SBI, ICICI Bank, HDFC Bank to join credit bureau

State Bank of India, ICICI Bank and HDFC Bank are likely to join the MasterCard-led India Co-operation Committee (ICC)'s negative file project.

The negative file project or credit bureau has the names of all credit card holders and retail customers who have defaulted on their payments and whose accounts have been written off.

The card base of the negative bureau, which currently is at six lakh, is likely to double in the next few months as these banks join.

The banks which currently contribute to the base are Citibank, HSBC, StanChart, Central Bank of India, Bank of Baroda, Bank of India and Andhra Bank. Banks are charged a fee for accessing this database.

"There are currenly 1,00,000 queries on this base every month. The number of queries and also the total base is likely to double in the next few months with the entry of new banks. It is also proposed that non-card companies like mobile phone companies also join this data base. These companies also need to know the credit worthiness of the customers," said Nitin Gupta, vice-president and general manager MasterCard Internatuional's (South Asia).

The negative bureau has helped arrest the fraudulent usage of cards.

The ICC has also set up an acceptance development fund for marketing and subsidising the cost of terminals.

"The ICC is in talks with the major terminal manufacturers in the world to bring in the latest Europay, MasterCard, Visa (EMV) complaint EDC terminals into the country at around $200-230 per terminal," says Central Bank of India's general manager and ICC chairman K Raghuraman.

The total number of electronic data capture (EDC) terminals in the country is likely to double in the next two years as prices of these terminals have fallen by 50 per cent. The cost of these terminals was around $450-$500 a few months back.

"India is a large market and the growth in the other markets has stagnated. Also there is a lot of competition between the terminal manufacturers. By the end of 2005 it is projected that the number of terminals are set to touch two lakh. New acquiring banks which will get into this arena are likely to help in increase the number of terminals," says Gupta.

The reduction in import duties have also helped in the reduction of terminal costs.

The banks which are the major acquirers in the acquiring business now are HDFC Bank, ICICI Bank, Citibank, HSBC and Central Bank of India.

SBI is expected to enter into this business in next few months and is expected to set up a significant number of terminals.

The new terminals are likely to be set up in the smaller towns and cities.