Economics • Banking & FinanceEasy
What is the primary function of the 'Credit Information Companies (CICs)' operating in India?
A. To provide direct short-term liquidity loans to commercial banks during temporary cash crunches.
B. To collect, maintain, and share credit history and records of individuals and corporate borrowers with lenders.✓ Correct Answer
C. To regulate foreign institutional investments and foreign portfolio investments in the domestic equity market.
D. To act as an apex judicial forum for resolving banking fraud cases involving public sector undertakings.
💡 Solution & Explanation
Credit Information Companies collect, maintain, and share credit history records and scores of retail and corporate borrowers with registered financial lending institutions. They do not provide direct central bank liquidity, regulate foreign portfolio investments, or act as banking fraud tribunals. Their data helps lenders assess default risks before sanctioning loans.
More Economics Banking & Finance questions
- Analyze the structural classification of capital under Basel III norms. Which of the following is categorized…
- What is the primary operational purpose of Open Market Operations conducted by the Reserve Bank of India?
- Under the Prompt Corrective Action (PCA) framework administered by the Reserve Bank of India, which financial…
- In the context of India's external debt management, what distinguishes 'External Commercial Borrowings' from…
- Under which statutory provision are scheduled commercial banks in India required to maintain the Statutory…