FDI policy for CIB on Cards

The government is likely to come out with a policy on foreign direct investment (FDI) in credit information bureau (CIB).

Credit information bureau is a repository of credit information with current and historical data on both existing and potential borrowers. CIB maintains both negative and positive database of credit information, which can be accessed by lending institutions.

However, the bureau does not collect information on deposite accounts, current account and cheque account of a borrower. According to banking sources, the investment policy under discussion proposes to allow FDI up to 49 per cent of the total investment in a credit bureau.

However foreign institutional investors (FIIs) may not be allowed to invest in such ventures.

At present, there is only one credit information bureau "� Credit Information Bureau India Ltd (Cibil), jointly floated by Indian banks and foreign partners Dun and Bradstreets (D&B) and Trans Union International.

While D&B and Trans Union together hold 20 per cent., the rest of the equity is held by State Bank of India, Bank of Baroda, Bank of India, HSBC, Indian Overseas bank, Sundaram Finance, HDFC, Punjab National Bank, Union Bank, Citicorp Finance, ICICI Bank, Central Bank of India, Standard Chartered Bank and GE Investments in India.

Under the proposed guidelines of the RBI, total equity participation by foreign technology providers has been capped at 20 per cent, given the sensitive nature of credit information.

However, a foreign technology partner can be included as a collaborator to benefits from the expertise available with the multinational bureaus.

Otherwise, the equity participants in the bureau would be main user groups, such as banks, financial institutions and the non-banking finance companies registered with the RBI.