RBI fixes Rs 100 per day compensation for customers in case credit institutions don't resolve complaint in 30 days

The Reserve Bank of India (RBI) announced new rules on Thursday that entitle complainants to a compensation of Rs 100 per calendar day in case their complaint is not resolved within a period of 30 calendar days from the date of the initial filing of the complaint with a Credit Institution (CI) or a Credit Information Company (CIC). The circular has been sent to all banks, NBFCs, financial institutions, asset reconstruction companies, and credit information companies.

In the circular, RBI stated 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). Exercising powers conferred upon it by Credit Information Companies (Regulation) Act, 2005, the Reserve Bank has directed credit institutions and credit information companies to implement the compensation framework for delayed updation or rectification of credit information.

In the circular, RBI has mentioned the parameters stated below — 

a) Complainants shall be entitled to a compensation of Rs 100 per day in case their complaint is not resolved within a period of 30 days from the date of the initial filing of the complaint by the complainant with a credit institution or credit information company. 

b) A credit institution shall pay compensation to the complainant if it fails to send updated credit information to the credit information company by making an appropriate correction or addition or otherwise within 21 days of being informed by the complainant or a credit information company.

c) A credit information company shall pay compensation to the complainant if it fails to resolve the complaint within 30 days of being informed by the complainant or a credit institution, despite the credit institution having furnished the updated credit information to the credit information company within 21 days of being informed by the complainant or the credit information company.

d) The complainant shall be advised by the credit institution or credit information company 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 credit institution and credit information company.

e) Compensation to be provided by the credit information companies/ credit institutions to the complainant (for delayed resolution beyond 30 days of filing the complaint) shall be apportioned among the credit institutions / credit information companies concerned proportionately. 

f) Where the grievance/ complaint involves inaccurate credit information provided by more than one credit institutions, the complaint shall be registered by the complainant with the concerned credit information company. The CIC shall coordinate with all the credit institutions concerned and furnish the complainant with a comprehensive resolution of the grievance.

g) Where the complaint has been received and registered by a credit information company and there has been a delay in the resolution of the complaint, the credit information company shall inform the concerned credit institutions and the complainant after the final resolution, regarding total delay (in calendar days) and the amount of compensation to be paid by the credit institutions and/ or credit information company.

h) Where the complaint has been received and registered by a credit institution and there has been a delay in the resolution of the complaint, the credit institution shall inform the concerned credit information company and the complainant after the final resolution, regarding total delay (in calendar days) and the amount of compensation to be paid by the credit institution and/ or credit information company.

i) The date of the resolution of the grievance shall be the date when the rectified Credit Information Report (CIR) has been sent by the credit information company or credit institution to the postal address or email ID provided by the complainant.

j) The credit information companies/ credit institutions shall make appropriate provision 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 credit institutions/ credit information companies will not be held responsible for any incorrect information provided by the complainant.

k) The compensation amount shall be credited to the bank account of the complainant within 5 working days of the resolution of the complaint.

l) The complainant can approach RBI Ombudsman, under the Reserve Bank - Integrated Ombudsman Scheme, 2021, in case of wrongful denial of compensation by credit institutions or credit information companies.

m) In case of wrongful denial of compensation by credit institutions 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 Reserve Bank of India.

n) Non-Maintainability: The compensation framework shall not be applicable in the following cases —

i) Disputes for which remedy has been provided under Section 18 of CICRA, 2005. 

ii) 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 credit information company/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.

As per the circular, the compensation framework shall come into effect in 6 months. It directed the credit information companies and credit institutions to put in place necessary systems and processes to implement the compensation framework within the next 6 months.

In a stern tone, RBI announced that credit information companies and credit institutions that contravene or fail to adhere to these directions shall be liable for penal action as per the provisions of CICRA, 2005.