The Hindu Business Line : CIBIL launches commercial bureau

The Credit Information Bureau of India Ltd (CIBIL) has launched its commercial bureau for catering to non-individuals viz. corporate, small and medium enterprises (SMEs) and other types of business entities earlier this month.

The database compiled by CIBIL would contain the credit history of borrowers including details such as the name of the company or partnership, full address, registration number, names of directors or partners, credit facilities availed, amount outstanding against each facility, among other information.

Lenders would be able to query the database for a fee and base their lending decisions on the credit information report.

Mr S. Santhanakrishnan, Chairman, CIBIL, said, "Going forward, lending institutions can have meaningful recourse to credit histories of businesses for more informed credit decisions and with a faster turnaround time.

The launch would especially help banks and financial institutions in lending to SMEs who are the focus of Government and RBI thrust."

Apart from the reduction in loan processing time, the facility would help borrowers with good track record to get adequate credit at affordable rates, Mr Santhanakrishnan said.

Mr Santhanakrishnan said 37 lending institutions had provided their commercial borrower data to CIBIL so far and about 6 lakh records had been loaded into their database. He said that CIBIL would soon have a base of 1 million records.

An enabling legislation to be notified shortly would make it mandatory for every lender to share the information with credit information bureaus.

He said there was considerable complexity in the compilation of the data for the commercial bureau.

Companies availed themselves of a plethora of facilities such as packing credit, term loan, export credit and cash credit from different banks.

Capturing this correctly was a big task, he said. Asked about quality issues, Mr Santhanakrishnan said while the information was often available in the files maintained by banks, the same was not available on their IT platform.

CIBIL had launched its consumer bureau, catering to individual borrowers two years ago and has amassed 55 million records so far. 90 per cent of the lenders in the financial system are now using the database, Mr Santhanakrishnan said.