From 13 members and database on four million trades in 2004, when Credit Information Bureau of India (Cibil) was set up, the country’s first credit information company now has 162 members and database on 127 million companies and individuals. The company, which launched operations in November 2007, hopes to add to the list of offerings by the end of the year. Cibil Managing Director Arun Thukral tells Niladri Bhattacharya and Sidhartha that the company will soon offer the first fraud repository, data on personal loans and a mortgage repository that lenders can access while taking credit decisions. Excerpts:
Following recent changes proposed by RBI, will there be a change in Cibil’s shareholding pattern?
Yes, there is a possibility. RBI regulations now allow up to 49 per cent foreign investment in a credit information company. Our technical partners, both TransUnion and Dun & Bradstreet, would obviously be interested in it. They have shown interest in the past.
Any one of them can take 49 per cent or they can split it between them. That’s something that they are best placed to answer. But from our standpoint, a higher ownership by a global player with international expertise will be extremely positive as it will mean greater commitment, investment and technical expertise.
Can you share some details on the fraud and mortgage repositories and other new products that are planned?
We already have the first generic score — CIBIL TransUnion — which provides a score between 300 and 900. Going forward, we are looking at integrating the commercial and consumer bureaus so that you can get a comprehensive picture. For instance, one would also like to know the personal financial behaviour of directors or partners of a company or a firm.
There are several other things and we are looking to develop personal loan score, which will provide data just on personal loans as opposed to a composite credit score that we provide at present factoring in all transactions (such as credit cards, home loans, personal loans and auto loans).
The fraud repository will help banks access information, which is so far not disclosed to anyone, but the Reserve Bank of India. Before they decide on something they will use the data. It will help reduce frauds and chances of someone vanishing after taking a loan.
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Similarly, the mortgage repository will help banks in finding out if someone has used the same papers to get loans from multiple sources. At present, they are unable to do so.
We understand that telecom companies can access data related to banks, but banks cannot. How is the problem being dealt with and are you also trying to get other service providers to share data that banks can access?
Yes. The law states that telecom companies can be our specified users, which means they can access the information from us.
We still need clarity on whether these firms will be allowed to share data with us. If they can contribute data, it will immensely benefit all our members in their risk management. We would also like utilities to share information, but it is not clear if they provide credit or not. Public domain information should be available. But it should be verified and qualified.
There are complaints that data on borrowers are updated with a lag and that affects their credit score. What are you doing about that?
Banks and financial institutions submit data to us on a periodic basis, which is uploaded in our database. Earlier, some were updating data on a monthly basis, while some were doing them every quarter.
Now, it has been made mandatory to submit data on a monthly basis and banks have started doing that. We are working closely with our technical partners and have made significant progress in improving the data upload time. The lag could be because institutions in India are still not completely on the core-banking platform, because of which there could be a lag in submission of data by them.
Next year onwards, individuals can access their credit score. How will it work?
One can ask the credit bureau for one’s individual score. To begin with, an individual will have to send a request through a mail and then after verifying the person through certain security questions, we will post the score to his address, which we have. But the biggest challenge in the absence of a unique identity number for Cibil will be the identification and data security issues. Initially, it will work like this, but going forward, we will add a BPO.
How does Cibil view the entry of new players now that the rules have been changed?
Entry of new players and competition in any sector is good. It leads to innovation, better products and services and offers customers a choice. Cibil will have a definite advantage over other players because of its existing large database, experience of working in the Indian market and existing strong relationship with our customers.
So, will banks access data from multiple agencies? How does it work globally?
They can. Globally, you can have multiple agencies, but they are not necessarily strong in different areas. For instance, in the US it is based regionally. In India, the concept of regional credit bureau is not there, so when you are a national player, you don’t want to miss out on that.