RBI’s ‘Diwali gift’ for borrowers: Alerts via SMS and higher compensation in case of delay | Mint
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Business News/ Money / Personal Finance/  RBI’s ‘Diwali gift’ for borrowers: Alerts via SMS and higher compensation in case of delay
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RBI’s ‘Diwali gift’ for borrowers: Alerts via SMS and higher compensation in case of delay

The banking regulator RBI has released a series of new rules, one of which includes informing the customers when their credit information is accessed by the bank

The circular was issued on Oct 26 and will come into effect six months from the date of this circular.Premium
The circular was issued on Oct 26 and will come into effect six months from the date of this circular.

A few days before the auspicious day of Diwali, the banking regulator Reserve Bank of India (RBI) has issued a set of instructions which – in letter and spirit – favour the retail borrowers. These include intimation via sms when your credit information is shared with the bank, and entitlement to a higher compensation when there is a delay in updation of credit information. 

Have you ever wondered why you suddenly get a string of calls from banks offering personal loans soon after you applied for a loan? This may have happened after a credit rating agency such as CRISIL shared your credit report with the bank you had approached for the loan. Although this will still happen, at least you will know as to why this happened.

The RBI has now instructed the banks and these agencies that the customers must be informed when a bank happens to access their credit report.  

The RBI, via a circular, has instructed the credit information companies (CICs) and credit institutions (Cis) to send the alerts through SMS/ email to customers when their credit information report is accessed by a lender.

Banks will also be supposed to send alerts through SMS/ email to customers while submitting information to CICs regarding default/ days past due in existing credit facilities.

The circular was issued on Oct 26 and will come into effect six months from the date of this circular.      

The customers can also send requests for data correction by credit institutions. And in case of rejection, credit institutions will inform the customers the reasons for the rejection of their request for data correction to enable such customers. 

100 per day

The RBI has also said that a compensation mechanism will be put in place for delayed updating / rectification of credit information by the credit institutions and credit information companies.

Complainants will also be entitled to a compensation of 100 per calendar day in case their complaint is not resolved within a period of thirty calendar days from the date of the initial filing of the complaint by the complainant.

A CI shall pay compensation to the complainant if the CI has failed to send updated credit information to the CICs by making an appropriate correction or addition or otherwise within twenty-one (21) calendar days of being informed by the complainant or a CIC.

 

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Published: 27 Oct 2023, 05:00 PM IST
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