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This measure aims to reduce delays customers face when resolving issues or updating data with banks, financial firms, Credit Information Companies and Credit Institutions
The RBI has ordered that banks are also required to inform customers about defaults. (Representative/Shutterstock)
In a move to protect consumers, the Reserve Bank of India (RBI) has issued a new order outlining penalties for banks and financial institutions that fail to address customer complaints promptly.
The RBI directive mandates that if a complaint remains unresolved within 30 calendar days from the date of filing, the complainant will be entitled to compensation of Rs 100 per day. This measure aims to address concerns regarding lengthy delays experienced by customers when seeking resolution or updates to their data from banks, financial companies, Credit Information Companies (CICs), and Credit Institutions (CIs).
The RBI has mandated that CICs must inform customers via email or SMS when their credit information is accessed by a bank or non-banking financial company (NBFC). Similarly, banks are required to inform customers about defaults. Failure to provide this update within 21 days will make the banks liable to compensate the complainant at a rate of Rs 100 per day.
Two Deadlines Set by RBI
The RBI’s direction establishes two significant deadlines. First, if a Credit Information Company (CIC) fails to resolve a complaint within 30 days of receipt, it will be required to compensate the complainant.
Second, concerning credit information updates, if a Credit Institution (CI) does not provide updated credit information to the CIC within 21 days of being informed by the complainant or the CIC, it will also be liable for compensation.
CICs in operation
Currently, four CICs operate in India with authorisation from the Reserve Bank of India (RBI): TransUnion CIBIL, CRIF High Mark, Equifax, and Experian. In every instance, the credit institution (CI) or CIC must inform the complainant about the action taken on the complaint, including cases of rejection. If a complaint is rejected, the reasons for the decision should be conveyed to the complainant.
Updates to be provided via mobile or email
The RBI has mandated that CICs must send alerts to customers via SMS or email when submitting information concerning defaults or days past due (DPD) on existing credit facilities. This directive applies only when mobile numbers or email addresses are available. In cases where data updates are delayed for any reason, banks and financial institutions are required to inform their customers accordingly.
