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Friday, May 27, 2005

CIBIL and data sharing

On 4 November 2004, SarbaJit Roy filed his Hacking Complaint seeking that criminal charges be registered against senior officers of Standard Chartered Bank India, RBI and CIBIL for illegally sharing credit information without consent of borrowers. On 9th November 2004, the Head of Standard Chartered Bank's Credit Division Mr. Shyam Shrinivasan was immediately shifted out of India to Malaysia, and the same day RBI read the riot act to foreign Banks based on Roy's complaint.

Data sharing? Get borrowers' consent, says RBI

BS Banking Bureau in Mumbai | November 10, 2004 12:33 IST

The Reserve Bank of India on Tuesday called upon banks to obtain consent from all their borrowers to establish an efficient credit information system.

Credit Information Bureau (India) Ltd (CIBIL) currently has a database of around 8 million records of the credit history of individual consumers taken from various banks, financial institutions and non-banking finance companies.

Till date only 17 banks have shared their full data with CIBIL. The largest private sector bank in the country ICICI Bank has yet to take a final call whether it would share all its data with CIBIL.

Chanda Kochhar, executive director ICICI Bank, said the bank is sharing the list of wilful defaulters with CIBIL.

However, when its come to sharing of other data the point of contention is how the data will be used, how many banks will be able to share all the information and the issue of confidentiality is also crucial.

These issues need to be addressed and as when the bank is satisfied with the outcome of the discussion we would be ready to share the information, said Kochhar.

Financial institutions, housing finance companies, and banks, which subscribe to the service, can query CIBIL about the credit history of these borrowers on the payment of a nominal fee. CIBIL has decided to charge Rs 10 per query, up to December.

The credit report from CIBIL would indicate, how much the individual has borrowed and what his/her repayment history has been.

This is expected to mitigate credit risks, enable speedier and more objective credit decisions by banks.

The housing major Housing Development Finance Corporation and State Bank of India hold 40 per cent each of CIBIL's equity, while Trans Union International Inc, and Dun & Bradstreet Information Services India Pvt Limited hold 10 per cent each.

DB and TU provides the necessary technical and software support to CIBIL.


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