This Reserve Bank of India (RBI) directive, dated May 19, 2016, outlines regulations concerning investments in Credit Information Companies (CICs). Superseding the previous direction from November 29, 2013, this policy stipulates that direct or indirect investments by any person in a CIC shall not exceed ten percent of the equity capital of the investee company.
The RBI may consider higher Foreign Direct Investment (FDI) limits for entities with a proven history of operating a Credit Information Bureau in a well-regulated environment: up to 49% if the ownership is not well-diversified (i.e., one or more shareholders hold more than 10% of voting rights), and up to 100% if the ownership is well-diversified. If the ownership is not well diversified, at least 50% of the directors of the investee CIC in India should be Indian nationals/Non-Resident Indians/Persons of Indian Origin, provided one-third of the directors are Indian nationals resident in India. Preference is given to investor companies listed on a recognized stock exchange.
Foreign Institutional Investor/Foreign Portfolio Investor (FII/FPI) investment is permitted with the conditions that a single entity directly or indirectly holds less than 10% equity, any acquisition exceeding 1% must be reported to the RBI, and FIIs/FPIs shall not seek board representation based on their shareholding.
If the investor in a CIC in India is a wholly-owned subsidiary of an investment holding company, the conditions outlined in points 2 and 3 will apply to the operating group company involved in the credit information business and providing technical know-how to the CIC in India.
The Department of Banking Regulation, Central Office of the RBI can be contacted at S. Bhagat Singh Marg, Mumbai 400 001, Tel.No.:912222601000,Tel.No.D:912222701297, Fax No. 912222701239, email ID: cgmicdbrrbi.org.in
The Executive Director who signed off on this policy is N.S. Vishwanathan.
Key Entities Referenced
Credit Information Companies Regulation Act, 2005: An Indian law that governs the regulation of Credit Information Companies (CICs).
Credit Information Companies (CICs): Entities that collect and maintain credit information of individuals and businesses.
Reserve Bank of India (RBI): The central bank of India, responsible for regulating the banking sector and monetary policy.
Foreign Direct Investment (FDI): An investment made by a firm or individual in one country into business interests located in another country.
Non-Resident Indians (NRIs): Citizens of India who are residing outside of India.
Persons of Indian Origin (PIOs): People who are not citizens of India but whose ancestors were Indian citizens.
Foreign Institutional Investors/Foreign Portfolio Investors (FIIs/FPIs): Investors or investment funds investing in a country from outside of it.
Mumbai, Maharashtra: A city in India, the location of the Central Office of the Department of Banking Regulation of the Reserve Bank of India.
www.rbi.org.in
RBI/2015-16/400
DBR.CID.BC.No.98/20.16.042/2015-16 May 19, 2016
All Credit Information Companies
Investment in Credit Information Companies
In exercise of the powers conferred by sub-section (1) of Section 11 of Credit
Information Companies (Regulation) Act, 2005, and in supersession of its direction
on Investment in Credit Information Companies (CICs) dated November 29, 2013,
Reserve Bank of India, being satisfied that it is necessary and expedient in the public
interest to do so, hereby directs that investments directly or indirectly by any person,
whether resident or otherwise, in a CIC, shall not exceed ten percent of the equity
capital of the investee company.
2. Notwithstanding the above, the Reserve Bank may consider allowing higher FDI
limits as under to entities which have an established track record of running a Credit
Information Bureau in a well regulated environment:
a. up to 49% if their ownership is not well diversified (i.e., one or more
shareholders each hold more than 10% of voting rights in the company)
b. up to 100% if their ownership is well diversified
or
If their ownership is not well diversified, at least 50% of the directors of the
investee CIC in India are Indian nationals/ Non-Resident Indians/ Persons of
Indian Origin subject to the condition that one third of the directors are Indian
nationals resident in India.
c. The investor company should preferably be a listed company on a recognised
stock exchange.
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ब��कंग �व�नयमन �वभाग, केन्द्र�य कायार्लय, 13वी मंजील, केन्द्र�य कायार्लय भवन, श. भगत �सगं माग,र् मुंबई - 400 001
Department of Banking Regulation, Central Office, 13th Floor, Central Office Building, S. Bhagat Singh Marg, Mumbai - 400 001
टे�लफोन/Tel.No.:91-22-22601000,टे�लफोन/Tel.No.(D):91-22-22701297, फैक्स/Fax No. 91-22-22701239, email ID: cgmicdbr@rbi.org.in
�हन्द� आसान है, इसका प्रयोग बढाइये
Caution: RBI never sends mails, SMSs or makes calls asking for personal information like bank account details,
passwords, etc. It never keeps or offers funds to anyone. Please do not respond in any manner to such offers.2
3. FII/FPI investment would be permitted subject to the conditions that:
a. A single entity should directly or indirectly hold below 10% equity;
b. Any acquisition in excess of 1% will have to be reported to RBI as a
mandatory requirement;
c. FIIs/FPIs investing in CICs shall not seek a representation on the Board of
Directors based upon their shareholding.
4. In case the investor in a Credit Information Company in India is a wholly
owned subsidiary (directly or indirectly) of an investment holding company, the
conditions as at (2) and (3) above will be applied to the operating group company
that is engaged in credit information business and has undertaken to provide
technical know-how to the Credit Information Company in India.
(N.S. Vishwanathan)
Executive Director