{"id":79434,"date":"2023-10-30T16:04:27","date_gmt":"2023-10-30T10:34:27","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?post_type=rbi&p=79434"},"modified":"2023-10-30T16:04:29","modified_gmt":"2023-10-30T10:34:29","slug":"rbi-unveils-framework-for-updating-credit-information","status":"publish","type":"rbi","link":"https:\/\/enterslice.com\/learning\/rbi\/notification\/rbi-unveils-framework-for-updating-credit-information\/","title":{"rendered":"RBI unveils framework for updating credit information, customers to get \u20b9100\/day in case of delay"},"content":{"rendered":"

The Reserve Bank of India (RBI) has once again stepped into the spotlight, this time focusing on an area often mired in customer grievances and opaque processes: the updation and rectification of credit information. In its notification RBI\/2023-24\/72 dated October 26, 2023, the central bank lays down a groundbreaking framework compelling Credit Information Companies (CICs) and other Credit Institutions (CIs) to compensate customers for delays in updating or rectifying credit information. This move, both bold and consumer-centric, could significantly alter the dynamics of the credit information landscape in India.<\/p>\n\n\n\n

Section<\/th>Description<\/th><\/tr><\/thead>
Reference Number<\/strong><\/td>RBI\/2023-24\/72, DoR.FIN.REC.48\/20.16.003\/2023-24<\/td><\/tr>
Date<\/strong><\/td>October 26, 2023<\/td><\/tr>
Applicable To<\/strong><\/td>Commercial Banks, Co-operative Banks, NBFCs, All-India Financial Institutions, Asset Reconstruction Companies, Credit Information Companies<\/td><\/tr>
Compensation Framework<\/strong><\/td>₹100\/day for delays beyond 30 calendar days in updating\/rectifying credit information<\/td><\/tr>
Responsibility Timeframe<\/strong><\/td>CI: 21 days to update info; CIC: Additional 9 days for resolution<\/td><\/tr>
Payment Process<\/strong><\/td>– CI pays if it fails to update within 21 days<br>- CIC pays if it fails to resolve within 30 days<\/td><\/tr>
Notification Requirement<\/strong><\/td>CI\/CIC must advise complainant of action taken, including reasons for rejection<\/td><\/tr>
Apportionment of Compensation<\/strong><\/td>Proportional among CIs\/CICs involved<\/td><\/tr>
Registration & Coordination<\/strong><\/td>For complaints involving multiple CIs, to be registered with a CIC which coordinates resolution<\/td><\/tr>
Information to Complainant<\/strong><\/td>Post-resolution, CIs\/CICs must inform complainant of total delay and compensation amount<\/td><\/tr>
Resolution Date<\/strong><\/td>Date when rectified CIR is sent to complainant<\/td><\/tr>
Complaint Submission<\/strong><\/td>CICs\/CIs to enable submission of contact, email, and bank\/UPI details for compensation<\/td><\/tr>
Compensation Credit Timeline<\/strong><\/td>Within 5 working days of complaint resolution<\/td><\/tr>
Redressal for Denial of Compensation<\/strong><\/td>– RBI Ombudsman Scheme for CIs\/CICs<br>- CEPC at RBI ROs for CIs not covered under the Scheme<\/td><\/tr>
Non-Maintainability Cases<\/strong><\/td>– Disputes under Section 18 of CICRA, 2005<br>- Internal, HR, pay, emoluments issues<br>- Disputes on credit score computation<br>- Complaints already in other legal fora<\/td><\/tr>
Implementation Deadline<\/strong><\/td>6 months from date of circular<\/td><\/tr>
Penal Action for Non-Adherence<\/strong><\/td>As per provisions of CICRA, 2005<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Analyzing the Directive<\/h2>\n\n\n\n

At its core, the directive mandates a compensation of ₹100 per calendar day to complainants if their credit information-related grievances are not resolved within 30 days. This structure of accountability introduces a financial disincentive for delays, ostensibly compelling CIs and CICs to hasten their processes and focus more diligently on accuracy and efficiency.<\/p>\n\n\n\n

The Significance<\/h2>\n\n\n\n
    \n
  1. Consumer Empowerment<\/strong>: This directive robustly advocates for consumer rights, ensuring they are not just passive subjects in the credit reporting ecosystem but have definitive mechanisms to seek redressal.<\/li>\n\n\n\n
  2. Operational Efficiency<\/strong>: By financially penalizing delays, RBI indirectly urges CIs and CICs to revamp their internal processes, potentially leading to more investments in technology and training for quicker dispute resolution.<\/li>\n\n\n\n
  3. Transparency and Accountability<\/strong>: The framework fosters transparency and compels CICs and CIs to maintain higher standards of accountability. Each entity must not only correct mistakes within the stipulated time but also inform the customer about the resolution, including instances of complaint rejection.<\/li>\n<\/ol>\n\n\n\n

    Practical Challenges and Implications<\/h2>\n\n\n\n

    Despite its strengths, this framework is not without challenges:<\/p>\n\n\n\n