The country's largest lender State Bank of India (SBI) is investing an undisclosed amount in credit bureau Equifax Credit Information Services (ECIS), as per a stock market disclosure.
The firm did not disclose the percentage of the stake, too. But it can be up to 10 per cent stake as per the norms laid by the Credit Information Companies (Regulation) Act, 2005. According to the Act, no institution can buy more than 10 per cent stake in a credit bureau.
"This endeavour gives SBI interest in the bureau as well as a membership in its board," the company said in the release.
“Our new-found relationship with SBI will bolster the already strong reputation and credibility of ECIS in the India marketplace. Together, we can tactically decide how to design products as well as better serve our customers with an inside knowledge and understanding of how to cater to their needs and operations. We are excited about this opportunity, and look forward to a long-standing partnership with SBI,” said Shahid Charania, chairman of ECIS.
“The investment we are making in ECIS will be mutually beneficial for both parties as well as for all lenders—and ultimately consumers—in India. By providing resources and support to its bureau, we will be able to help lenders better manage risk and therefore give more consumers access to loans and good credit,” said A Krishna Kumar, MD and group executive (national banking), SBI.
Mumbai-headquartered ECIS was founded in 2008 and operates as a subsidiary of US-based Equifax Inc. The firm provides credit information as well as analytic and risk management solutions. It offers commercial, consumer and personal information solutions as well as workforce solutions to the customers. The firm has branch offices in Bangalore and Delhi.
It is a joint venture between Equifax Inc and seven domestic financial institutions. Currently, it has 200 registered members, according to its site.
ECIS has partnerships with other banks and FIs, including Bank of Baroda, Union Bank of India, Bank of India, Kotak Mahindra Prime, Religare Finvest and Sundaram Finance.
Last Wednesday, the government committed to invest Rs 14,000 crore in public sector banks; out of this, SBI will be getting Rs 2,000 crore.
(Edited by Joby Puthuparampil Johnson)