Mumbai: The Reserve bank of India (RBI) on Thursday told lenders, financial institutions and credit bureaus to resolve complaints filed by customers within 30 days or pay a fine of ₹100 per day.
The RBI also directed credit institutions (CIs) and credit information companies (CICs) to introduce a compensation framework for delayed updation or rectification of credit information.
“A CIC shall pay compensation to the complainant if the CIC has failed to resolve the complaint within 30 calendar days of being informed by the complainant or a CI, despite the CI having furnished the updated credit information to the CIC within 21 calendar days of being informed by the complainant or the CIC," the RBI said. The central bank has directed CICs and CIs to put in place processes and to implement the compensation framework in the next six months.
CICs maintain credit information of borrowers — individuals, corporates, and small businesses — which can be accessed by banks and other lenders. They collect information from a variety of credit providers including banks, credit card companies and non-bank financial institutions.
In June the RBI had imposed a combined penalty of ₹1.01 crore on all four CICs for inaccurate, incomplete data and not updating credit information within 30 days of receiving complaints from borrowers.
TransUnion CIBIL Ltd was fined ₹26 lakh, while Experian Credit Information Company of India Pvt Ltd (Experian India) and Equifax Credit Information Services Pvt Ltd were fined ₹24.75 lakh each. The RBI also imposed a fine of ₹25.75 lakh on CRIF High Mark Credit Information Services Pvt Ltd.
The call for a compensation framework comes after the RBI received many complaints from customers about CICs not updating the status of borrowers. Many customers had complained that when they rectified a default issue or pointed out a wrong classification, CICs failed to act within the stipulated time. As a result, many customers were unable to get loans or credit cards.
Separately, the RBI on Thursday said that CICs should also provide easy access to free full credit report including credit score once a year to individuals whose credit history is available with the CIC by displaying the link prominently on their website. It said CICs should also send SMS or email alerts to customers when their credit information report (CIR) is accessed by CIs or CICs.
It also directed credit institutions to send such alerts to customers when submitting information to CICs regarding default or days past due (DPD) in existing credit facilities. The regulator also said CIs should also have a dedicated nodal point for CICs to redress customers' grievances.
