Rachel Chitra | TNN | Feb 15, 2016, 01.08 PM IST | Times of India
CHENNAI: India with more than 380 million internet users has emerged as the third-largest internet user. And nearly 60% of this user base make purchases online – a user base, whose credit history and risk profile is still unknown.
And credit rating agency CIBIL hopes to step into that gap and maintain credit scores for users of e-commerce websites just as it is currently doing for clients of India’s banks, car dealers and non-banking financial institutions. CIBIL said on Wednesday that it is in talks with the Reserve Bank of India (RBI) for bringing e-commerce customers of online payment processors like PayPal, PayTM and Citrus Pay in the loop.
The rating agency, which has been collecting and maintaining records on individual’s payments on credit cards and home, car, corporate, agricultural loans, etc, plans to now profile online customers as e-commerce picks up pace in India. Simply put, if CIBIL succeeds, then Amazon, Flipkart, Ebay and others will know the credit profile of their buyers and can plan their strategy for payment on an instalment basis and payment by cash.
CIBIL currently puts out reports based on the inputs it received from member banks and credit institutions on a monthly basis. The decision to extend its reach to e-commerce sites will bring with it challenges in terms of confidentiality of information and setting up a network with the current players in the online payment space, said Satish Pillai, CEO and MD of CIBIL.
“Thanks to the way we keep a tab on a person’s spending habits and credit history, payments and loan sanctions have become a lot faster. If you are sitting at a car dealer and waiting for the EMI amount to get clearance – real-time clearance will happen if your credit score happens to be good. So CIBIL’s credit scores make for faster risk assessment and less due diligence from the credit giver – making for faster sanctioning on loans. We are now hoping that to add additional layers of information to our existing database,” said M V Nair, chairman, CIBIL.
CIBIL also said that it is in talks with the regulator for extending this facility for customers of utility companies and telecom providers. “We are seeing a real need in this area. Say your postpaid bill with a mobile service provider has a credit limit of Rs 500 – if CIBIL scores come into play in that arena – and say your credit history is good – then it could be instantly raised to Rs 2,000 without any need for a check from the service provider. CIBIL scores would make for seamless transaction with greater ease and smoothness,” said CIBIL’s Pillai.
“The current system of sending a person to come and verify the address, customer profile and authenticity of documents will get outdated. It costs time, labour and money. With CIBIL, the utility or telecom provider would have all the information that they would need a click away,” he added.
Source : http://goo.gl/H06Kss