Skip to main content

Customer service and compensation framework for CIs and CICs and reporting of credit information to CICs

Reserve Bank of India (RBI) has released a comprehensive framework for strengthening and improving the efficacy of the grievance redress mechanism and customer service provided by the Credit Institutions (CIs) and Credit Information Companies (CICs).

What are Credit Institutions (CIs)?

Credit Institutions (CIs) are the entities which undertake credit (lending) related activities and include -

  • Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks, and excluding Payments Banks)
  • Primary (Urban) Co-operative Banks / State Co-operative Banks / Central Co-operative Banks
  • Non-Banking Financial Companies (including Housing Finance Companies)
  • All-India Financial Institutions (Exim Bank, NABARD, NHB, SIDBI and NaBFID)
  • Asset Reconstructions Companies

What are Credit Information Companies (CICs)?

Credit Information Companies (CICs) are the entities that collect, maintain and analyse the credit information of companies and individuals. 

Presently, the following CICs are operating in India -

  • TransUnion CIBIL
  • Experian
  • Equifax
  • CRIF High Mark 

What is Credit Information?

Credit Information is the information related to credit facilities availed by the borrowers, which is forwarded by CIs to CICs.

What are the guidelines on obtaining CIC membership by CI?

  • All CIs shall become members of all CICs and submit data (including historical data) to them. 
  • One-time membership fee charged by the CICs, for CIs to become their members, shall not exceed ₹10,000 each and annual fees charged by the CICs to CIs shall not exceed ₹5000 each.

What is the revised timeline for updating the credit information by CIC?

  • CICs and CIs shall keep the credit information collected / maintained by them updated regularly on a fortnightly basis (i.e., as on 15th and last day of the respective month) (revised from ‘monthly basis’) or at such shorter intervals as mutually agreed upon between the CI and the CIC.
  • The fortnightly submission of credit information by CIs to CICs shall be ensured within 7 calendar days of the relevant reporting fortnight.
  • CICs shall provide a list of CIs which are not adhering to the fortnightly data submission timelines to RBI at half yearly intervals (as on March 31 and September 30 each year).
  • The revised timelines are effective from January 01, 2025.

What is the timeline for ingestion of credit information by CICs?

  • CICs shall ingest credit information received from the CIs into their databases within 5 calendar days (revised from ‘7 calendar days’) of its receipt from the CIs (revised timeline effective from January 01, 2025).
  • In case of data rejection, CICs shall communicate to the concerned CI, regarding rejection of the data with reasons, within 7 calendar days of receipt of the data.

When shall customer be intimated about their credit information report (CIR)?

  • CICs shall send alerts through SMS / email to customers when their Credit Information Report (CIR) is accessed by the Specified Users (SUs). The alerts shall be sent by CICs only when the CIR enquiry reflects in the CIR of the customer.
  • CIs shall send alerts through SMS / email to customers while submitting information to CICs regarding default / Days Past Due (DPD) in existing credit facilities.

What if there is discrepancy in CIR?

  • Complainant may request a CIC / CI to update the credit information by making an appropriate correction, addition or otherwise.
  • Where the grievance / complaint involves inaccurate credit information provided by more than one CI, the complaint shall be registered by the complainant with the concerned CIC. The CIC shall coordinate with all the CIs concerned and furnish the complainant with a comprehensive resolution of the grievance.

What is the timeline for resolution of complaint?

  • CI and CIC, collectively, have an overall limit of 30 days to resolve / dispose of the complaint. 
  • CI shall forward the corrected particulars of the credit information to the CIC / complainant within 21 days from the date when the CI was informed of the inaccuracy in the credit information. This would mean that, CICs would effectively get the remainder of 9 days for complete resolution of the complaint.
  • The complainant shall be advised by the CI / CIC of the action taken on the complaint in all cases, including the cases where the complaint has been rejected. In cases of rejection, the reasons for rejection shall also be provided by CI and CIC.
  • The date of the resolution of the grievance shall be the date when the rectified CIR has been sent by the CIC / CI to the postal address or email ID provided by the complainant.

What if complaint is not resolved within the timeline?

  • Where the complaint has been received and registered by a CIC and there has been a delay in the resolution of the complaint, the CIC shall inform the concerned CIs and the complainant after the final resolution, regarding total delay (in calendar days) and the amount of compensation to be paid by the CIs and / or CIC.
  • Where the complaint has been received and registered by a CI and there has been a delay in the resolution of the complaint, the CI shall inform the concerned CICs and the complainant after the final resolution, regarding total delay (in calendar days) and the amount of compensation to be paid by the CI and / or CICs.

How much compensation shall be paid to the complainant?

  • Complainants shall be entitled to a compensation of ₹100 per calendar day in case their complaint is not resolved within 30 calendar days from the date of the initial filing of the complaint by the complainant with a CI / CIC.
  • The compensation amount shall be credited to the bank account of the complainant within 5 working days of the resolution of the complaint.

Who shall pay the compensation?

