Customers will get compensation of Rs.100 per Day if there is delay in updation of Credit Report

The Reserve Bank of India (RBI) has introduced new measures to tackle delays in updating credit information by Credit Information Companies (CICs) and Credit Institutions (CIs) like banks and Non-Banking Financial Companies (NBFCs). The RBI mandates that customers should receive compensation of ₹100 per calendar day if their complaints regarding credit data are not resolved within 30 calendar days from the date of filing.

Compensation for Delayed Updates

The RBI has directed that:

• Credit Institutions (CIs) must resolve complaints and update credit data with CICs within 21 calendar days of being informed.
• If CIs fail to meet this timeline, they must compensate customers at ₹100 per day.
• Credit Information Companies (CICs) must resolve complaints within 30 calendar days of receiving updated information from CIs. If they fail, they too must compensate the customer at the same rate.

These provisions are part of the RBI’s Master Direction on Credit Information Reporting aimed at improving transparency and accountability in credit data management.

Alerts for Customers

To enhance customer awareness, the RBI has instructed CICs and CIs to send alerts via SMS or email:

• CICs must notify customers whenever their credit report is accessed by banks or NBFCs.
• CIs must inform customers when they submit default-related information to CICs.

These alerts are mandatory wherever customer contact details are available.

Addressing Data Errors and Bias

The RBI noted that delays in correcting inaccurate credit information have been a major concern for customers. Many complaints revolve around errors in credit reports caused by incorrect data from banks, which CICs often fail to verify independently. This has resulted in undue hardships, such as incorrect default listings.

Banks and NBFCs must now provide clear reasons for rejecting data correction requests. CICs will circulate a standardized list of rejection reasons to ensure consistency.

Formation of Technical Working Group

To ensure continuous improvement in credit reporting, the RBI has proposed the formation of a Technical Working Group (TWG). The group will:

• Review and update data reporting formats annually.
• Frame rules for data fields across various segments, including consumer, commercial, and microfinance.
• Submit recommendations to the RBI for approval.

Authorized Credit Information Companies

Currently, the RBI has authorized four CICs to operate in India:

1. TransUnion CIBIL
2. CRIF High Mark
3. Equifax
4. Experian

Strengthening Customer Grievance Redressal

The RBI has emphasized that both CICs and CIs must inform customers of actions taken on complaints, including rejections. In case of rejection, clear reasons must be provided to help customers understand the issues with their credit information reports.

Conclusion

These measures aim to address systemic issues in credit data reporting and ensure that customers are not unfairly penalized due to delays or errors. By introducing compensation for delays and mandating transparency, the RBI seeks to restore trust in the credit reporting system.