The Reserve Bank of India (RBI) has released a framework to compensate complainants for delay in the updation or rectification of credit information by credit institutions (CIs) and credit information companies (CICs). This framework will come into force in 6 months.
If the complaint is not resolved within 30 days of the filing of the complaint, the complainants would be eligible to receive compensation of Rs. 100 per day. Any contravention of the directives under the framework will result in penal action applicable under the provisions of the Credit Information Companies (Regulation) Act, 2005.
As per the said Act, once a request is received from a complainant to update the credit information through an appropriate correction, addition or otherwise, the CI or CIC has to take steps to update the credit information within a period of 30 days. The circular dated October 26, 2023, states that a CI would get 21 days’ time and the CICs would have 9 days to resolve the complaint. This is according to the provisions of the Act and the Credit Information Companies Rules, 2006.
If the CI fails to forward the updated credit information of the complainant to the CICs within the said 21 days, the CI will be liable to pay compensation to the complainant. And if the CI forwards it on time, but the CIC does not resolve the complaint within 30 days, the CIC would be liable to pay the compensation.
Under the framework, the compensation amount would have to be credited to the complainant’s bank account within 5 working days of the resolution of the complaint. If there is any wrongful denial of compensation, the complainant may approach the RBI Ombudsman, under the Reserve Bank – Integrated Ombudsman Scheme, 2021.
The circular clarifies that the framework will not apply to cases where the remedy for the dispute is available under Section 18 of the 2005 Act, or complaints relating to the computation of credit score, pay and emoluments of staff, etc.