Introducing a framework of compensation mechanism
for delayed updation or rectification of credit information by the credit institutions (CIs) and credit information companies (CICs), Reserve Bank of India (RBI) has asked them to resolve complaints filed by customers within 30 calendar days or pay a fine of Rs100 per day after that.
RBI says, "A CI shall pay compensation to the complainant if the CI has failed to send updated credit information to the CICs by making an appropriate correction or addition or otherwise within 21 calendar days of being informed by the complainant or a CIC. A CIC shall pay compensation to the complainant if the CIC has failed to resolve the complaint within 30 calendar days of being informed by the complainant or a CI, despite the CI having furnished the updated credit information to the CIC within 21 calendar days of being informed by the complainant or the CIC."
"The complainant shall be advised by the CI or CIC of the action taken on the complaint in all cases, including the cases where the complaint has been rejected. In cases of rejection, the reasons for rejection shall also be provided by CI and CIC. Compensation to be provided by the CICs or CIs to the complainant (for delayed resolution beyond 30 calendar days of filing the complaint) shall be apportioned among the CIs or CICs concerned proportionately," it added.
Where the grievance or complaint involves inaccurate credit information provided by more than one CI, RBI says, the complaint will be registered by the complainant with the concerned CIC, which will coordinate with all the CIs concerned and furnish the complainant with a comprehensive resolution of the grievance.
Where the complaint has been received and registered by a CI or CIC, and there has been a delay in the resolution of the complaint, the CI or CIC, as the case is, will inform the concerned CIs or CICs and the complainant after the final resolution, regarding the total delay in calendar days and the amount of compensation to be paid by the CIs and/ or the CIC, it added.
Directing CICs and CIs to put in place necessary systems and processes to implement the compensation framework, RBI says it will come into effect in the next six months.
Earlier in June this year, RBI imposed a total penalty of Rs1.01 crore on all four credit information companies (CICs) for inaccurate and incomplete data and not updating credit information within 30 days after receiving complaints from borrowers.
TransUnion CIBIL Ltd is asked to pay a penalty of Rs26 lakh, while Experian Credit Information Company of India Pvt Ltd (Experian India) and Equifax Credit Information Services Pvt Ltd have to pay a fine of Rs24.75 lakh each. RBI imposed a penalty of Rs25.75 lakh on CRIF High Mark Credit Information Services Pvt Ltd.
In March 2022, the Union government told the Rajya Sabha that CICs or credit bureaus are mandated to share corrected particulars with the specified user or individual within 30 days.
In a written reply, minister of state for finance Dr Bhagwat Karad says, "As per the rules framed under the CIC (Regulation) Act, if a CIC discovers of its own or is informed about any inaccuracy, error or discrepancy in respect of the credit information maintained by it, the CIC is required to send the intimation of the same within seven days to the specified user or individual; to take immediate steps to correct the same and to forward the corrected particulars to the specified user or individual within 30 days from the date when the same was discovered by or reported to the CIC." (Read: Credit Bureaus Mandated To Rectify Inaccuracy, Error or Discrepancy in 30 Days: Govt