RBI Circular – Customer Service by CI and CIC

The Reserve Bank of India (RBI) is set to enhance customer service and grievance redress mechanisms for Credit Institutions (CIs) and Credit Information Companies (CICs). This initiative, announced in the Statement on Developmental and Regulatory Policies on April 6, 2023, aims to bolster the efficiency and effectiveness of customer service in these financial sectors.The RBI, under the powers granted by the Credit Information Companies (Regulation) Act, 2005 (CICRA, 2005), has issued several directives to CICs and CIs. One of the key directives is the implementation of alerts through SMS and email. CICs are required to notify customers when their Credit Information Report (CIR) is accessed by specified users. Similarly, CIs must alert customers when submitting information about defaults or Days Past Due (DPD) in existing credit facilities. To facilitate this, the Uniform Credit Reporting Format has been modified, emphasizing the importance of customers submitting their mobile numbers and email IDs.Furthermore, CIs are directed to establish dedicated nodal points or officials for handling customer grievances related to CICs. These officials’ contact details must be regularly updated and communicated to CICs within five days of any changes. This measure aims to streamline the grievance redress process and ensure efficient communication.Another significant directive is the requirement for CIs to conduct Root Cause Analysis (RCA) of customer grievances at least twice a year. This analysis, which includes data from CICs such as data rejection and Data Quality Index (DQI), must be reviewed annually by the top management. This process helps identify underlying issues and improve the overall quality of data reporting.CIs are also instructed to inform customers of the reasons for rejecting data correction requests, using a standardized list provided by CICs. This transparency helps customers understand and address issues in their CIR more effectively.CICs, on their part, must periodically review the ‘Search & Match’ logic algorithm used for generating CIRs. This review, conducted at least semi-annually, aims to identify and rectify any issues in the algorithm, ensuring accurate and fair reporting. The results of this review, along with any changes, must be presented to the Board of Directors of the CIC.Additionally, CICs are required to ingest credit information data from CIs within seven days of receipt. In cases of data rejection, CICs must communicate the reasons to the respective CI within the same timeframe. CICs must also disclose details of complaints registered against them and CIs on their websites, promoting transparency and accountability.To further assist individuals, CICs are mandated to provide easy access to a Free Full Credit Report (FFCR), including the credit score, once a year. This report must be accessible via a prominently displayed link on the CIC’s homepage.These directives will take effect six months from the date of the circular, giving CICs and CIs ample time to implement the necessary systems and processes. Non-compliance with these directives will result in penal actions as per CICRA, 2005. The RBI’s proactive measures are a significant step towards strengthening customer service and ensuring the accuracy and reliability of credit information reporting.