Credit bureau Cibil database to help banks prevent frauds

08 Jul 2010

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Fraudsters hoping to rip off banks will have to be more careful in future. Banks and financial institutions can now access and share information on high-risk activities, thanks to Cibil Detect – a nationwide database of reported fraudulent and suspect activities.

This centralised repository on confirmed frauds, cases of misuse or attempted misuse of data and suspected or high-risk cases that are under investigation in banks and financial institutions has been created by Credit Information Bureau (India) Ltd and TransUnion with the support from the Indian Banks Association.

This database will serve as due diligence tool for banks before establishing business relationship with new customers, Arun Thukral, managing director of Cibil, the country's first credit information bureau, said at the launch of CIBIL Detect in Mumbai on Tuesday.

In addition to reported fraudulent and suspicious activities, the proposed database will also incorporate valuable information on high-risk vendors and agents which credit grantors can share and access. "This repository will be a comprehensive, reliable, up-to-date, centralised point of reference on the high-risk incidents in the credit sector for India. It will also keep a track of the modus operandi of individuals who have committed banking-related frauds in the past," Cibil said.

The solution actively addresses an industry concern at a time when lending institutions are facing increases in write-offs and bad debt, many of which can be attributed to fraudulent activities. Cibil Direct also contains information on high risk vendors and agents which institutions (credit grantors) can share and access.

On the pricing of Cibil Detect, Thukral said that it has been decided to adopt a subscription pricing model for this product. Banks will be required to pay a flat annual fee for making enquiries about fraudulent or suspected activities. Simply put, the unit cost for every bank would depend on the number of enquiries made during a year.

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