Our Bureau

Mumbai, May 16

STATE Bank of India and Housing Development Finance Corporation (HDFC) have reduced their stake in Credit Information Bureau (India) Ltd (CIBIL) to 16.25 per cent each, down from 40 per cent each.

Their stake has been divested in favour of ICICI Bank, Punjab National Bank, Bank of India, Central Bank of India, Union Bank of India, Bank of Baroda, Citibank, HSBC, and Sundaram Finance, according to a CIBIL release.

Seven of these banks now own five per cent stake each in CIBIL, while ICICI Bank holds 10 per cent and Sundaram Finance 2.5 per cent, said a senior HDFC official.

Dun & Bradstreet Information Services India and Trans Union International, the earlier shareholders, will continue to hold 10 per cent each.

"With the well-dispersed shareholding and wider participation by credit grantors, the positive impact of CIBIL on the financial sector is sure to be felt significantly in the days to come," said Mr S. Santhanakrishnan, Chairman, CIBIL.

The divestment is in keeping with the Credit Policy of 2004-2005, which said that credit bureaus should move towards a sufficiently diversified ownership, with no single entity owning more than 10 per cent of the paid-up capital in the first stage and five per cent later, the release added.

Credit information reports from CIBIL enable banks to offer differential pricing to customers with good credit records and reduce defaulters, thereby decreasing potential non-performing assets.

CIBIL launched its operations last year with a database size of four million records from 12 members.

The database has now grown to over 20 million records from 30 members.

The company has a paid-up capital of Rs 25 crore.

(This article was published in the Business Line print edition dated May 17, 2005)
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