Major banks in Beijing have set a timetable to establish an individual credit record system next year, it has been reported.

Beijing Youth Daily quoted a leading official with the Beijing Banks Association on Friday as saying that member banks plan to collect credit records on individuals applying for bank loans to buy cars, starting from Oct. 10.

The association represents 21 Chinese banks and 18 overseas-funded banks operating in Beijing.

By that time, all member banks should provide all information available on individuals with poor records on car loans for the system free of charge, and the credit information will be reported once a month afterwards, said the official.

The banks are expected to have access to a planned credit information system on individuals with poor credit records before next June.

The records would involve bank cards, housing loans, and individual loans, the official noted.

By the end of next year, an on-line credit record system will be open to all members of the association for real-time updates and use, said the official.

The official said credit rating information will be used by local banks on loan decisions, but the banks will mainly rely on their own risk appraisal system.

The local telecommunications companies, in cooperation with banks, began to collect information on those who deliberately delayed payments of telecommunications charges.

The association has carried out detailed discussion with legal experts on ways for its members to share the credit information they collect while protecting the privacy rights of their clients.

China has not yet enacted a law regarding collection and use of credit information on individuals, according to the paper.

Chen Jing, director of the Sciences and Technology Department of the People's Bank of China, the central bank, said a draft law on individual credit information system has been worked out and submitted for a relevant department for approval.

The central bank official noted that the draft is unlikely to be passed this year by the top Chinese legislative body, and will hopefully be adopted next year.

Shanghai, the only city on the Chinese mainland authorized to collect personal credit information, leads other provinces or municipalities around the country in introducing a personal credit system.

The personal credit rating system in Shanghai, China's biggest banking and economic center, is beginning to take shape as one in four residents have their personal credit files recorded by an authorized credit information company.

A spokesperson for Shanghai Credit Information Service Co. authorized to gather the information, said that the company had collected credit records on 3.25 million residents in Shanghai, and produced 840,000 credit files over the past three years.

Jiang Lan, a spokesperson for Shanghai Municipal government, acknowledged that the personal credit information system was having a positive impact on boosting credit consumption.

Outstanding personal credit loans accounted for 12 percent of the total in the municipality, much higher than the national average of only two - three percent.

The united credit information system in Shanghai has also collected credit information on 590,000 enterprises since March 2002.

(Xinhua News Agency September 27, 2003)