Economics • Banking & FinanceEasy
What is the primary function of the 'Credit Information Companies (CICs)' operating within the framework of the Indian financial system?
A. To fix the benchmark lending rates for commercial banks.
B. To collect, maintain, and share credit history data of borrowers with financial institutions.✓ Correct Answer
C. To act as the ultimate lender of last resort for non-banking financial entities.
D. To audit the asset quality of foreign banks operating in India.
💡 Solution & Explanation
Credit Information Companies are regulated entities under the Credit Information Companies Regulation Act of 2005, tasked with aggregating and sharing consumer credit histories among financial institutions to evaluate credit risk. They do not set lending rates or audit foreign assets.
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