Suraj & Ankit_cibil Final

7/31/2019 Suraj & Ankit_cibil Final

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BY SURAJ CHHETRI

& ANKIT SHARMA

CREDIT INFORMATION BUREAU (INDIA) LIMITED

IN ASSOCIATION WITH DUN & BRADSTREET AND TRANS UNION


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Role of Credit bureau

information in creditmanagement


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The Concept

Wish list of a credit grantor Make informed and objective credit decisions

Minimise adverse selection

Deter concurrent borrowings & serial defaulters

Improve asset quality and reduce NPAs

Increase market penetration

Reduce turn around time

Will happen with complete & reliable credit information


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What is a Credit Bureau?

An organization that:

Collects data pertaining to

Identity data about Consumer (Individual) and Commercial

(Business) entities

Credit Information

Payment History

Compiles Credit Information Reports on consumer and

commercial borrowers and makes these available to

members on request.

Is a third-party service provider for the financial sector


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International Scenario

In developed countries, Bureaus have been in existence for a

long time.

In USA

Dun & Bradstreet - 1841

Equifax - 1946

Trans Union1968

In other countries

Germany - 1934

Turkey - 1951

Belgium -1967


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Credit Bureaus improve efficiency

By improving loan processing speed

By reducing operational costs

Benefits of a Credit Bureau


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Credit penetration is higher in countries with credit bureaus

Benefits of a Credit Bureau


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International Scenario

In developing countries

Different factors spurred the growth of bureaus

Recognition of bureaus as integral to a maturing financial

sector

Lengthening loan terms following stabilisation ofpreviously volatile economies

Economic crisis in the financial sector

Mexico Argentina BrazilChile Hong Kong Thailand

Singapore Sri Lanka Bangladesh

and now


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________________________________________________________________

CREDIT INFORMATION BUREAU (INDIA) LIMITED

IN ASSOCIATION WITH DUN & BRADSTREET AND TRANS UNION

Indias First Credit Information Bureau


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MISSION / VISION

To Catalyze growth of Credit in India through: SOLUTIONS that enable well informed

Credit decisions.

TECHNOLOGY that enables superior

information availability.

PEOPLE that provide high quality

services.


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CIBIL

Provides Credit Information Centralized

Comprehensive

Reliable

Facilitates credit grantors in deciding on Whom not to give credit

Whom to give credit and what extent

Provides objective tools for risk management

from a Neutral Service Provider


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CONTI.

CIBIL collects and maintains records of an individuals paymentspertaining to loans and credit cards. These records are submitted to

CIBIL by banks and other lenders, on a monthly basis.

This information is then used to create Credit Information Reports(CIR) and credit scores which are provided to lenders in order to

help evaluate and approve loan applications.


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The CIBIL TransUnion Score is a 3 digit numeric summary ofyour credit history which indicates your financial & credit health.

The Score is derived from your credit history as detailed in the

Credit Information Report [CIR] and ranges from 300 to 900

points.

Your credit score tells the lender how likely you are to pay back

loan or credit card dues based on your past repayment behavior.

The higher your score, the more the chance of your loanapplication getting approved!


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CONTI.

90% of new loans sanctioned are to individuals with acredit score of 700 and higher!


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Getting your loan approved can be complicated process. Just gothrough the Loan evaluation process to understand the critical role,

the CIBIL TransUnion score plays in getting your loan sanctioned.


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CONTI.
http://www.cibil.com/node/342


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CIBILs products, especially the CIBIL TransUnion Score and theCIR are very important in the loan approval process.The credit

score helps loan providers quickly determine, who they would like

to evaluate further to provide credit. The CIBIL TransUnion Score

ranges from 300 to 900.

Once the loan provider has decided which set of loan applicants to

evaluate, it analyzes the CIR in order to determine the applicants

eligibility.


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Since, the credit score and CIR not only helps loan providersidentify consumers who are likely to be able to pay back their

loans, but also helps them to do this more quickly and

economically. This translates into faster loan approvals.

