You Will Get Rs 100/day for Unresolved Complaints Beyond 30 Days

The Reserve Bank of India released a new circular on October 26, 2023, stating that you will get ₹100 per day if your complaint against credit information companies is not resolved within 30 days. In this article, we will try to understand the implications of this rule. First, let’s understand which organisations are involved in this process. 

Credit Institution (CI)

Any organisation that takes deposits or other repayable funds from the public is called a credit institution. Examples are Banks and NBFCs. 

Credit Information Company (CIC)

CIC is an independent third-party institution that collects financial data regarding loans and credit card individuals and shares it with its members. Banks and NBFCs are the customers of CICs.

According to the Credit Information Companies (Regulation) Act, 2005 (CICRA, 2005), after a complainant has raised a complaint, it has to be resolved by the CI or the CIC within 30 days.

How Much Time Would CI and CICs Get?

The CI has to forward the corrected credit information to the CIC within 21 days of being informed of the inaccuracy by the complainant. This effectively means that CICs would get 9 days to resolve the complaint.

So, if the CI fails to make the required appropriation and misses to send it to the CIC within 21 days, they have to pay the compensation. The CIC has to pay the compensation if it fails to resolve the complaint within 30 days, irrespective of whether the CI intimates the CIC by 21 days.

If the complaint is not resolved within 30 days, the compensation amount will be proportionately apportioned between CI and CICs.

The complaint will be resolved when the CIC or CI sends the Credit Information Report (CIR) to the complainant’s postal address or email ID.

Examples

1. Let’s say you registered a complaint with a CIC on November 1, 2022. The CIC asked for a report from the CI (bank) on November 5, 2022, and they confirmed it to CIC on November 26, 2022. This means the bank sent the confirmation within 21 days, so there was no delay from the bank’s end. The CIC then resolves and provides the rectified Credit Information Report (CIR) to the complainant on December 2, 2022. So, the CIC will provide compensation of ₹100 to the complainant because there was 1 day’s delay in resolving the complaint. (i.e. in this case, by December 1, 2022)
2. Suppose you registered a complaint with a CIC on October 1, 2022, and the CIC asked the responsible bank to confirm on October 4, 2022. The bank confirmed the CIC on October 28, 2022. This means that the bank delayed the confirmation by 2 days. The CIC resolved the complaint and sent the CIR by November 2, 2022( should have been resolved by October 31, 2022). This means there was no delay from the CIC end, as they resolved it within 9 days. But overall, there has been a 2-day delay in resolving the complaint due to the bank. So the total compensation is ₹200, which the bank will pay.

When Will the Compensation be Credited?

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

The scheme will be effective 6 months from the circular date, i.e. by April 26, 2023. This is a much-needed move by RBI to make the credit institutions more transparent and efficient regarding the complaints.