Aimed at quicker solutions to credit-related issues, the Reserve Bank of India (RBI) announced a compensation framework for Credit Information Companies (CICs) and Credit Institutions (CIs).
If a complaint remains unresolved for over 30 days with a CI/ CIC, complainants will receive Rs 100 for each day of delay.
The resolution date is when the corrected Credit Information Report (CIR) is sent to the complainant's postal address or email ID. Compensation will be credited to the complainant's bank account within five working days of resolution. The compensation framework will be effective within six months from October 26, 2023.
CIs must compensate complainants if they fail to send updated credit information to CICs within 21 calendar days. For the unversed, a complainant may request a CIC or CI to update the credit information by making an appropriate correction; then, it should be updated within 30 days. If the CI made a particular correction, it should forward it to the CIC or complainant in 21 days. Then, CIC gets nine days for complete resolution, so it takes a total of 30 days.
CICs must compensate complainants if a complaint remains unresolved for more than 30 days, provided CIs update the credit information within 21 calendar days.
CICs and CIs must inform complainants of the action taken on their complaints, including reasons for rejection. CIs and CICs will proportionately pay compensation for delays exceeding 30 calendar days in a shared manner.
When there's a delay in resolving a complaint registered with a CIC, the CIC will inform the concerned CIs and complainants about the total delay and compensation. The CI should also behave similarly if the complaint is registered with it.
If a complaint involves inaccurate credit information from multiple CIs, complainants must register the complaint with the relevant CIC, which will coordinate with all CIs to provide a comprehensive resolution.
CICs and CIs will offer formats for complainants to submit contact, email, and bank account or Unified Payment Interface (UPI) details for compensation.
Complainants can approach the RBI Ombudsman in case of wrongful denial of compensation by CIs or CICs.
In case of wrongful denial of compensation by CIs which are yet to be covered under the Reserve Bank - Integrated Ombudsman Scheme, 2021, the complainant can approach the Consumer Education and Protection Cell (CEPC) functioning from Regional Offices (ROs) of Reserve Bank of India.
The compensation framework does not apply to disputes covered by Section 18 of CICRA, 2005, internal administration matters, disputes related to credit score computation, etc.
CICs and CIs failing to adhere to these directions may face penal action according to the provisions of CICRA, 2005.