Credit Information Bureau (India) Ltd is expanding its portfolio of services by introducing a Risk Index for corporates and business houses.
This will help Indian banks and non-banking finance companies, most of which are shareholders in the company, to take quicker decisions on extending loans to these business entities. The lower a company figures in the Risk Index, the more confidence banks will have in its ability to service the loan.
The credit information company (CIBIL) currently has the TransUnion Score for individual borrowers that are being used by banks and financial institutions for credit decisions. The score assigned to a borrower ranges from 300 to 900.
CIBIL Managing Director Arun Thukral was not willing to give a time frame for the introduction of the Risk Index scheme, stating that the company was working on it.
He said while the credit rating agencies give a broader picture of the risk profile of a company, CIBIL’s index will be a quick “snapshot” for lenders.
Keywords: Credit Information Bureau (India) Ltd, CIBIL, portfolio of services, Risk Index for corporates, business houses, TransUnion Score, individuals
Comments:
A Move in the right direction helping the lenders towards better and scientific assessment of Credit proposals which will them prevent the ac's becoming non-performing otherwise .A Better mechanism for evaluating viability of credit proposals of units.
How far such an Index will help assessing the repaying capacity is anybody's guess. It
is hard-nosed analysis of the managerial, technical, marketing, financial and
economic factors by the lenders of specific cases at micro-level that would matter.
Indices are guide for the past. It is only a seasoned lender who could ask for right
information and data which the borrower will be eager to supply. Once money is
made available, the borrower may not be interested in providing such data.
Assessment of management group is difficult because its profile changes too often
and at times not visible or known.
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