The Reserve Bank of India (RBI) on October 26, 2023, issued a notification regarding the Framework for compensation to customers for delayed updation/ rectification of credit information
This has a reference to para 4 of the Statement on Developmental and Regulatory Policies released with the Bi-monthly Monetary Policy Statement 2023-24 on April 06, 2023, which states that a compensation mechanism will be put in place for delayed updation/rectification of credit information by the credit institutions (CIs) and credit information companies (CICs).
This shall come into effect within six months from the date of this circular, The CICs and CIs are directed to put in place the necessary systems and processes to implement the compensation framework within this period
The following has been stated namely: -
• It states that the 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 twenty-one calendar days of being informed by the complainant or a CIC
• A CIC shall pay compensation to the complainant if the CIC has failed to resolve the complaint within thirty calendar days of being informed by the complainant or a CI, despite the CI having furnished the updated credit information to the CIC within twenty-one (calendar days of being informed by the complainant or the CIC.
• It states that the compensation framework shall not be applicable in the following cases namely: -
(i) disputes for which remedy has been provided under 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
(ii) complaints/ references relating to
(a) internal administration
(b) human resources
(c) pay and emoluments of staff
(d) references in the nature of suggestions and commercial decisions of the CIC/CI.
(iii) complaints pertaining to disputes/ grievances regarding the computation of the credit score/ credit score model.
(iv) complaints that have been decided by or are already pending in other fora such as Consumer Disputes Redressal Commission, Courts, Tribunals, etc
• The detailed framework has been attached to the document
[Notification No. RBI/2023-24/72 DoR.FIN.REC.48/20.16.003/2023-24]
