Banks are seeking for new credit bureaus in the country. Responding to this the RBI has generated fresh licenses for credit bureaus in the country. With new players entering into the market, they are trying new ways to attract banks to them.

Credit bureaus are data collection units. They collect data about the borrowers from banks and maintain a credit profile of the borrowers which they provide to the member banks. This helps the member banks and financial services companies in assessing the credit worthiness of the customer before they lend to him again.

Credit worthiness refers to the ability of the borrower to repay the loan. It is decided on the basis of a number of factors like the previous repayment history of the customer, his income level, past defaults on loans and credit card bills etc.

Banks say that they would definitely switch to another credit bureau if it is offering them a broad and fresh arena of information.

Till now the credit bureau industry has had only one player named Credit Information Bureau India Ltd (Cibil). It has over 147 member banks under its umbrella.

Experian Credit Information Company that is a subsidiary of Experian Plc has recently got license to run a credit bureau in India. Others such as High Mark Credit Information Services and Equifax are awaiting the green signal. The approval to these agencies is granted by the RBI.

The new information that these bureaus are focusing on as baits to attract more banks to them are data on people who are not a part of the formal banking channel, detailed analytical report on these data etc.

CS Jain, head of personal banking at IDBI Bank said, "Two bureaus have approached us recently. One of them had a very interesting offering and we have asked them to have a detailed presentation on the same."

"We would like to have more data on the financial inclusion front, where people who have not had loans in the past, because they will now be the biggest lot of potential customers for banks going ahead. We will go for an additional bureau only if it doesn't cover the same database," he said.

"Multiple bureaus will benefit lenders because if two different bureaus each have details on lender A and lender B then a bank subscribing to just one bureau wouldn't be able to see data of the other bank," said Phil Nolan, managing director, Experian Credit Information Company.

The company is offering a new service to banks in which the banks can collect data about customers from different sheet which would be available to them in a compiled form wherein they can thus compare the reports of various bureaus and then decide whether to lend to a customer or not.

Banks prefer competition as it would bring them better quality services at affordable rates.