Axis, PNB, 5 others buy 51% stake in UK's Experian

MUMBAI: Five domestic commercial banks and two finance companies have acquired 51% stake in the Indian venture of Experian UK — Experian Credit Information Company (ECIC).

The participating banks are Axis Bank, Union Bank of India, Punjab National Bank, Federal Bank and Indian Bank while the two finance companies are Sundaram Finance and Magma Fincorp. Experian will hold the remaining 49%.
Axis Bank and Union Bank will hold 10% each while PNB, Sundaram and Magma Fincorp will hold 7% each. Federal Bank and Indian Bank will hold 5% each in ECIC, which is the latest entrant into the business.

ECIC has received provisional licence from RBI to start credit information bureau and will have a paid up capital of Rs 64 crore. Besides ECIC, Experian UK will float another company — Experian Services, which will be wholly owned subsidiary.

“Experian Credit Information will undertake activities like data warehousing and providing it to banks on request. While Experian Service will provide add-on services such as credit scoring, fraud prevention, simplifying historic data for banks,” said Vikram Narayan, managing director and country manager of Experian India.

Richard Fiddis, managing director-strategic markets at Experian, indicated that globally add-on service generates more revenue than the basic credit information bureau. “We will mainly focus on retail consumers and small- to medium-size companies. As for big companies, we will provide company reports,” said Mr Fiddis.

Credit information companies play an important role in preventing fraud as they do warehousing of data collected from member banks and banks can verify borrowers’ track record from these credit information companies on request. At present, Credit Information Bureau of India is the only operating credit information company.

RBI has given provisional licences to three companies.

This includes Experian, Equifax — a JV between UK-based Equifax, Crisil and Tata Capital and Highmark Credit Information Company, floated by individuals.

“Experian will provide value-added services to gain market share. It will help banks to simplify customer historic data. It will provide various scoring models that will not only help in preventing frauds, but also enable them to acquire new customers and sell new products to existing customers,” said TS Narayanasamy, chairman of Experian Credit Information Company.

Experian operates in 15 countries including the US, the UK, Brazil and Russia.