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Prior to the establishment of the CIB, all FIs shared credit information on the client through Loan Clearance Certificate which had the following drawbacks;

  1. Long Duration: The system of sharing credit information amongst the FIs through the exchange of Loan Clearance Certificate was time consuming.
  2. Inappropriate means of Communication: The means of communication used in exchange of Loan Clearance Certificate was usually through fax, as a result of which certificates were often misplaced.
  3. Incorrect / Incomplete Data: Some of financial institutions have faced the situations where the data provided on the certificates was not complete or incorrect.

In consideration to the above issues the FIs expressed difficulties in processing the loan. Therefore, to improve the Loan Clearance system, RMA and the FIs decided to replace the procedure of exchanging Loan Clearance Certificate with a more systematic and advanced credit information exchange by setting up the Credit Information Bureau in Bhutan.