Since, CIBIL has made your credits score and CIR available to

you, you will be able to see how valuable a customer you are to

loan providers.


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Worlds leading providerof B2B credit information

Dun & Bradstreet

Amongst the worldslargest consumer bureaus

Indias largest bank Indias largest HFC

CIBIL The Promoters

40% 40%

10% 10%

CIBIL was established by


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CIBIL The Shareholders

The shareholding pattern now is as follows: -

Shareholding Distribution (%)Standard

Chartered Bank5% State Bank of India10%

Bank of Baroda5%

Trans Union InternationalInc. 27.5%

The HongKong and

Sanghai Banking

Corporation Ltd.5%

Bank of India5%

Indian Overseas Bank5%

Sundaram Finance Ltd.2.5%Housing Development

Finance Corporation Ltd.10%

Punjab National Bank5%

Citicorp Finance (India)

Ltd 5%

Union Bank of India5%

ICICI Bank Ltd.10%

Central Bank of India5%


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CIBILa unique business model

Members Banks

All-India Financial Institutions

Non-Banking Financial Companies

Credit Card Companies

Housing Finance Companies

State Financial Corporations


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CIBILa unique business model

CIBIL and its Members A close interdependent relationship

CIBIL to give prompt and meaningful credit information

This will depend upon

Reach of Membership

Quality and timeliness of data provided by Members


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CIBIL

A centralized Database for sharing information

A world class credit bureau dealing with

Commercial & Consumer credit information

Positive & Negative credit information

Offers Risk Management Solutions

Scoring

Fraud Detection

RelationshipBased Lending Information Based Lending


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Functioning of CIBIL


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DISPUTE RESOLUTION

Your Credit Information Report (CIR) plays a large part in theloan application process. Hence, any discrepancy in your CIR may

result in reduced chances of a loan approval. Therefore, it is

important that the information on your CIR is accurate and

updated.

The CIBIL CIR consists of Consumer / Borrower Information,

Account Information and Enquiries. If any information on your

CIR is inaccurate or needs to be updated, we shall be pleased to

assist you in rectifying / updating your CIR..


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Data Security


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Data Security @ CIBIL

Information is accessed on a strictly Need to know basis.

Access control devices, surveillance cameras installed at strategiclocations.

Biometric access system at our Data Center.

Firewall, Intrusion Detection and Vulnerability Assessment System tosecure our network infrastructure from external security risk.

Anti - Virus software installed on all servers in the Data Center.

Necessary configuration and updates continuously applied on ourServers and Network appliances.


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SecurityData transmission

128-bit SSL encryption for all Web-basedtransactions including FTP.

Cryptographic solutions for all information sent or

received through any physical media i.e. CD, DATand DLT.

Security measures aligned with stringentinformation security management standards

(BS7799).


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Membership

121 credit grantors have accepted membership

75 Banks

16NBFCs

10 FIs

13 HFCs

5 SFCs 2CCCs

75 BanksOver 90% total credit outstanding amongst Commercial Banks

13 HFCsOver 80% total credit outstanding amongst HFCs

10 FIsOver 90% total credit outstanding amongst FIs

16 NBFCsSubstantial portion of the credit outstanding amongst NBFCs

5 SFCs Substantial portion of the credit outstanding amongst SFCs

2 CCCs - 100% total credit outstanding amongst Credit Card Companies


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Legal Environment - Master Legislation

Cleared by

Parliament

Presidents

Assent

Obtained

Awaiting

official

Notification

Enable Banks / FIs / SFCs to share all data without consent

Establish the regulatory framework for Credit Bureaus in India

Enunciate the rights and responsibilities of Members and Bureaus


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CONSUMERBUREAU

LAUNCHED ON

APRIL 5, 2004

C B


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Consumer Bureau

The Consumer Bureau was launched on April 5, 2004

with a database of 4 million accounts contributed by 13Members.

Subsequently, our database has grown over 48 million

accounts contributed by 48 Members.

