Title: “Delayed Credit Information Updates? RBI Introduces Compensation for Consumers”
In a noteworthy move aimed at protecting consumers’ rights, the Reserve Bank of India (RBI) has issued a directive to credit information companies (CICs) and credit institutions (CIs) regarding delayed credit information updates. According to the new RBI mandate, if complaints related to credit information updates or rectifications are not resolved within 30 days, complainants are entitled to monetary compensation. This compensation amounts to Rs 100 per calendar day for every day beyond the stipulated 30-day period.
RBI’s Directive on Compensation
The RBI’s directive is clear: individuals who file complaints about delayed credit information updates or rectifications have the right to receive Rs 100 in compensation for each calendar day their complaint remains unresolved after the initial filing with a CI or CIC.
For context, a CIC is an independent third-party institution responsible for gathering financial data on individuals, including information about loans, credit cards, and more. This data is then shared with the CIC’s members, helping in assessing an individual’s creditworthiness.
Conditions for Compensation
The conditions for compensation are straightforward. If a CIC fails to update or correct an individual’s credit information within 30 days after receiving the updated or corrected data, the CIC must compensate the complainant. Similarly, CIs must provide compensation if they fail to transmit updated credit information to CICs within 21 calendar days of receiving the information from the complainant or a CIC.
Enhancing Customer Awareness
In a separate notification, the RBI has encouraged CICs to enhance customer awareness by sending alerts through SMS or email when a customer’s Credit Information Report (CIR) is accessed by Specified Users (SUs). These alerts are to be sent only when the CIR inquiry is reflected in the customer’s report. Additionally, CIs are encouraged to organize special awareness campaigns to educate customers about the benefits of providing their mobile numbers and email IDs for this purpose.
Key Credit Information Companies in India
Major credit information companies in India include Credit Information Bureau (India) Limited (CIBIL), Equifax, Experian, and CRIF Highmark. These organizations play a significant role in gathering and disseminating credit-related data to financial institutions and lenders.
In conclusion, the RBI’s directive introduces a welcome level of consumer protection by ensuring that credit information updates are processed promptly. The introduction of monetary compensation for delays reflects the RBI’s commitment to safeguarding consumer interests.
