India's central bank, Reserve Bank of India has allowed foreign direct investment of up to 49% in credit information companies (CICs). "The Reserve Bank will now consider allowing 49 per cent FDI in companies with an established credit information bureau in a well regulated environment," said RBI.

The apex body added that a higher FDI would be permitted to foreign company that has restricted to the voting rights to 10% of the total share capital of the company even if the shareholding of the entity is above 10%. An RBI release said, "No shareholder in the investor company holds more than 10% voting rights in that company. Such a company should preferably be a listed company at a recognized stock exchange."

Earlier in July 2008, RBI had made it clear that it would not allow any investor, whether an Indian or non-Indian, to hold more than 10% of the equity capital of any CIC. Now the limit has been put even on investments made under FDI schemes. The ceiling has put to ensure differentiated ownership between banks and other entities of the financial sector.

Credit information companies keep a record of defaults and frauds that help banks to analyze the risk profile of individuals before extending the credit.

Currently there is only one credit information company in India named Credit Information Bureau India (Cibil). The company started with stakes shared between SBI, HDFC, Dun & Bradstreet Information Services India and Trans Union International in the ratio of 40:40:10:10 respectively. However the Indian partners share has now declined to a maximum of 10% and there are 14 new parties that have joined the venture. These parties include of banks and NBFCs with ranging between 2.5% and 10%.

After the change, State Bank of India, ICICI Bank and HDFC, each hold 10% stakes in the company, while two NBFCs - Sundaram Finance and GE Strategic Investment India hold 2.5% and Citi Finance (India) holds 5% stakes in the firm. Some of the other members include public sector and foreign banks.

Currently Cibil maintains a database of 85 million individuals and as more banks share their data it intends to expand this number to around 150-200 million.