The Hindu Business Line : 49% foreign investment in credit info cos allowed

New Delhi, Jan. 30 Foreign investment up to 49 per cent will now be allowed in credit information companies (CICs) with prior approval of the Government and regulatory clearance from the Reserve Bank of India (RBI).

Within the overall foreign investment limit of 49 per cent, foreign institutional investors (FIIs) will be permitted to invest up to 24 per cent. The FIIs can, however, invest only in the CICs listed at the stock exchanges, according to the foreign investment policy cleared by the Union Cabinet here on Wednesday.

Official sources said that no FII would be allowed to take more than 10 per cent stake in a CIC, within the overall FII limit of 24 per cent.

The Cabinet also gave its nod for deleting ‘Credit Reference Agencies’ from the list of non-banking finance companies activities permitted for FDI up to 100 per cent on the automatic route.

Hitherto, there was no specific policy on foreign investment in CICs. 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.

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