RBI informs customers to be compensated for late credit information updates
RBI directs lenders to disclose all loan fees upfront to customers
By: Pune Pulse
October 29, 2023
Pune: The introduction of a compensation framework by the Reserve Bank of India (RBI) on October 26 aims to prioritize the welfare and entitlements of customers who encounter delays in the rectification or updation of their credit information. The framework, which adheres to the Credit Information Companies (Regulation) Act, 2005 (CICRA, 2005), offers a means for consumers to seek compensation for any inconvenience caused by credit information companies (CICs) and credit institutions (CIs).
If a consumer’s complaint remains unresolved for more than 30 calendar days from the date of filing, the framework provides for compensating the consumer. In order to incentivize Consumer Information Centers (CICs) and Consumer Information (CIs) to expedite the resolution of consumer grievances, a compensation of ₹100 per calendar day is granted to the consumer. This compensation serves as an incentive for prompt resolution of complaints.
The resolution of complaints is governed by clear and specific timelines established by the framework. In case a CI fails to update credit information within 21 calendar days of being informed by the consumer or a CIC, the complainant must be compensated. Similarly, if a CIC fails to resolve a complaint within 30 calendar days after being informed by the complainant or a CI, the consumer must be compensated, regardless of whether the CI has furnished the updated credit information within 21 calendar days. These timelines guarantee that consumers do not have to wait indefinitely for the correction of inaccuracies in their credit information.
Consumers are entitled to receive information regarding the status of their complaints, even if their complaints are rejected, as stated by the RBI. This guarantees that consumers are not kept unaware of the reasons behind the rejection of their complaints. Furthermore, the framework promotes collaboration between CICs and CIs to ensure that consumers’ grievances are fully addressed. In situations where the complaint involves incorrect credit information from multiple CIs, the complaint should be lodged with the relevant CIC. The CIC will then coordinate with all the CIs involved to offer the consumer a unified resolution.
The disbursement of compensation is governed by a well-defined procedure under the compensation framework. Consumers can anticipate receiving their compensation within five working days of the complaint’s resolution. If consumers feel that they have been unfairly denied compensation, they can seek recourse through the RBI Ombudsman under the Reserve Bank – Integrated Ombudsman Scheme, 2021. The framework is intended to address fundamental credit information-related concerns and does not extend to internal administration, human resources, pay, and emoluments of staff, or disputes regarding the calculation of credit scores.
