Framework for Compensation to Customers for Delayed Updation/Rectification of Credit Information
The Reserve Bank of India (RBI) has introduced a framework to ensure compensation for customers experiencing delays in the updation or rectification of their credit information. This measure was outlined in the Bi-monthly Monetary Policy Statement for 2023-24 on April 6, 2023, and mandates credit institutions (CIs) and credit information companies (CICs) to comply with these new regulations.
According to Section 11 of the Credit Information Companies (Regulation) Act, 2005 (CICRA, 2005), the RBI directs that complainants are entitled to compensation of ₹100 per calendar day if their complaint is unresolved within 30 days from the initial filing. This framework is designed to ensure that both CIs and CICs update or rectify credit information promptly. The combined reading of Section 21(3) of CICRA, 2005, and Rule 20(3)(c) of the Credit Information Companies Rules, 2006, provides a 30-day period for resolving such complaints, allocating 21 days to CIs and the remaining nine days to CICs.
CIs must pay compensation if they fail to send updated credit information to CICs within 21 days. Similarly, CICs are responsible for compensating if they cannot resolve the complaint within the 30-day window, despite receiving updated information from the CIs on time. Complainants must be informed of the actions taken on their complaints, including rejections, with reasons provided.
In cases where multiple CIs are involved, the compensation is proportionately shared among them. If a complaint involves inaccurate credit information from several CIs, the complainant should register it with the concerned CIC, which will coordinate with all involved CIs for a comprehensive resolution. Delays and compensation details are to be communicated to the complainant and the involved parties after the final resolution.
The date of resolution is when the rectified Credit Information Report (CIR) is sent to the complainant’s provided postal address or email ID. Complainants must submit accurate contact details to facilitate compensation payments, which will be credited to their bank accounts within five working days of complaint resolution.
In case of wrongful denial of compensation, complainants can approach the RBI Ombudsman or the Consumer Education and Protection Cell (CEPC), depending on the CIs’ coverage under the RBI’s Integrated Ombudsman Scheme. The framework excludes certain non-maintainable complaints, such as those relating to internal administration or already pending in other forums like courts or consumer commissions.
This compensation framework, effective six months from the circular’s date, mandates that CICs and CIs implement the necessary systems and processes. Non-compliance will result in penal action as per CICRA, 2005. This initiative underscores the RBI’s commitment to protecting consumers’ interests and ensuring the timely and accurate maintenance of credit information.
Access the full RBI circular here
