a vast body of academic literature advocates transparency in credit markets, arguing that it improves the efficiency of the market and helps creditors as well as borrowers. one of the reasons the credit information is termed as a ‘ public good ’ is its utility to the credit market at large and to the society in general. in the absence of a central database of credit information, the creditors are restricted to the information they have about their clients based only on their limited transactions or interactions with the clients, and this could lead to suboptimal outcomes. 13. a central repository, which, for instance, captures and certifies the details of collaterals, can enable the writing of contracts that prevent over - pledging of collateral by a borrower. in absence 2 / 6 bis central bankers'speeches of the repository, the lender may not trust its first right on the collateral and either charge a high cost on the loan or ask for more collateral than necessary to prevent being diluted by other lenders. this leads to, what in economics is termed as, pecuniary externality – in this case, a spillover of one loan contract onto outcomes and terms of other loan contracts. furthermore, absent a public credit registry, the ‘ good ’ borrowers are disadvantaged in not being able to distinguish themselves from the rest in opaque credit markets ; they could potentially be subjected to a rent being extracted from their existing lenders who enjoy an information monopoly over them. the lenders may also end up picking up fresh clients who have a history of delinquency that is unknown to all lenders and this way face greater overall credit risk. current credit information systems in india 14. let us now have a look at the current credit information systems in our country. the private credit bureaus ( cbs ) operating in india are regulated by rbi under the credit information companies ( regulation ) act, 2005 and include credit information bureau ( india ) limited ( cibil ), equifax, experian, and crif highmark. each one of these focuses on data analytics to provide credit scores, and allied reports and services. these analytics are useful for the member banks for issuing credit cards as well as for taking decisions ( primarily on retail loans ) as of now. 15. the reserve bank has set up the central repository of information on large credits ( crilc ) in 2014 – 15. it is now one of the most important databases for offsite supervision. here the scheduled commercial banks (

weakness of some of the entities over the years resulting in erosion of public confidence and causing concern to the regulators as also to the sector at large. various committees and task force set up over the years, notably the committee headed by shri k. madhava rao on ucbs and shri jagdish capoor on the rural cooperatives task force on urban cooperative banks have also recommended for enabling all the stakeholders to work together for a strong vibrant and stable system. it is in this critical context that, the reserve bank committed itself to strengthening the sector and to protect the depositors ’ interests. the reserve bank ’ s vision document for ucbs brought out in march 2005 with the objective of maintaining the viability and competitiveness of the cooperative sector. the document also envisaged : • putting in place a mechanism to address the problems of dual control, • putting in place a consultative arrangement for identifying weak but potentially viable entities and nurturing them back to health, if need be through a process of consolidation, and • to identify unviable entities in the sector and provide them an exit path. to address these issues, rbi felt the need to have more effective interaction with the state government to address some of the systemic issues hindering the growth and functioning of the cooperative banks. in view of this, rbi has signed memorandum of understanding ( mou ) with 26 states so far, which provides the basis for constitution of task force for urban cooperative banks ( tafcub ), the forum for consultative decision making process. the various tafcub meetings across the states have generated the desired effects and have helped in strengthening of the ucb sector as a whole. rbi ’ s role in empowering ucbs in order to empower the cooperative banks in their commercial / managerial functioning, rbi in its mous with the state governments has committed to facilitate the development of human resources and skills and to provide assistance in it initiatives undertaken by the ucbs. the ucbs here have to take a lead and play a more pro - active role in order to utilise the services and assistance provided by the reserve bank to make themselves more competitive by bringing efficiency in their functioning. this has to be achieved through cultivating capital adequacy and npa provisioning standards ; better corporate governance ; introducing professional management and following best practices in banking operations. role of technology the use of technology in expanding the banking outreach has been an area of focus for the reserve bank. technological innovation has not only enabled a broader reach