Personal Finance

RBI’s New Norms: Credit Bureaus to Pay Fine for Delayed Updation of Report

The Reserve Bank of India (RBI) has come up with new regulations that mandate Credit Institutions (CIs) and Credit Information Companies (CICs) to pay customers Rs 100 per day in cases where they fail to resolve complaints within a timeframe of 30 days.

CICs or credit bureaus such as Credit Information Bureau (India) Ltd (CIBIL), CRIF Highmark, Equifax, and Experian collate credit data from various lending institutions to formulate credit reports that help in evaluating the creditworthiness of people or businesses.

 If any errors or discrepancies are found in these reports, then it can significantly influence a person’s borrowing capability and cost of credit. It is for this reason that there is a need to ensure swift and effective resolution of complaints lodged with respect to such discrepancies.

According to the RBI, a CI is liable to pay compensation to the complainant in case the CI has failed to send updated credit information to the CICs by making the requisite correction or addition or otherwise in a timeframe of 21 days of being informed by the complainant or a CIC.  

The CI or CIC shall advise the complainant of the action initiated on the complaint in all cases; this includes the cases where the complaint has been rejected. Also, in cases where there is rejection, CIC and CIC will be required to provide appropriate reasons for the same.  

In cases where the grievance or complaint is related to inaccurate credit information provided by more than one CI, the complaint shall be registered by the individual with the concerned CIC. 

Furthermore, the CIC shall coordinate with all the CIs concerned and furnish the complainant with a comprehensive resolution in this regard.  

An individual also has the option of reaching out to the RBI Ombudsman, under the Reserve Bank-Integrated Ombudsman Scheme, 2021, in case of unjustified denial of compensation by CIs or CICs.

The new rules introduce increased transparency and accountability for CIs and CICs while favouring consumers in addressing their complaints or grievances in a more systematic and timebound manner. 

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