Equifax gets clearance for credit bureau

Equifax gets clearance for credit bureau

Mumbai: The Reserve Bank of India (RBI) has given its in-principle approval to Equifax Credit Information Services Pvt. Ltd to launch a credit bureau, making it the fourth firm to get the permission.

Credit Information Bureau (India) Ltd (Cibil) is the only fully functional credit bureau in India now, but Experian Credit Information Co. of India Pvt. Ltd and Highmark Credit Information Services Pvt. Ltd, too, have RBI’s in-principle approval to start services.

Equifax Inc., a US-based consumer credit reporting agency, will own a 49% stake in the Indian firm. Other stakeholders include Bank of Baroda, Bank of India, Union Bank of India, Kotak Mahindra Prime Ltd , Sundaram Finance Ltd and Religare Finvest Ltd. Equifax Credit has an authorized capital of Rs75 crore and will start operations in six months.

“We have given the names of the investors to RBI and we have received an in-principle approval from them to go ahead with the venture," a senior official at Equifax said on condition of anonymity.

Equifax was to set up the credit bureau with Tata Capital Ltd and Crisil Ltd, a Standard and Poor’s (S&P) firm. That partnership did not take off as each firm wanted to own 25% in the credit bureau, which regulations do not permit.

Tata Capital exited the venture after RBI said no domestic investor could hold over 10% in a credit bureau, said another senior Equifax official, who too did not want to be named because an official announcement is yet to be made.

He added that foreign direct investment norms prevented Crisil from investing in Equifax Credit as it was designated a foreign firm by virtue of S&P having a 58.46% stake in it, and Equifax was to be the foreign investor in the Indian firm with a majority holding.