UK-based Experian in credit information JV with seven FIs
November 24, 2009
UK-based business and credit information provider Experian PLC has formed a joint venture (JV) with seven Indian banks and financial institutions to establish a credit bureau in India that will advise financial institutions and retail businesses about lending to consumers.
Nottingham-based Experian will hold a 49% stake in the joint venture, Experian Credit Information Co of India, while the other 51% will be shared between Axis Bank, Federal Bank, Indian Bank, Magma Fincorp, Punjab National Bank, Sundaram Finance and Union Bank of India.
Experian is one of only a few companies to have been granted a provisional licence to operate a credit bureau in India. It will now apply to the Reserve Bank of India for a final licence.
Richard Fiddis, managing director of the strategic markets division at Experian, said, "Along with our joint venture partners, we are excited about the creation of the new Experian Credit Information Company in India.
"With more than 40 years of experience, we operate 15 consumer and 13 business credit bureaux globally and have played an active role in helping shape industry best practice.
"Our Indian credit bureau will provide the platform to launch a range of new value-added capabilities for the Indian market, helping to accelerate the financial services sector's development and to protect consumers.
"The move reflects Experian's strategy of increasing business from activities in fast-growing countries that are known as emerging economies,” said Mr Fiddis.
Senior bank professional TS Narayanasami has been appointed chairman of Experian Credit Information Company. He said, "I am proud to be associated with this important venture which will be to the overall benefit of the Indian financial services market place and consumers. As a leading global credit bureau operator, Experian will bring its cutting edge technology and expertise to India."
Earlier speaking with Moneylife, Mr Fiddis suggested that competition in the credit bureau business may actually help customers, because competition will force them to introduce services and innovations that already exist overseas. More important, they will play a significant role in much-needed consumer education.
As per the RBI guideline, it is mandatory for banks to be a member of at least one credit bureau. At present, Credit Information Bureau of India Ltd (CIBIL), promoted by the State Bank of India (SBI), Housing Development Finance Corp Ltd (HDFC), Dun & Bradstreet Information Services India Pvt Ltd and Trans Union International, is the only credit bureau operational in India.
With a view to bolster financial stability of the PSU and private banks and arrest the delinquency rate, the RBI had issued a regulatory framework by allowing banks to access information on the potential borrowers and their creditworthiness from credit bureaus. -Yogesh Sapkale[email protected]