Banks, NBFIs asked to give new directors’ CIB dataadmin2019
Banks and other NBFIs are asked to give updated CIB Data by the Central Bank regarding the borrowing entities’ Board of Directors by submitting relevant documents along with a forwarding letter.
Credit information bureau reports play a crucial role in Financial Institutions like banks in terms of giving loans. In the opinion of experts the CIB reports help to reduce the ex-ante cost and time of loan processing and ex-post rate of default which encourages banks to report credit information to the CIB database.
The Bangladesh bank on Sunday asked banks and non-banking Financial Institutions (NBFIs) to update CIB related data of the loan payer businesses, specially who have appointed new directors.
The central bank issued a circular in this regard and stated that the initiative has already been taken for the CIB reports. There are multiple procedural requirements for this formality.
No change in the borrowing company’s board of directors will now go unnoticed. Banks and NBFIs have to submit relevant documents along with a forwarding letter in order to correct information if there is any change in the board of directors of a borrowing company.
Not only this, the requesting banks or NBFIs must suggest the client to communicate the issue to other banks or NBFIs concerned before sending the request letter to the bureau. It was required so that they can also send the necessary documents to the bureau.
The requesting bank or NBFIs or the other bank or NBFIs also must submit either the verified copy of the minute’s pages which demonstrates their decision of the company regarding the relevant matters along with the signature of the chairman of the lending bank or NBFI on the first and last pages of the minutes. In some other cases, the approval of one step higher authority might be needed, if applicable.
The other requirements being that the requesting banks or NBFIs must encompass verified copies of documents including board memo, memorandum and articles of association or other documents as inculcated time to time by the CIB along with the forwarding letter.
The inbound directors of the borrowing Company have to be introduced through batch contribution to the CIB database before sending the request to the Bureau.
According to the BB circular, It is also obtained that if the personal guarantee of outgoing directors of the Borrowing company or the corporate guarantee of any other company or both of these remains to continue, then all of their names and details will be incorporated into the CIB database as batch contribution before sending the request to the Bureau.
Source: New Age BD