMA-1 is between 31 and 60 days. On the other hand, an asset will become SMA -2 if it is overdue by 61 to 90 days.
• However, some assets designated as “Special Mention” are chosen based on other variables that represent illness or anomalies in the account (SMA -NF).
• Non-financial indicators of the stress on an asset are taken into account in the case of SMA -NF.

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Fifth Bi-monthly Monetary Policy Statement, 2019-2020

The Fifth Bi-monthly Monetary Policy Statement, 2019-20 was introduced on December 05, 2019. It was also decided to include primary (urban) cooperative banks (UCBs) with assets of 500 crores and above under the CRILC reporting structure in order to create a similar database of significant credits provided by UCBs.

Conclusion

The Central Repository of Information on Large Credits (CRILC), a crucial to
ol of the RBI, requires reform and regulation of the terms. The NPA problem might have also been resolved if the CRILC is applied strictly. RBI needs to control its practices while keeping all banks in mind.

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