What is CIB?
Basically, Credit Information Bureau (CIB) is a wing of the Bangladesh Bank by which maintains a centralized database of the credit history of individuals and companies.
In short, this database is used by banks and financial institutions to assess the credit worthiness of a borrower before approving a loan. It covers information about loan amount, repayment history, classification status and any default.
When a person or company classified in the CIB list?
A person or company gets classified (listed as a defaulter) in the CIB report when :
He or his company is a loan defaulter and the borrower fails to repay installments within 3 months (usually 90 days), the loan is classified as Substandard, Doubtful, or Bad.
Or
If any borrower issues a cheque against a loan and it bounces, this may also affect CIB status.
Or
Being a guarantor for a defaulted loan, that time the guarantor can also reflected or classified in CIB report.
Problems Faced if Classified in CIB
If an individual or company is classified as a defaulter in CIB, that time they may be faced following problem:
- Denied further credit, barred from new loans
- Freezing bank account
- Stopped transaction
- Denied to provide Credit Card
- Others
Remedy
° Pay off the outstanding dues or negotiate a rescheduled loan (as per Bank-Client discussion); or
° Filed a writ petition before the Hon’ble High Court Division for unclassified; or
° Filed a Civil First Appeal before the Hon’ble High Court Division and prayed for injunction of that CIB report.
Thank you
Abdullah Al Ashik | Advocate, Supreme Court of Bangladesh | Head of Chambers at Legal Prescription.