The Reserve Bank of India has not made a decision that will be getting the much coveted licenses to operate credit bureaus in India. The largest credit bureau operators have entered into partnerships with local Indian companies due to a 49% FDI equity restriction.
UK based Experian has joined hands with HDFC, ICICI, (both are shareholders in CIBIL, only credit bureau currently operating in India) Axis and Centurian Bank of Punjab. Experian will hold 49% in the venture; ICICI will hold 19.9%; Axis will hold 11.1% and HDFC and Centurian Bank of Punjab will hold 10% each. The initial capital of the joint venture will be US$ 7.4 million.
Equifax has teamed up with Tatas and S&P’s owned rating agency CRISIL. Tatas to hold 25%, Crisil will hold 26% and Equifax will hold 49% in equity in the new joint venture. The three partners are said to invest US$ 4.5 million which is to increase over a three year period to a total of US$ 20 million.
A Newcomer is High Mark Credit, who is backed by US based CBCInnovis, Fair Isaac and several banks, has applied for a license. It has hired a number of industry experts and has set up offices in Mumbai.
The sudden interest in the Indian market by foreign information companies is driven by the huge retail market that has emerged in the country. However consumer credit growth is retarded by the lack of information and banks have now become more receptive to the idea of sharing information in order to reduce credit losses and to be able to increase the customer base. The home loan market is estimated to be US$ 35 billion. CIBIL, the first Indian Credit Bureau is said to have now reached critical mass with over 100 million records on file. Source: Local press coverage.
BIIA Newsletter April 2008 Issue