Money & Banking

Allow reporting of payment data of telcos and insurers to credit bureaus: TransUnion CIBIL

K. R. Srivats | | Updated on: Oct 31, 2018

Harshala Chandorkar

TransUnion CIBIL, a leading credit information bureau, has knocked at the doors of the RBI and Finance Ministry to allow telecom companies and insurers to report customer payment data to credit bureaus.

With cash flow-based lending on the rise in India, the credit bureau is also keen to tap the Goods and Services Tax Network (GSTN) to collect information for better credit profiling of MSMEs and individuals.

As on date, credit bureaus such as TransUnion CIBIL have access to data only from credit institutions such as banks and financial institutions. They have no access to alternative data such as non-credit information – payments for electricity and gas bills, telecom bills and rental payments.

“We are in discussions with the RBI and Finance Ministry to see if the definition of credit information under the law could be expanded. Telecom and insurance companies can use information from us, but why not ask them to submit data to us? The issue now is we are not allowed to capture that data from these companies for better profiling of consumers,” Harshala Chandorkar, Chief Operating Officer, told BusinessLine .

A fillip to banking services

Inclusion of “alternative data” – such as those from telcos and insurers – on consumers’ payment behaviour into the mainstream information bureau, can unleash the enormous potential to extend banking penetration in India, she said.

“Any such move would make available more credit, and also give a further push to financial inclusion. It will be extremely beneficial to make lending decisions, specifically to the segment without access to credit,” said Chandorkar.

She said that it has also been empirically proven that ‘alternative data’ can improve the outcome of financial inclusion when data comes to the credit bureau.

“We are asking the RBI to give us the permission to collect customers’ payment information from telcos and insurers. Request is to see if this can be done administratively or through the government in the form of change in law,” she said.

Chandorkar highlighted that many markets allow credit bureaus to collect data from alternative sources.

“Though CIBIL has been in India since 2001, we are still fairly at a nascent stage from credit bureau evolution perspective. Compare it with mature markets like US where credit bureaus have been there for 70-80 years. In South Africa, credit bureau has been there for over 100 years,” she said.

Published on October 31, 2018
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