RBI move forces CIC firms to review shareholding pattern

Written by Mahalakshmi Hariharan | Mumbai | Updated: Jun 27 2009, 02:57am hrs
With the Reserve Bank of India (RBI) stating in its guideline that no Indian shareholder should hold more than 10% in the credit information company (CIC), some of the newly formed CICs have started taking a second look at their shareholding pattern, to keep up with the regulations.

Like any other Indian company, Crisil's shareholding in the CIC now, cannot exceed 10%, based on the revised regulations. The quantum of Crisil's shareholding in the CIC is yet to be finalised. Also, we are now changing our plans to set up a credit information bureau due to the regulatory restrictions laid down by the central bank, noted Roopa Kudva, managing director & chief executive officer with Crisil Ltd.

Meanwhile, Vikram Narayan, country manager of Experian Ltd, said the company is in discussions with Indian banks and non-banks to set up a joint venture and review the stakeholding pattern. We are scouting for partners in the banking and non-banking space and are in the process of setting up a joint venture and review the shareholding, he added. Experian also plans to set up its headquarters at Mumbai, with regional offices spread across the country.

We will also look at hiring 35-40 employees by the end of this year, Narayan said.

In April 2009, the RBI had issued an 'in-principle-approval' to CICs like Credit Information Bureau ( India ) Ltd (CIBIL), Equifax Credit Information Services Pvt Ltd, Experian Credit Information Company of India Pvt Ltd and Highmark Credit Information Services Pvt Ltd.

However, CIBIL said they have no plans to rope in other players, to form a joint venture.

The existing share holding pattern of CIBIL does not have any Indian shareholder holding more than 10% stake in the company. So, the question of changing the shareholding pattern does not arise, said an official from CIBIL, adding that the shareholding distribution will be constant. Various banks like Standard Chartered Bank, Punjab National Bank, Union Bank of India, HSBC, Indian Overseas Bank, Bank of India, Central Bank of India and Bank of Baroda hold 5%, while HDFC, State Bank of India and ICICI Bank hold 10% each, in CIBIL.

CIBIL is working on different products like skip tracing, mortgage repository and CIBIL detect. We are aggressively working on all of these and hope to launch them before the year-end, said the official.

The official added that CICRA Act 2005 provides consumer access to credit data. We are awaiting detailed guidelines from RBI for making reports available to individuals. Also, providing credit reports to individuals will involve the setting up of a full fledged customer service cell and developing the infrastructure, which will take sometime. While we are evaluating this, we will be able to share timelines only when the RBI guidelines are available to us, he added.

Meanwhile, Viren Bhandari, senior vice-president of global strategies & execution at Equifax, noted that they are waiting for a license from the RBI for the setting up of the company.