The Hindu Business Line : Ministry for 49% cap on foreign investment in credit info cos

New Delhi, Aug 19 The Finance Ministry has recommended to the Commerce and Industry Ministry that the foreign investment cap on credit information companies be placed at 49 per cent.

Official sources said that the Department of Financial Services in the Finance Ministry has recommended the cap on such companies to the Department of Industrial Policy and Promotion (DIPP) in the Commerce and Industry Ministry.

“Now it is for the DIPP to notify this,” a senior Finance Ministry official said.

Currently, there is no specific policy on foreign investments in credit information companies.

The proposed cap would include FDI and foreign portfolio investment through FIIs, sources said.

Banks, financial institutions, State financial corporations, non-banking financial companies, credit card companies and housing finance companies are often keen to gain a complete picture of the payment history of credit applicant.

Credit information companies fill this need of these institutions.

In India, Credit Information Bureau (India) Ltd or CIBIL, which was incorporated in 2000, was the first to enter the credit information market.

With growing consumerism, credit information market has grown tremendously and more players, including credit rating agencies, are eyeing this market.

Currently, CIBIL is reported to have payment history information on 90 million individual borrowers and 1.2 million commercial borrowers.

CIBIL has diversified shareholding comprising certain commercial banks, foreign companies and non-banking finance companies.

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