Companies & Sectors
CIBIL to tap telecom, insurance for business opportunities

Besides banks and other financial institutions, CIBIL is looking towards telecom, insurance and MFIs as potential business opportunities

Credit Information Bureau (India) Ltd (CIBIL) has said that it is looking to expand its business by tapping new avenues and is in talks with telecom and insurance players.

Arun Thukral, managing director, CIBIL, said that he would be holding discussions next week with telecom players and officials in New Delhi in order to understand their business requirements. He said that telecom verification could become an alternative source of credit history for at least post-paid mobile customers. CIBIL already has an understanding with Vodafone Essar, but details were not provided.

Besides banks and other financial institutions, CIBIL is also looking towards telecom, insurance and microfinance institutes (MFIs) as potential data sources, Mr Thukral said. Earlier, in March, CIBIL signed partnerships with 31 MFIs to start a microfinance credit information bureau.

Similarly, Experian, the latest entrant in the credit bureau space is also ready to expand its services beyond individual credit information report (CIR). Phil Nolan, managing director, Experian India, said, "Yes, we would be looking to expand our services over time to include any industry sectors permitted within the Credit Information Companies (Regulation) Act (CICRA) and as per the RBI guidelines."

At present, CIBIL caters to about 300 members including banks, co-operative banks and non-banking financial corporations (NBFCs), and holds information of around 16 crore trades across individuals and businesses. The data, maintained by CIBIL, automatically gets refreshed every month from its members.

CIBIL has started providing a credit information report (CIR) to individuals through its website. However, as there is no separate mechanism to verify the identity of an individual, it is using postal services to send these reports. This whole process takes about a week. However, Mr Thukral said that the credit bureau is working to automate the process and individuals would be able to access their CIR through email or other such modes from the first quarter of the next fiscal.

So far, CIBIL, in which TransUnion International Inc holds 19.99% stake, was the only credit bureau. However, last year, the Reserve Bank of India (RBI) permitted Equifax Credit Information Services, Experian Credit Information Co of India and Highmark Credit Information Services to set up credit bureaus.

Earlier, in August, Experian started its operations in India. This was followed by Equifax, which last month commenced its operations in partnership with Bank of Baroda, Bank of India, Kotak Mahindra Prime Ltd, Religare Finvest Ltd, Sundaram Finance Ltd and Union Bank of India.

The last credit bureau in the line, Highmark, still has to start its operations. However, according to informed sources, it has started work with microfinance institutions network (MFIN), a self-regulatory organisation which has 39 members. MFIN, supported by philanthropic investment firm Omidyar Network and International Finance Corp, a member of the World Bank Group, is also planning to set up credit bureaus for the microfinance segment. MFIN has invested in Alpha Micro Finance Consultants, which in turn has invested around Rs2 crore to set up a credit bureau. This credit bureau will provide information like borrower name, address and loan details to CIBIL and Highmark.

Commenting on the increasing competition and its effect on business, Mr Thukral said, "Competition in any business is a welcome step as it gives better service to customers. In addition, India, which is at a nascent stage in the credit information business, offers good opportunities for growth. I think for a country of the size of India, three more players will not affect business as there is space for everyone to grow."

Echoing the same, Mr Nolan from Experian India, said," Competition is always beneficial for the development of any economy. I believe that the advent of competition in the Credit Bureau space in India will strengthening the credit economy of India which is a key aspect to accelerate growth and will benefit all stake holders. Access to organised credit is also fundamental to spur economic activity." 


Wednesday Closing Report: For whom Big Ben will toll

The domestic market opened in the green this morning, factoring in the rate cut announced by the RBI yesterday. Overcoming a fair bout of choppiness the market ended with gains of over half a percent, optimistic about the US Federal Reserve's policy decision, to be announced later today.

The market brushed aside the minor hiccups associated with the Reserve Bank of India's (RBI) policy announcement on Tuesday and opened with smart gains this morning, in line with markets across the globe. The realty sector, which ended lower yesterday, saw some buying action in the morning session. However, touching the day's high in mid-morning trade, the indices were range-bound. A small bout of selling towards the end of trade saw the indices paring some of their earlier gains.

Finally, the Sensex ended 120.05 points (0.59%) higher at 20,465. The index touched a high of 20,473 and a low of 20,426 during the session. The Nifty stood at 6160, up 41.50 points (0.68%). The index oscillated between a high-low of 6,182 and 6,147, respectively.

The market breadth was tipped in favour of the gainers today. The Sensex ended with 21 stocks in the advancing list against eight losers. The Nifty had 43 gainers and seven declining stocks. The broader indices ended in line with the key benchmarks; the BSE Mid-cap index gained 0.60% while the BSE Small-cap index rose 0.68%.

The top Sensex performers included Sterlite Industries (up 3.74%), Tata Motors (up 2.72%), ACC (up 2.49%), State Bank of India (up 2.19%) and HDFC Bank (up 1.91%). The losers were led by Cipla (down 1.10%), Reliance Communications (down 1.02%) and Reliance Industries (down 0.85%).

Baring the BSE Oil & Gas index, all other sectoral indices ended in the positive zone today. BSE Metal (up 1.55%), BSE Auto (up 1.21%) and BSE Consumer Durables (up 0.89%) were the notable gainers. On the other hand, BSE Oil & Gas index settled 0.49% lower in trade.

India's Oil and Natural Gas Corporation (ONGC) has beaten Chinese rival China National Offshore Oil Corporation (CNOOC) to become Asia's top oil and gas exploration and production (E&P) company. China National Offshore Oil Corporation (CNOOC) this year slipped to No 2 slot.

Under the stewardship of RS Sharma, ONGC climbed three places to take the top slot in the 2010 rankings released by Platts, one of the most respected global providers of energy and metals information.

Asian markets finished mostly in the green today as global brokerage firms upgraded benchmark indices in Hong Kong and South Korea. The announcement from the US Federal Reserve, due later today, also boosted sentiments.

The Hang Seng was up 2%, KLSE Composite added 0.07%, Straits Times gained 0.61% and Seoul Composite surged 0.93%. On the other hand, the Shanghai Composite was down 0.47%, Jakarta Composite shed 0.55% and the Taiwan Weighted lost 0.61% in trade today.

The US indices ended at their six-month highs on Tuesday ahead of the much-awaited announcement about fresh stimulus aimed at boosting the economy. Investors speculate that the mid-term polls will go in favour of the Republicans, seen as "business-friendly". Upbeat third quarter earnings reports also supported the rally.

The Dow gained 64.10 points (0.58%) to 11,188. The S&P 500 added 9.19 points (0.78%) to 1,193. The Nasdaq rose 28.68 points (1.14%) to close at 2,533.

Foreign institutional investors were net buyers of stocks worth Rs461 crore on Tuesday. Domestic institutional investors were net sellers of equities worth Rs202 crore on the same day.

Consumer electronics major Videocon (0.38%) today announced its plans of entering into the financial services business through a general insurance company in partnership with US-based property and casualty insurer Liberty Mutual Group (LMG).

The foreign partner will hold a maximum permissible 26% stake in the joint venture (JV) with Videocon owning the majority. An agreement is expected to be signed between the partners soon.

Ratings firm Moody's has assigned a long-term moderate credit risk to Yes Bank's (up 0.84%) currency deposits with a stable outlook, on account of the private lender's strong financial performance and profitability.

"Yes Bank has been assigned a Baa3 long-term and Prime-3 short-term global local-currency deposit ratings by Moody's. The outlook on all ratings is stable," the bank said in a statement.



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