New RBI Guideline On Credit Information Report 2023

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RBI Guideline On Credit Information Report: Good news is coming for credit card holders, loan account holders or those who want to take loans or credit cards. The Reserve Bank of India has once again fulfilled the responsibility of being a good regulator, as they were receiving numerous complaints for quite some time. Either the credit scores were not being updated properly, or they were not rectified, or the reporting was not being done correctly. Due to these issues, the credit scores of many people were deteriorating, making it difficult for them to get credit card approvals, loan approvals, or loans at good interest rates.

Bringing Credit Information Companies under Ombudsman’s Control

Keeping this in mind, the Reserve Bank of India issued a notification at the beginning of this year, stating that credit information companies such as CIBIL, Experian or others should be brought under ombudsman’s control. This means that the ombudsman under RBI can take action against them, demand compensation, or penalize them.

Now, here, when I say Experian or CIBIL, I mean to address credit information companies. If I say credit institutions it will be used for credit institutions, banks, and lenders. So, remember, it will be easier for you to understand.

Compensation To Card or Account Holders

On October 26, 2023, the RBI issued the final notification, stating that if your credit score is not corrected or updated on time, you will receive compensation of ₹100 per day. A timeframe of 6 months has been given for this framework. Credit information companies and credit institutions have been given 6 months to prepare their framework. Within these 6 months, their framework should be operational. So, if after April 26, 2024, you complain that your credit score is bad due to a mistake by the bank or the credit information company, they will have to pay compensation of ₹100 per day to you.

Credit information companies or credit institutions been given a 30-day time frame to resolve your complaint. If it is not resolved within 30 days, you will receive compensation of ₹100 per day thereafter. Essentially, this 30-day period has been divided into two parts: 21 days for banks, and only 9 days for credit information companies.

That means if you complain to the bank, the bank has 21 days to correct your credit score, rectify it and send the correct information to credit information companies. Within next 9 days, CIBIL or Experian will have to update your credit score. If you want, you can complain directly to the bank or to credit information companies. If you complain to credit information companies, they have to send that information back to the bank & bank will do the rectification within 21 days. Thereafter, within 9 days, credit information companies will have to update after receiving rectified information from the bank.

If anyone exceeds their time limit, they will have to provide compensation. If the bank takes more than 21 days, they will have to provide compensation.

After 21 days, they need to provide a daily compensation of ₹100. If they submit the correct information within 21 days, credit information companies fail to correct it within next 9 days, then credit information company will continue to provide compensation of  ₹100 each day. If they delay or manipulate in giving you compensation for both, you can file a complaint with the RBI Ombudsman.

Regular Update To Account Holders For Access To Their Credit Score

The most important thing proposed is to keep you updated because the Right to Information is a fundamental right under Article 19, Clause 1, Subclause (a). The RBI has stated that credit information companies will provide you with a full report once a year. This report will show your credit health, the inquiries made, which credit cards you have, the available limit, and all other information, all provided free of charge.

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Full Credit Information To Card Or Account Holders Once In a Year

To check this information, visit the website provided by these companies, where you can check your credit information from January to December once a year. The circular dated April 6, 2023, also proposed that if a lender, like a bank or a credit card company, checks your cibil score, they are responsible for updating you through email or messages about the check on your credit score.

The banks and lenders are also responsible for informing you through SMS and email if your credit score is being checked to collect your credit information. This is essential as agents related to credit cards and loans check on their own when the product is in the process of approval. They call you when the approval is received.

As a result, many inquiries are made into your credit score. Now, they will inform you first that they are going to check your credit score. After checking, your score will remain good. Banks and lenders, which are nodal officers, are appointed for both. If credit score companies receive any complaints, they will contact this nodal officer directly to correct your credit score. This process will be easy and fast because a responsible person is appointed there.

For Full RBI Circular, Click Below:

Valid Reason For Rejection Of Correction Application As Per RBI Guideline On Credit Information Report

If you have submitted an application for correction, and it is rejected by the bank or credit information company, then it will inform you through SMS and email you with the reason for your application being rejected. Also, banks will inform you through SMS and email if your application is rejected. Credit information companies should also mention on their website how many complaints they have received and what decision has been taken on those complaints so that transparency can be maintained.

This is a very good step to protect your credit score. To protect your credit history and keep it updated, many changes have been introduced by the RBI, which will be implemented in the next 6 months.

Frequently Asked Questions

Is Credit Information Report Mandatory?

India requires individuals who have taken loans from banks or other financial institutions to obtain credit information reports. These reports can be acquired from any of the four primary credit bureaus in the country, namely CIBIL, Experian, Equifax, and CRIF.

How Many CIC are Approved by RBI?

There are four Credit Information Companies (CICs) approved by the Reserve Bank of India (RBI) in India. These CICs are CIBIL (Credit Information Bureau (India) Limited), Experian Credit Information Company of India Pvt. Ltd., Equifax Credit Information Services Pvt. Ltd., and CRIF High Mark Credit Information Services Pvt. Ltd

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