Mumbai: The Reserve Bank of India (RBI) has introduced a comprehensive framework for addressing issues related to credit history discrepancies, aiming to protect the interests of consumers and strengthen customer service within the financial sector.
In a significant move, RBI has mandated that credit institutions, often referred to as lenders, and credit information companies (CICs) must now provide compensation to customers for delays in updating or rectifying credit information. These delays can often lead to lower credit scores and increased borrowing costs for affected individuals.
According to the new RBI guidelines, a compensation of '100 per calendar day will be awarded to customers if their complaint concerning incorrect credit data is not resolved within 30 calendar days from the date of the initial complaint filing. This rule applies if the customer has not received a proper resolution from their bank or the credit bureau.
If a credit institution fails to send updated credit information to the CICs, with appropriate corrections or additions, within 21 calendar days of being informed by the complainant or a CIC, they are liable to pay compensation. Similarly, CICs are required to pay compensation if they fail to resolve a complaint within 30 calendar days, despite the credit institution furnishing updated credit information to the CIC within the 21-day period.
The circular emphasised that customers must be informed about the action taken on their complaint, including reasons for rejection, if any, should be provided.
Compensation for delayed resolutions beyond 30 calendar days will be apportioned among the relevant credit institutions or CICs proportionately.
In cases involving inaccurate credit information provided by multiple credit institutions, complainants are instructed to register their grievance with the relevant CIC, which will coordinate with all to provide a comprehensive resolution.
The framework will become effective six months from the date of this circular.
RBI, in another circular, further asked CICs to provide a free and full credit report including credit score once in a year to individuals whose credit history is available with the CIC.
