Section 29 of The Credit Information Companies (Regulation) Act, 2005.
- (1)Every credit information company shall observe, except as otherwise required by law, the practices and usages customary among credit information companies and it shall not divulge any information relating to, or to the affairs of, its members or specified users.
- (2)Every chairperson, director, member, auditor, adviser, officer or other employee of a credit information company shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form, as may be prescribed in this regard. Explanation.--For the purposes of this section and section 30, the terms "practices and usages customary" means such practices and usages which, are generally followed by credit information companies or may develop in due course in relation to their functions, in pursuance of the provisions of this Act, rules and regulations made and directions issued thereunder from time to time in pursuance thereof.
Summary
- Credit information companies must follow the customary practices and usages of their industry, unless a law requires otherwise.
- These companies are strictly forbidden from revealing secret information relating to the internal affairs of their members or specified users.
- Anyone taking a role in the company, such as a director, adviser, or employee, must officially declare their commitment to fidelity and secrecy.
- This declaration of fidelity and secrecy must be made in a prescribed form before the person even begins their duties.
Practical examples
FAQ
1. Do new employees have to promise to keep company secrets?
Yes, every employee must make a declaration of fidelity and secrecy before entering upon their duties.
2. What does the term customary practices actually mean in this law?
It refers to the practices and usages generally followed by credit information companies while carrying out their functions under the Act.
3. Can a credit information company share internal details about the banks that are its members?
No, it is generally forbidden from divulging information relating to the affairs of its members or specified users.
Test yourself
Q1.Under Section 29 of The Credit Information Companies (Regulation) Act, 2005., what must an adviser or employee do before beginning their duties at a credit information company?
Q2.The explanation for Section 29 and Section 30 of The Credit Information Companies (Regulation) Act, 2005. defines customary practices and usages. Which statement best matches this definition?
Q3.Under Section 29 of The Credit Information Companies (Regulation) Act, 2005., regarding the affairs of its members or specified users, a credit information company is legally obligated to do what?
Q4.Under Section 29 of The Credit Information Companies (Regulation) Act, 2005., what exception allows a credit information company to deviate from customary practices and usages?