Experian, the United Kingdom’s largest credit information solutions company, will soon set up shop in India. The $3.8-billion company has applied to the Reserve Bank of India (RBI) to set up a credit information bureau in India.
The company will hold 49 per cent stake in the bureau, while four Indian private banks will hold the remaining 51 per cent. As per current foreign direct investment (FDI) rules, there is a ceiling of 49 per cent FDI in credit information companies in India.
Richard Fiddis, Managing Director, Strategic Markets, Experian told the Hindustan Times: “We have applied for a licence to set up a credit information bureau in India in July and expect to start operations soon.”
Although Fiddis refused to divulge the names of the joint-venture partners, sources, who did not wish to be identified, said the company has tied up with ICICI Bank for consultancy and credit scoring.
Experian has a database of over 400 million records of individual credit accounts in the UK and the US and also maintains credit information on commercial enterprises. Information services account for about 50 per cent of its revenues.
Currently, Credit Information Bureau of India Limited (CIBIL), which was set up in 2001, is the largest company providing customised credit information services to banks and financial institutions.
State Bank of India and HDFC hold 40 per cent each in CIBIL, while US-based data information management companies Dun & Bradstreet and Trans Union hold 10 per cent each. Fiddis that India is an important market for Experian. “With India playing an increasingly important role as one of the fastest growing economies in the world’s financial and capital markets, the robustness of India’s financial system is critical to attracting investments,” he said.
“We will also provide specialised applications for transactions, billing and other banking activities, including fraud detection and decision analytics. We are in the process of developing a technology platform suitable for Indian needs,” Fiddis said.
Fiddis said that Experian, which has acquired 85 companies worldwide in the last couple of years, including a Brazilian information solution major for $240 million, was looking at acquisitions in India.
He said credit bureaus would give banks and financial institutions access to a customer's credit history. “It will encourage financial institutions to share data on customers (with prior permission) since the customer also has a right to know what data is being shared,” he said.