The Credit Information Bureau (CIB) is a documented standard of Bangladesh Bank used to evaluate the financial behavior of borrowers. In Bangladesh’s financial sector, ensuring security and assessing borrowers’ credibility are among the key functions of the CIB. Operated under the direct supervision of Bangladesh Bank, this specialized department is responsible for collecting, storing, and analyzing information related to loans, leases, and credit cards from all scheduled banks and non-bank financial institutions across the country.
In simple terms, a CIB report is essentially a comprehensive evaluation of an individual’s or an organization’s financial activities and credit behavior. It determines whether the concerned person or entity has previously taken loans, investments, or credit cards from any bank or financial institution, and if so, whether repayments were made on time or if there were any defaults or irregularities. The report also reflects whether the person or institution currently enjoys any loan, credit card, or investment facility, and whether the repayment schedules are being followed properly.
For banks and financial institutions, verifying the CIB report before approving any new loan, credit card, or investment is mandatory and a regulatory requirement. As a result, the CIB report plays a crucial role in assessing credit risk and making informed financial decisions.
In Bangladesh, most customers first hear about the CIB when they apply for a loan or credit card for the very first time. Others become aware of it only after they default on a loan or card, and their subsequent application for a new facility gets rejected. At that point, they realize that their previous financial behavior, such as missing installments or failing to pay credit card bills on time, has been recorded in a centralized report. This report is the CIB report, prepared and maintained by the Credit Information Bureau under Bangladesh Bank.
This discussion aims to provide an introductory understanding of CIB.
History of CIB
The Credit Information Bureau was established in 1992 under the Financial Sector Reform Project (FSRP), funded by the World Bank. Its core objectives were to minimize lending risks in the banking sector, control defaulted loans, and ensure transparency and accountability in credit approval processes.
What is a CIB Report and why is it Important?
A CIB report is a comprehensive record of an individual’s or institution’s past and present loan history. It includes details such as outstanding loan amounts, repayment regularity, rescheduled accounts, or written-off loans, thereby providing a clear picture of the borrower’s financial discipline.
It is a mandatory verification tool for approving any new loan application. Similarly, for both new applicants and existing credit cardholders, a CIB report carries significant importance. If a customer fails to pay credit card bills on time, incurs overdue balances, or demonstrates other financial irregularities, these behaviors are recorded in the CIB report just like loan defaults.
When an individual later applies for a loan, investment, or another credit card, banks and financial institutions evaluate eligibility based on their CIB report. This means that making regular and timely credit card payments is essential to maintain a positive CIB record and to secure access to future financial services.
For example, if you apply for a credit card from a bank, the first thing the bank will do is check your CIB report. If it shows that you have previously defaulted on any loan installment or failed to pay your credit card bill on time, this negative entry may prevent the approval of your new application.
What information is Reported to CIB?
▣ All types of loans, leases, and credit card information must be updated and submitted to CIB every month.
▣ Rescheduled loans or written-off accounts are also reported.
▣ Late payments on credit card bills are recorded as negative entries in the CIB report.
Impact of a CIB Report
▣ The CIB report impacts not only loan approvals but also an individual’s or organization’s overall financial credibility. It serves as a kind of financial résumé, based on which banks assess your creditworthiness.
▣ Even if a borrower defaults and the account is later written off, the negative history remains in the CIB system, potentially creating obstacles for future loan approvals.
Importance of CIB in the Capital Market
The significance of CIB reports extends beyond the banking sector to the capital market. In cases of Initial Public Offerings (IPO) or Rights Share Issues, the Securities and Exchange Commission (BSEC) checks the CIB records of company directors. If any director is a loan defaulter, the application for IPO or Rights Shares may be rejected by BSEC. For this purpose, BSEC collects the relevant CIB reports directly from Bangladesh Bank.
Personal Awareness and CIB
Many customers unknowingly create negative entries in their CIB report, for example by delaying credit card bill payments for just a few days or missing loan installments. Such behavior can later become a barrier to obtaining new loans or credit cards. Therefore, it is critically important to meet all repayment obligations on time.
So, The Credit Information Bureau (CIB) is an essential and central mechanism for ensuring financial discipline in Bangladesh. It is a comprehensive database where defaults in any bank or financial institution are recorded as negative entries. This means that if you default on a loan or credit card with one institution, it can affect your ability to access financial services from others in the future.
Since the report is maintained directly under Bangladesh Bank, it serves as a reflection of your financial behavior and responsibility. A CIB report essentially acts as a measure of your financial credibility, influencing your access to future opportunities.
Therefore, it should never be overlooked. Building and maintaining a clean and positive CIB profile, through timely repayment of loans and credit card bills, is the responsibility and necessity of every borrower.