Financial Times

Misconceptions about CRIB

By Natasha Gunaratne

The Credit Information Bureau (CRIB) usually conjures up notions of loan defaulters, debtors and swindlers but these are all misconceptions according to CRIB Director/General Manager Gamini Karunaratne.

In an exclusive interview with the Sunday Times FT, Mr. Karunaratne said CRIB stores the credit information, good and bad, from all authorized lending institutions such as banks, specialized and commercial banks, leasing houses and finance companies toalling 96, which are compelled by law to report credit information.

“Good and bad borrowers are in the system,” Mr. Karunaratne explained. An individual or a corporation that has taken out a loan will be reported to CRIB and a history of their loan repayment can be viewed by any other authorized lending institutions if they are seeking another loan. “There are millions of customers who have great credit history,” he said. CRIB will also be embarking on extensive awareness programmes to clarify the misconceptions that exist among the public.

Mr. Karunaratne described CRIB as an indispensable tool for financial institutions as they are able to view an individual’s credit history, income details and repayment capability. In fact, requests for credit reports from these institutions increased noticeably after the end of the war in May 2009, now averaging about 4,500 per day from 2,800 previously. Mr. Karunaratne said this increase may be due to an increase in credit or more likely, an increase in non-performing assets. CRIB issued a total of 818,000 credit reports in 2008.


CRIB is a statutory body that was established under an Act of Parliament in 1990 and credit reports can only be obtained by the 96 stakeholders. However, they must provide their loan portfolio and a signed loan application to CRIB in order to request credit reports. By December 1, 2009, individuals can request a copy of their own credit report to verify the information.

“This is the advantage of issuing credit reports to people,” Mr. Karunaratne said. Banks must update the information monthly and in the process of entering data on thousands of individuals and corporates, a few cases are misreported. In those instances, CRIB will take the matter up with the bank concerned for corrective action. In order to avoid errors, he said the CRIB system must be made compatible with the systems used by banks.

Misuse of credit reports can lead to that particular financial institution being barred from accessing CRIB for a period of time until an inquiry is conducted and the matter is resolved. Individuals who misuse credit information may face up to an Rs.1 million fine and up to 5 years imprisonment.


From November 2009, individuals who have had more than 3 returned cheques due to insufficient funds will be reported to CRIB. Mr. Karunaratne said the financial market has been plagued with cheque return problems but with this new provision, banks can rquest credit reports when individuals open current accounts to see if there is a history of writing bad cheques which is a criminal offence.

CRIB is also looking to expand its services and diversify its user groups to include utilities payments such as telecom, gas and electricity in order to track credit history. However in the telecom industry for example, the laws prevent companies from providing information on clients. Mr. Karunaratne said those have to be changed.

The Secured Transaction Act No. 49 of 2009 was passed on September 25 to protect institutions that lend against movable items such as vehicles and machinery. Mr. Karunaratne explained that currently, people are taking loans from several institutions against the same movable item so this Act, upon implementation, will provide security for creditors.

CRIB is exploring the option of putting credit reports online but there are several issues such security concerns and the potential misuse of information that must be sorted. CRIB is also looking to start credit scoring by 2011.

Top to the page  |  E-mail  |  views[1]
Other Financial Times Articles
Crisis over Russia’s import duty on tea
Misconceptions about CRIB
PBJ case: Genuine error over judgment copy stir
Sri Lanka succeeds in US$500 mln bond offer
Ten bidders for British High Commission property
Millicom's Tigo to be sold to Etisalat
Landmark Asiri Central Hospital closes
Important to maintain good relations with the West
Investment by the private sector
IMF: Fresh hurdle over budget issue
American investors see opportunities in Sri Lanka
SEC issues severe reprimand on U.H Dharmadasa
Lankan born Raj Rajaratnam arrested for insider trading
Central Bank – beware of gold sale scam
SC orders to seize Sicille's bank account
London Stock Exchange Group CEO visiting Colombo
Top HSBC Asia Pacific's official visiting here
Want to join the Sunday Times Business Club?
Judgments of 7- judge bench in PBJ case
FCCISL, selected regional chambers in IT training scheme
Ceyline maritime campus in Jaffna
Seminar on 'Social and Business Etiquette'
US$ 150 million committed for Northern reconstruction to date
Hotel sector to outperform in post-war Sri Lanka
Fair trade concept growing across the world
Fitch rates Sri Lanka's upcoming Benchmark Bond Issue 'B+'
Malaysian investor to provide IT enabled telecom solutions
Spence Hotels' gains from expansionary drive - report
Why Social Marketing?
Government urges US investment
Hedging case postponed
SAARC Governors meet
3,400 items can enter US duty-free under US GSP, but Sri Lankan exports paying duty
CSE will minimize downtime if web crashes again
New ILO study on the effects of the economic crisis
“Unlawful privatizations in Lanka- Role of the Auditors” -- Right of Reply
Access Engineering gets ISO 14001:2004 Certification
Ceylinco company changes name
Hayleys Agro partners Eastern farmers in gherkin and paddy project
New company to cater to Micro-Finance
Hayleys Consumer unveils new products
Golden Key: Now clashes between depositors
'Deposit shield' for car engines
Plantation companies agree to fix wage problems
The Bank with a heart - my foot !!! -- Letter
Depositors reject Ceylinco Shriram repayment plan
World Bank-IFC ranks BOI as the best in South Asia
Corruption in govt. hospitals hurting the vulnerable
Garment exports show signs of recovery in August
CCI urges banks to reschedule loans of Condominium contractors
Lankem Paints at 'EuroCoat 2009 Barcelona’
Depositors reject Ceylinco Shriram repayment plan
Former SriLankan CEO Hill now heads Oman Air
Rate of inflation to increase in coming months, but at 'subdued levels'
SLT cash generation strong despite pressure on profits-Fitch


Reproduction of articles permitted when used without any alterations to contents and a link to the source page.
© Copyright 2009 | Wijeya Newspapers Ltd.Colombo. Sri Lanka. All Rights Reserved.| Site best viewed in IE ver 6.0 @ 1024 x 768 resolution