Bill to Establish National Financial Information Registry Nears Finalisation: DEA Secretary

Economic Affairs Secretary Ajay Seth announced on Tuesday that a Bill to establish a National Financial Information Registry (NFIR) is nearing completion. This registry aims to bridge a significant gap in the credit rating mechanism by providing a central repository for financial and ancillary information.

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The NFIR will facilitate the efficient flow of credit, promote financial inclusion, and foster financial stability. Seth mentioned this during his speech at the CII Financing 3.0 Summit. He highlighted that more work is needed in credit ratings and developing the secondary market.

Focus on Credit Access and Market Development

Seth outlined the agenda for the next 5-7 years, emphasising the need to expand access to credit, insurance, pension, and capital market products for a broader audience. He urged the industry to enhance service efficiency, which would reduce intermediation costs.

He also stressed the importance of improving service quality. Seth noted that about Rs 9 lakh crore or just 3 per cent of GDP is raised through bonds, with 98 per cent of this through private placement and 80 per cent of issuances being AAA-rated.

Pradhan Mantri Jan Dhan Yojana's Impact

Seth discussed the success of the Pradhan Mantri Jan Dhan Yojana (PMJDY), which has completed a decade. He stated that 53 crore people have been brought into the formal banking system through Jan Dhan Accounts, accumulating a deposit balance of Rs 2.3 lakh crore.

He added that today, 70 per cent of the population has a bank account due to PMJDY. This initiative has significantly increased financial inclusion across India.

The Bill for NFIR is almost ready after extensive consultations. "We expect that early set up of registry, post-enactment it will help in bridging a critical gap in credit rating mechanism," Seth said.

In conclusion, Seth underlined the necessity of deepening and broadening the bond market to support economic growth. The establishment of NFIR is expected to play a crucial role in achieving these financial goals.