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Credit Information Bureau India

Guest post by: Kaviraj Singh

Article Overview: Credit Information Bureau (India) Limited has been established to cater to the credit information requirement of the financial sector and serves as an effective mechanism for curbing the growth of Non-Performing Assets (NPAs). CIBIL's equity is held by State Bank of India, Housing Development Finance Corporation Limited, Dun & Bradstreet Information Services India Private Limited and Trans Union International Inc. The shareholding percentages are in the proportion of 40:40:10:10 respectively.

Credit Information Bureau India

Credit Information Bureau (India) Limited has been established to cater to the credit information requirement of the financial sector and serves as an effective mechanism for curbing the growth of Non-Performing Assets (NPAs). CIBIL's equity is held by State Bank of India, Housing Development Finance Corporation Limited, Dun & Bradstreet Information Services India Private Limited and Trans Union International Inc. The shareholding percentages are in the proportion of 40:40:10:10 respectively.

The Credit Information Companies (Regulation) Act, 2005, and various Rules and Regulations issued by Reserve Bank of India has empowered CIBIL or (Credit Information Bureau (India) Ltd to collect the data from various types of credit grantors (i.e. lenders) and then share the same within the group. The legislation has enabled banks to submit data to CIBIL without obtaining borrower consent.

Credit Information Reports (CIR) prepared by CIBIL can be accessed by Members, which include leading Banks and Financial Institutions, who are usually the on the principle of reciprocity i.e. only those Members who have provided all their data to CIBIL are permitted to access CIRs. Disclosure to any other person or entity is prohibited. The Members of CIBIL are Banks, Financial Institutions, State Financial Corporations, Non-Banking Financial Companies, Housing Finance Companies and Credit Card Companies are Members of CIBIL.

CIBIL's aim is to fulfill the need of credit granting institutions for comprehensive credit information by collecting, collating and disseminating credit information pertaining to both commercial and consumer borrowers, to a closed user group of Members. Banks, Financial Institutions, Non Banking Financial Companies, Housing Finance Companies and Credit Card Companies use CIBIL's services. Data sharing is based on the Principle of Reciprocity, which means that only Members who have submitted all their credit data, may access Credit Information Reports from CIBIL. The relationship between CIBIL and its Members is that of close interdependence.

CIBIL is a composite Credit Bureau and will cater to both commercial and consumer segments. The Consumer Credit Bureau will cover credit taken by individuals and the Commercial Credit Bureau will cover credit taken by non-individuals like partnership firms, proprietary concerns, private and public limited companies, etc.

For credit grantors to gain a full and complete picture of the past payment history of the credit applicant, they must be able to gain access to the applicant's complete credit record that may be spread over different institutions. CIBIL will collect commercial and consumer credit-related data and use such data to create, package and distribute credit reports to Members.

A Credit Information Report (CIR) is a factual record of a borrower's credit payment history compiled from information received from different credit grantors. Its main purpose is to help credit grantors make better lending decisions - quickly and objectively, in an informed environment.

Although individuals / borrowers can apply to CIBIL through members only to access their individual credit reports, however, private companies before entering into any transaction with another company cannot obtain credit information reports about the other party.

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Article Tags: credit information india credit report india, information bureau, kaviraj, trustman



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