Banks and Credit Info firms to compensate complainants if there is delay in updation/ rectification of credit information
Credit institutions (CIs) and credit information companies (CICs) will have to compensate complainants at the rate of ₹100 per day in case their complaint regarding delayed updating or rectification of credit information is not resolved within 30 days from the date of the initial filing of the complaint, according to the RBI.
Compensation to be provided by the CIs (such as banks) or CICs to the complainant for delayed resolution beyond 30 days of filing the complaint should be apportioned proportionately among the CIs or CICs concerned, per the RBI’s circular on “Framework for compensation to customers for delayed updation/ rectification of credit information”.
Compensation framework
The central bank said the compensation framework will come into effect six months from the date of this circular. CICs and CIs have been directed to put in place the necessary systems and processes to implement the compensation framework within this period.
The CICs and CIs are required to make appropriate provisions in their complaint submission format (both online and offline) for enabling the complainant to submit the contact details, email ID, and bank account details/Unified Payment Interface (UPI) ID for crediting the compensation amount.
“The onus of providing accurate details will lie with the complainant, and the CIs or CICs will not be held responsible for any incorrect information provided by the complainant.
“The compensation amount shall be credited to the bank account of the complainant within five working days of the resolution of the complaint,” RBI said.
The complainant can approach the RBI Ombudsman under the Reserve Bank-Integrated Ombudsman Scheme, 2021, in case of wrongful denial of compensation by CIs or CICs.
In cases 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), which functions from Regional Offices (ROs) of the RBI.
The central bank noted that the combined reading of Section 21(3) of the Credit Information Companies (Regulation) Act, 2005 (CICRA, 2005) and Rule 20(3)(c) of the Credit Information Companies Rules, 2006 provide the CI and the CIC, collectively, with an overall limit of 30 days to resolve or dispose of the complaint.
In effect, this would mean that a CI would get 21 days, and CICs would effectively get the remainder of nine days for complete resolution of the complaint.
RBI said in its Framework that a CI shall pay compensation to the complainant if it has failed to send updated credit information to the CICs by making an appropriate correction or addition or otherwise within 21 days of being informed by the complainant or a CIC.
A CIC shall pay compensation to the complainant if it has failed to resolve the complaint within 30 calendar days of being informed by the complainant or a CI, despite the latter having furnished the updated credit information to the CIC within 21 days of being informed by the complainant or the CIC.