SBI, HDFC unload 47.5% in Cibil

Consortium of banks picks up stake at Rs 20 a share

State Bank of India (SBI) and Housing Development Finance Corporation (HDFC) today divested 47.5 per cent in Credit Information Bureau (India) Ltd (Cibil) to a consortium of banks.

With this, the SBI-HDFC combined has brought down their stake in Cibil from 80 per cent to 32.5 per cent.

It is understood that the two entities sold their holdings shares at Rs 20 per share.

SBI and HDFC have pared their stake following the Reserve Bank of India (RBI) governor Y V Reddy's announcement in the annual policy for the year 2004-2005 stating that its desirable that credit bureaus have diversified ownership with no single entity owning more than 10 per cent of the paid-up capital in the first stage, and 5 per cent later.

ICICI Bank now holds 10 per cent in the entity; Punjab National Bank, Bank of India, Central Bank of India, Union Bank of India, Bank of Baroda, Citibank, HSBC hold five per cent each; and Sundaram Finance holds 2.5 per cent stake in Cibil.

Cibil, India's first credit information bureau which was established by SBI and HDFC with shareholding of 40 per cent each, while Dun & Bradstreet Information Services India Pvt Ltd (D&B) and Trans Union International Inc hold 10 per cent each.

D&B and Trans Union have also provided the necessary technical and software support to Cibil.

Cibil had launched its consumer bureau operations in 2004 with a database size of 4 million records from 12 members. Today, around 30 banks access data and share reports.

Credit information reports from Cibil enable banks to offer differential pricing to customers with a good credit record and reduce defaulters, thereby decreasing potential non-performing assets.