Credit Information Analytics- Evolution and Benefits

1. Credit Information Analytics- Evolution and Benefits Arun Thukral Managing Director

2. Evolution of India’s first credit bureau CIBIL provides world class solutions and has become the risk management partner for all lending institutions in India Accelerates solution offerings Advanced Analytical tools Commercial Database • First central repository on Fraud and Mortgage • Direct Consumer Access • CIBIL Detect • CIBIL Mortgage Check CIBIL is the leading CIC in India • CIBIL TransUnion Score • Personal Loan Score • Bureau Credit Characteristics • CIBIL Custom Solutions First and only credit bureau • 0.6 million commercial records • Consumer Portfolio review reports • 4 million consumer records CIBIL is Established 2005 2009 2004 2007 2012

3. Expanding CIBIL Membership CIBIL strengthened its membership to 903 members Including 373 NBFCs, 307 Cooperative Banks & 40 Rural Banks

4. Consumer Database Snapshot Vast database consisting of nearly 261 million records

5. Commercial Database Snapshot Strong database consisting over 12.5 million records

6. Electronic format PDF format Bureau usage Credit decisioning • Loan Application • Short-Term • Mid-Term • Long-Term CIBIL Individual Entity Check SME Customer Enquiry – Web / Bulk Business Entity Check Bank Fraud Check Property Check Credit Managers Output

7. CIBIL provides tools to enable smarter, more strategic decisions at every stage of the credit lifecycle Account Acquisition Portfolio Management Collections / Recovery • Verification? • Accept / reject? • Tier pricing? • Initial credit line? • Credit line? • Authorize? • Pricing? • Customer service levels? • Market intelligence? • Collection Prioritization? • Effective contact? • Treatment Strategies? • Outsourcing? • Resource Allocation? KEY ISSUES • Credit Information Reports • Bureau Scores • Fraud Prevention tools • Bureau Characteristics • Custom Behavior Scores • Segmentation Analysis • Benchmarking • Decision Trees • Stress Testing • Contact information • Bureau Characteristics • Segmentation Analysis • Optimization Strategies CIBIL TU TOOLS Credit-bureau based tools – generic scores, characteristics,. – are indispensible for effective decision management in consumer credit 7

8. CIBIL Mortgage Check

9. Transfer data files Potential “HITS” Rank ordered • ______ • ______ • ______ Electronic format PDF format CIBIL Mortgage Check Output reports Search property address Data validation and loading Institutions • Submission of mortgage loan accounts with property information • Access based on “Principle of Reciprocity” • Search Parameters: Property Address • Supports csv input and output reports. Available online (web) and through bulk modes • Output response: Mortgage Information Report to give all account & mortgage details related to the Property 9 million records

10. CIBIL Mortgage Report Features the following information: Property information Address Property Area (Sq ft) Survey number Type of Security (Prime/ Collateral) Summary of present & past mortgages • Member Name Account number • Account Open date Account Close date Reporting date • Charge/ Mortgage creation date Charge/ Mortgage release date • Loan Value Market Valuation Agreement Value • Mortgage details • Charge Type of product • Encumbrances Documents submitted Place of mortgage Borrower information on each mortgage Name Date of birth Gender Telephone(s) Address Identification number(s) – PAN, Passport no., Voter ID, Driving License No Enquiry log Enquiring Member Applicant name Date Enquiry purpose

11. Credit Activity Trends

12. THE GROWTH IN CREDIT Is it different this time around? NEW ACCOUNTS BOOKED BY QUARTER 2006 to 2012 UNSECURED LOAN DRIVEN GROWTH GROWTH IN UNSECURED LENDING SECURED LOAN DOMINATE WITH TIGHT CREDIT CONTROLS 2006 2012 2010 2008

13. THE GROWTH IN CREDIT Has it resulted in higher credit penetration? SHARE OF NEW TO CREDIT BORROWERS 2006 to 2012 2006 2008 2012 2010

14. THE GROWTH IN CREDIT What loans are credit active customer taking? SHARE OF CREDIT ACTIVE BORROWERS 2006 to 2012 2006 2010 2012 2008

15. Credit Activity(Rev) Significant shift towards secured products over time

16. CIBIL TransUnion Score Trend for Home Loans Score Trend of New Loan Accounts Opened Based on the current lender usage pattern a CIBIL TransUnion Score of 700 or more can be considered a “good” Score

17. CIBIL Advantage- Members • Faster processing of applications for loans, thereby leading to time and cost savings for each credit evaluation • Better credit pricing depending on borrower performance, to adjust interest rate to compensate for escalating risk • Credit grantors are now much better positioned to implement effective portfolio management strategies The Bottom line: Increased profitability, through cost savings as well as improved loan portfolios

18. CIBIL Advantage- Consumers • Expedites the credit approval process • Reduces subjectivity in the credit assessment process • Encourages consumers to maintain greater self discipline in acquiring financial commitments • Allows consumers to build reputational collateral by following correct repayment behavior • Provides the consumer with an opportunity to improve their standard of living through easier access to credit

19. Thank You