The Consumer Bureau reports are available to Members,

who have submitted all their data to CIBIL in an

acceptable format (Principle of Reciprocity).

S St i


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CASE 1:

An individual, who had applied to one of our members for a loan ofRs. 10 lacs, was found to have 8 loans of the same type from a singlebank and one credit card outstanding, totalling approx. Rs. 14 lacs.This was revealed in the CIBIL CIR.

CASE 2:

A member recently asked a new applicant about his previous loansand the payment history of those loans. The borrower mentioned thathe had one previous loan on which he had recently delayed the

payment by a month. However the Credit Report accessed on theborrower from CIBIL reflected that payment was delayed by 8months.

Success Stories

S St i


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Success Stories

CASE 3:

One ofIndias leading newspapers reported, "Four banks had turned down a

Pune businessmans housing loan application based on his payment data.

He apparently had a history of frequent defaults on his credit card

payments".

CASE 4:

A borrower recently approached a member for a housing loan of Rs. 1

crore. During the preliminary discussion, the member asked the borrower if

he had previously taken any other loans. The borrower said that he had

never borrowed in the past. However a Credit Report accessed on the

borrower from CIBIL reflected one closed housing loan taken by the

borrower in the past from another Credit Grantor.


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Advantages of CIBIL for Banks

Independent, trusted third party opinion on capabilities & credit

worthiness of SMEs

Faster processing of SME applications for bank loans, thereby

leading to time and cost savings for each SME credit evaluation

Better credit pricing depending on borrower performance

Improved credit risk portfolios (this is especially important

given the increased focus on credit risk management and Basel

II) Increased profitability, through cost savings as well as

improved SME loan portfolios


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Commercial Bureau


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Update Commercial Bureau

Systems & Infrastructure

Commercial SystemCustomised & Installed

Data CentreCommissioned & Operational

Data on suit-filed accounts of Rs.1 Crore and aboveand suit-filed accounts (willful defaulters) of Rs.25lacs and above available on our site - www.cibil.com

L h f th C i l B


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Launch of the Commercial Bureau

Launch of operations depends on receipt of critical

mass of data

Data inflow from Credit Grantors has commenced

Launch operations in 1st quarter of the FY 2006 - 07

C i l B R t


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Commercial Bureau Report

Commercial Credit Report contains Non-Individual Borrower Information

Name and Address

D-U-N-S

Number

Other Identification numbers e.g. PAN

Legal Constitution

Relationship details e.g. major shareholders, directors etc.

and their addresses, D-U-N-S Numbers

Number of inquiries made on that borrower

C i l B R t


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Commercial Bureau Report

Commercial Credit Report contains

Account details

Number of credit facilities

Credit type

Loan amount

Outstanding amount

History of credit outstanding - short, medium and longterm

Asset classification Wilful defaulter and suit filed status

Guarantor details

Benefits of CIBIL


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Benefits of CIBIL

Provides access to better credit information by allowing credit grantors to

exchange credit information while ensuring they do not lose their

competitive advantage

Automated decisioning system leading to lower cost of credit evaluation,

consistent decisioning and greater efficiency

Assists in evaluating and monitoring repayment ability and payment

diligence

Lowers default risk by assisting credit grantors improve their credit

portfolios

Allows credit grantors to price the risk appropriately

For Credit Grantor

Benefits of CIBIL


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Provides faster access to credit

Reduces cost of borrowing for borrowers with good credit records

Reduces subjectivity in the credit assessment process

Encourages borrowers to maintain greater self discipline in

acquiring financial commitments

Allows borrowers to build reputational collateral by following

correct repayment behaviour

Benefits of CIBIL

For Borrowers

3 Key Messages


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Credit bureaus, over the medium term, benefit all marketplayers

SME Lending is an untapped engine of growth for the

Indian economy, its development will be accompanied by

the establishment of a critical risk management

infrastructure, i.e. CIBIL

CIBIL will create a win-win situation for credit grantors

and consumers

3 Key Messages

We are the CATALYST!


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THANK YOU

Suraj & Ankit_cibil Final

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