India Inc is building up on the credit tracking mechanism. There are 4 credit rating agencies (CRISIL, ICRA, CARE & Fitch ratings) which work with banks and credit card companies to develop your credit history. This in turn is used to determine your credit worthiness, when you are looking for more credit like a personal loan or a home loan. Until now the credit history is limited to bounced cheques, missed EMI’s and missed credit card payments.
Now, add missed telephone bill to that list. This is something prevalent in the western countries. There is something called a credit score based on which consumers credit worthiness is decided. How the hell did that sub-prime crisis happen then? That’s another story but loans were given to people who did not have a good credit history at higher interest rates. That was feeding the greed of the banks.
All the major telecom service providers in the country — BSNL, Vodafone and Airtel — are now in discussions with CIBIL for sharing of customer database. CIBIL’s Managing Director, Mr Arun Thukral, said, “We are in discussions with all the telecom service providers for sharing the database.” (Business Line)
Of close to 450 million telephone subscribers around 420 million are mobile phones. Of which 90% are pre-paid customers. That leaves us with 10% of 420 million + the landline customers. What we are talking about is some 60 – 70 million users. Is that a lot? Its not. But that is a database nevertheless.
It would be a good start for the banks as well. Now, they know who the credit worthy customer is. Which would mean we will not have a sub-prime crisis.
What if I have missed paying couple of phone bills? It would be difficult to a deny a loan to you. That would mean denying it to a lot of people. Which would put the banks out of business. What it could mean is, you might not get as much loan (18 lakhs instead of 20 lakhs) or banks would charge an higher interest rate.
On the lighter side, there will be lesser phone calls from the tele-marketers.
PS: What’s next for the credit rating? Utility bills? Rent?