Borrowers will soon get compensation for delay in correction of credit report

The borrower will soon get compensation for the delay in correction of credit report. The RBI has suggested enhancing the borrowers' grievance redressal process. The idea is to create a system of compensation for clients who experience delays in the updating and correcting of their credit information reports. Customers will also receive an SMS anytime one of their reports is accessed. Customer complaint disclosures are also included in the proposal.

When it comes to history rectification, borrowers had so far been on the receiving end. They were advised to contact banks when they approached the credit bureau, but banks frequently failed to respond promptly to update and rectify information. With the new policy change, this will alter.

Credit history of debtors is frequently checked without their consent. This will no longer be an issue, especially for borrowers who have updated contact information with the previous lender because they will now receive immediate warnings through SMS and email. The CICs will now have to demonstrate not just how many complaints they have received but also how many of them were promptly resolved.

Customers of CICs would be able to use the Reserve Bank-Integrated Ombudsman Program to free of charge settle any complaints against CICs, the RBI had said in August 2022. This programme involves regulated businesses including various kinds of banks and financial non-banking organisations.

By April 1st 2023, all Credit Information Companies (CICs) must select an internal ombudsman to serve as the head of their internal grievance resolution process, according to a directive from the central bank of India. The Reserve Bank of India stated in a statement that the instructions include the IO's appointment/tenure, function and duties, procedural norms, and supervision system.

The IO will assess any complaints that CICs partially or completely reject before communicating their final judgement to the complainant, it was stated, adding that the IO would not accept any complaints from the general public directly.

The RBI said that by enabling an impartial top-level authority inside the CIC to assess customer complaints before they are rejected, these directives will enhance the internal grievance resolution system within the CICs.