Since the beginning of 2023, the global financial system has been facing significant challenges with respect to high interest rates and inflation. Recent failures of Silicon Valley Bank, First Republic Bank and Signature Bank in the U.S. and loss of market confidence in Credit Suisse are some examples which show that the world is still adjusting to a tighter monetary policy.

The Reserve Bank of India (RBI) recently shortened the timelines within which credit information needs to be reported and updated by credit institutions and Credit Information Companies (CICs), respectively through a notification on 8 August 2024 (Notification). Noting the pace at which short term credit is growing and digital credit underwriting is being undertaken, the RBI highlighted that Credit Information Reports (CIRs) must reflect information that is as close as possible to the current date. Prior to the Notification, credit institutions were reporting credit information to CICs on a monthly basis, resulting in outdated data which was 30-60 days old. Credit institutions are now required to report credit information to CICs within seven calendar days following the 15th and last day of each month. Correspondingly, the CICs are required to update the information on a fortnightly basis. Moreover, CICs are to ingest received credit information within five calendar days from the date of its receipt instead of seven days. To ensure compliance, CICs will be required to submit a list of credit institutions which fail to comply with the Notification to the Department of Supervision, RBI on a biannual basis. Noting the changes required to existing operations, credit institutions and CICs have been given time till 1 January 2025 to implement the Notification. 

The Indian Finance Act, 2024 (Finance Act), passed pursuant to the Union Budget for the financial year 2024-25 (Budget 2024), brings a comprehensive set of reforms aimed at enhancing the country's financial sector. This article delves into the key proposals in the Finance Act and their implications on the debt capital markets in India.