NBFCs want Central Fraud Registry access: CFR, CRILC and RBI Act issue
Why in the news
NBFCs approached the Department of Financial Services (DFS) for entry to the RBI’s fraud database, arguing that they are blind to customers who have cheated banks.
Key facts
- Central Fraud Registry (CFR): a searchable, centralised bank-fraud database created in 2016.
- Threshold: cases of Rs 1 lakh and above.
- Access today: commercial banks alone.
- Bank frauds: Rs 21,515 crore in H1 of FY26, excluding frauds against NBFCs.
Why NBFCs want it
- Co-lending and cross-selling tie banks and NBFCs together, so a bank’s fraudster can still be onboarded by an NBFC.
- Most high-value borrowers hold accounts with both.
- NBFCs argue access should follow the nature of business (lending), not the legal form of the entity.
Hurdles
- Likely needs an amendment to the Reserve Bank of India Act, 1934.
- Privacy and misuse of ‘blacklists’ by non-bank entities are concerns.
Related developments
| Item | Detail |
|---|---|
| CRILC | Database of borrowers with exposure of Rs 5 crore and above; NBFCs must report quarterly but cannot view it |
| Digital Payments Intelligence Platform | Planned RBI system using AI and ML to curb payment frauds in real time |
| Draft directions (March 2026) | First definition of ‘mis-selling’ and a code of conduct for lenders’ sales staff |
Background
- Co-lending: bank and NBFC lend jointly; typically the NBFC originates and keeps 20%, the bank takes 80%.
- High base effect: after a very high year, a smaller rise can look like slowing growth even when amounts remain huge.
Exam angle
- CFR launched in 2016; Rs 1 lakh floor.
- CRILC floor: Rs 5 crore.
- Law to amend: RBI Act, 1934.