FDI cap for credit bureaus likely at 49%BS Reporter / Mumbai March 29, 2007The government is likely to cap foreign direct investment (FDI) in credit information bureaus at 49%, as it prepares guidelines for entry of foreign companies in the sector made attractive by the booming retail financial services market.The government has been considering either a 49% or 74% cap, but is more inclined to go ahead with a lower cap to begin with, banking sources said. Credit information bureaus collect borrower data from banks and financial institutions, both positive and negative, for use by financial institutions subscribing to it.Experian, which claims to be the only global credit information solutions company, is seeking to launch its subsidiary in India, with several banks including ICICI Bank having subscribed to its analytics and other services.India already has a credit bureau called Credit Information Bureau India (CIBIL), 62.5% of which is owned by Indian lenders including State Bank of India, ICICI Bank, Housing Development Finance Corporation (HDFC) with 10% stake each.Retail credit has been growing at over 40% since 2004-05 increasing its share in total advances to 25.5% at the end of March 2006 from 22% in March 2004. The phenomenal growth in the last three years has thrown up opportunities for companies that provide credit information and related services.