  • 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 21 calendar days of being informed by the complainant / CIC.
  • 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 / CI, despite the CI having furnished the updated credit information to the CIC within 21 calendar days of being informed by the complainant / CIC.
  • Compensation to be provided by the CICs / CIs to the complainant (for delayed resolution beyond 30 calendar days of filing the complaint) shall be apportioned among the CIs / CICs concerned proportionately.

What if compensation is rejected by CI / CIC?

  • The complainant can approach RBI Ombudsman, under the Reserve Bank - Integrated Ombudsman Scheme, 2021, in case of wrongful denial of compensation by CIs / 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 Consumer Education and Protection Cell (CEPC) functioning from Regional Offices (ROs) of RBI.

Which cases are not covered under compensation framework?

The compensation framework is not be applicable in the following cases -

  • Disputes for which remedy has been provided under Section 18 of CICRA, 2005. The Section 18 of CICRA, 2005 provides that for disputes arising amongst, CICs, CIs, borrowers, and clients on matters relating to the business of credit information and for which no remedy has been provided under CICRA, 2005, such disputes shall be settled by conciliation or arbitration as provided in the Arbitration and Conciliation Act, 1996.
  • Complaints / references relating to (a) internal administration, (b) human resources, (c) pay and emoluments of staff, and (d) references in the nature of suggestions and commercial decisions of the CIC / CI.
  • Complaints pertaining to disputes / grievances regarding the computation of the credit score / credit score model.
  • Complaints that have been decided by or are already pending in other fora such as Consumer Disputes Redressal Commission, Courts, Tribunals, etc.

How many free CIRs shall be available to the customers?

CICs shall provide easy access to Free Full Credit Report (FFCR) including credit score, once in a year (January- December), to individuals whose credit history is available with the CIC.

What are the disclosure requirements?

CICs shall disclose on their websites, details of complaints registered against them and CIs.

From when are the guidelines applicable?

  • The directions shall come into effect 6 months from the date of the directions (i.e. October 26, 2023).
  • CICs and CIs which contravene or default in adherence to the above directions shall be liable for penal action as per the provisions of CICRA, 2005.

(Updated on October 10, 2024)

What are the guidelines on credit information reporting subsequent to cancellation of license or certificate of registration of CIs?

As per the provisions of CICRA, 2005, entities whose licence or Certificate of Registration (CoR) has been cancelled by RBI, can no longer be deemed as CIs and their credit information cannot be accepted by the CICs. In such cases, repayment history of borrowers of these entities is not updated even if these borrowers continue to repay / clear their dues.

In order to redress the hardship faced by such borrowers, RBI has directed the CICs and CIs to implement a credit information reporting mechanism subsequent to the cancellation of the licence / CoR of banks / Non-Banking Finance Companies (NBFCs).

  • All CIs, whose licence or CoR has been cancelled by RBI shall be categorised as ‘Credit Institutions’ under Section 2(f)(vii) of CICRA.
  • These CIs shall continue to report credit information of the borrowers on-boarded and reported to CICs prior to cancellation of their licence or CoR to all the four CICs till the loan lifecycle is completed or the CI is wound up, whichever is earlier.
  • These CIs shall have access to CIRs pertaining to only those borrowers which were on-boarded and reported to CICs before the cancellation of their licence / CoR.
  • CICs shall not charge the annual and membership fees from these CIs.
  • CICs shall tag these CIs as ‘Licence Cancelled Entities’ in the CIR.
  • These guidelines shall also be applicable to those entities whose licence / CoR has been cancelled by RBI prior to issuance of these guidelines.

What are the guidelines on reporting of credit information by Asset Reconstruction Companies (ARCs)?

  • Asset Reconstruction Companies (ARCs) shall become members of all CICs and submit the requisite data to CICs.
  • ARCs shall keep the information collected / maintained by them, updated regularly on a fortnightly basis or at such shorter intervals as mutually agreed upon between the ARC and the CIC.
  • ARCs shall rectify the rejected data received from CICs and upload the same with the CICs within 7 days of receipt of such data.
  • ARCs shall put in place system and processes to ensure compliance with these guidelines latest by January 1, 2025.


References

Reserve Bank of India. (2015, January 15). 'Membership of Credit Information Companies (CICs)'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=9485&Mode=0

Reserve Bank of India. (2023, October 26). 'Framework for compensation to customers for delayed updation/ rectification of credit information'. Retrieved from https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12554&Mode=0

Reserve Bank of India. (2023, October 26). 'Strengthening of customer service rendered by Credit Information Companies and Credit Institutions'. Retrieved from https://rbi.org.in/Scripts/NotificationUser.aspx?Id=12553&Mode=0

Reserve Bank of India. (2024, August 08). 'Frequency of reporting of credit information by Credit Institutions to Credit Information Companies'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12718&Mode=0

Reserve Bank of India. (2024, October 10). 'Implementation of Credit Information Reporting Mechanism subsequent to cancellation of licence or Certificate of Registration'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12739&Mode=0

Reserve Bank of India. (2024, October 10). 'Submission of information to Credit Information Companies (CICs) by ARCs'. Retrieved from https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12740&Mode=0


