The country's first credit information bureau, CIBIL, is mulling to come out with a index for corporates, which will help financial institutions in assessing risks of lending to them, a top official said today.
The index will be useful for banks and other financial institutions when any company goes for loans, Credit Information Bureau India Ltd's (Cibil's) Managing Director Arun Thukral told reporters here.
He, however, did not specify when the bureau will come out with the index.
"We are intending to develop a risk index not a score. Risk index will be 1 to 5. We need to have matured database over a period to come out for index. We should have a consistent history over a period of time to come out with a predictable index or a score," Thukral said.
He said CIBIL offers credit information of corporates, which have all loans the commercial entity is having without any risk index.
Globally, risk index products are available. But in India it is yet to be introduced.
Comparing the differences of a risk index with credit rating, Thukral said a credit rating agency will look at
broader picture such as balance sheets, loan portfolios. However, risk index is given based only on the credit
"We don't look at any additional information. We are trying to give snapshot based on the credit record (of the
corporate). We will come out with what kind of risk is involved," he added.
Replying to query, he said the bureau is working on credit information for micro-finance borrowers.
He pointed out that assigning unique identification for each borrower has become a problem.
Thukral said according to data available with them, more than 88% of new home loan borrowers acquired in 2011 had a score of 750 and above out 900.
Since the growth of credit information industry, the CibilTransUnion Score has been widely used by banks and financial institutions in India for credit decisions. The score assigned to a borrower ranges from 300 to 900.