Oriental Bank of Commerce (OBC) has entered into a tie-up with Experian Credit Information Company of India (Experian India) for credit information services from the latter.
This tie-up will enable OBC get an additional platform for verification of the credit history of customers as a decision-support tool in credit risk management.
A memorandum of understanding (MOU) was signed on Thursday by Mr V. R. Iyer, General Manager of OBC, and Mr Phil Nolan, Managing Director, Experian India, in the presence of Mr Nagesh Pydah, Chairman and Managing Director of OBC. Both the executive directors of the bank, Mr S. C. Sinha and Mr V. Kannan, were present on the occasion.
OBC is already availing itself of credit information services from two credit information companies — CIBIL and Equifax.
Challenges, opportunities
Speaking on the occasion, Mr Pydah said that Indian market will pose a lot of challenges for credit bureaus such as Experian. But along with the challenges comes lot of opportunities, as there is enormous disposable income in the hands of the burgeoning middle-class.
“You can start off with products ahead of what the competition already offers. You will have an advantage in providing the most contemporary credit report. Experian will certainly have lot of experiential inputs from OBC”, Mr Pydah said.
OBC will make use of Experian's services for the retail customers (individuals) space to start with. “As it (Experian) scales up and starts giving corporate credit reports, we will certainly look at such reports. Ultimately, as a credit bureau, it would certainly have corporate information that other agencies/credit bureaus may not have”, Mr Pydah said.
‘Strategic market'
Mr Nolan said that Experian sees India as a “very strategic market” for its services. The Dublin headquartered Experian is world's largest credit bureau operator with offices in 40 countries.
Experian, which got its licence from the Reserve Bank of India in February 2010, will work with OBC on a transaction-based revenue model (pay for each credit report used), Mr Nolan said.
On how Experian differentiate its services offering as compared to other credit bureaus, Mr Nolan told Business Line that a distinguishing factor is on the approach to data and the quality of data that is loaded.
“We are accepting 95 per cent of all data that banks give us. We are not rejecting that much data as existing bureaus do. When people are looking at an individual credit history, they may find additional data with us which could help influence the decision. We have also laid the report in such a way that it is much easier to interpret and also for consumers to understand”, Mr Nolan said.
Mr Pydah later said that CIBIL will be the anchor credit bureau for OBC and that the tie-ups with others such as Equifax and Experian will only expand the menu of credit information options available to the bank.