Follow at - Telegram   Instagram   LinkedIn   Twitter   Facebook

Labels:

Comments

Post a Comment

Popular Posts

Highlights of RBI Annual Report 2023-24 – Chapter 7 to 12

Reserve Bank of India (RBI) has published its annual report for the financial year 2023-24. In a series of articles, we will go through the highlights of the report. This is the fifth and last article in the series.  Chapter 7 – Public Debt Management Ways And Means Advances (WMA) limit for the Government of India (GoI) for H1:2023-24 (April to September 2023) was fixed at ₹1,50,000 crore and for H2:2023-24 (October 2023 to March 2024) was fixed at ₹50,000 crore. RBI issued an ultra-long security of 50-year tenor aggregating ₹30,000 crore to cater to the growing needs of long-term institutional players. Issuance of Sovereign Green Bonds (SGrBs) for an aggregate amount of ₹20,000 crore included maiden issuance of 30-year (₹10,000 crore) SGrB in addition to 5-year (₹5,000 crore) and 10-year (₹5,000 crore) SGrBs. A new 3-year benchmark security was introduced as part of government market borrowing programme during H1:2023-24.  The basket of products offered through the ‘Retail ...
Post a Comment
Read more

Lending against Gold and Silver collateral

Reserve Bank of India (RBI) has issued directions on lending against the collateral of gold and silver. To whom are the directions applicable? The directions are applicable to the following regulated entities (REs) – Commercial Banks (including Small Finance Banks, Local Area Banks and Regional Rural Banks, but excluding Payments Banks). Primary (Urban) Co-operative Banks (UCBs) & Rural Co-operative Banks (RCBs), i.e., State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs). Non-Banking Financial Companies (NBFCs), including Housing Finance Companies (HFCs). Which loans are covered under the directions? The directions shall apply to all loans offered by an RE for the purpose of consumption or income generation (including farm credit) where eligible gold or silver collateral is accepted as a collateral security. What is eligible collateral? Eligible collateral means the collateral of jewellery, ornaments or coins made of gold or silver. A lender shall not grant any ad...
Post a Comment
Read more

Due Diligence of AePS Touchpoint Operators

Reserve Bank of India (RBI) has issued directions on due diligence of Aadhaar Enabled Payment System (AePS) touchpoint operators. What is Aadhaar Enabled Payment System (AePS)? Aadhaar Enabled Payment System (AePS) is a payment system in which transactions are enabled through Aadhaar number and biometrics / OTP authentication providing financial services such as cash withdrawal, cash deposit, fund transfer, and non-financial services such as mini statement and balance enquiry, etc. AePS is a payment system operated by National Payment Corporation of India (NPCI) that facilitates interoperable transactions using Aadhaar enabled authentication.  What is AePS touchpoint? AePS touchpoint is the terminal deployed by acquirer banks to facilitate AePS transactions, which shall include both mobile and fixed points. Who is AePS Touchpoint Operator (ATO)? AePS Touchpoint Operator (ATO) is the individual onboarded by the acquiring bank who operates the AePS touchpoint. What is the rationale b...
Post a Comment
Read more

Pre-payment Charges on Loans

Reserve Bank of India (RBI) has issued directions on pre-payment charges on loans. What issues were observed by RBI during supervisory reviews? Divergent practices were observed amongst Regulated Entities (REs) with regard to levy of pre-payment charges in case of loans sanctioned to Micro and Small Enterprises (MSEs) which lead to customer grievances and disputes.  Certain REs were found to include restrictive clauses in loan contracts / agreements to deter borrowers from switching over to another lender, either for availing lower rates of interest or better terms of service. To whom shall the directions be applicable? The directions shall apply to all commercial banks (excluding payments banks), co-operative banks, Non-Banking Financial Companies (NBFCs) and All India Financial Institutions (AIFIs). To which loans shall the direction be applicable? The directions shall be applicable to all floating rate loans and advances sanctioned or renewed on or after January 01, 2026. Which ...
Post a Comment
Read more

Prior approvals from or intimations / reporting to RBI by NBFC-BL

Non-Banking Financial Companies (NBFCs) are required to obtain prior approvals from Reserve Bank of India (RBI) or intimate / report to RBI various events. This article lists out some of such important events where prior approvals or intimations / reporting is required for Base Layer NBFCs (NBFC-BL). Events requiring prior approval from RBI  Master Direction – Reserve Bank of India (Non-Banking Financial Company – Scale Based Regulation) Directions, 2023 dated October 19, 2023 Para 30 – NBFCs shall prepare its balance sheet and profit and loss account as on March 31 every year. Whenever an NBFC intends to extend the date of its balance sheet as per provisions of the Companies Act, 2013, it shall take prior approval of RBI before approaching the Registrar of Companies for this purpose. Even in cases where RBI and the Registrar of Companies grant extension of time, the NBFC shall furnish to RBI a proforma balance sheet (unaudited) as on March 31 of the year and the statutory returns ...
Post a Comment
Read more