Thursday, May 23, 2024

RBI Introduces New Rules to Enhance CIBIL Score Transparency and Customer Benefits

The Reserve Bank of India (RBI) has introduced five new rules related to the Credit Information Bureau (CIBIL Score). Many complaints had arisen regarding credit scores, prompting the central bank to tighten regulations. These rules will come into effect from April 26, 2024. In April, RBI had issued a warning regarding the implementation of these rules. Here are the details about these rules:

Notification of Credit Check: RBI has mandated that all credit information companies must notify customers when their credit reports are checked by banks or NBFCs. This notification can be sent via SMS or email. This rule aims to address complaints related to credit scores.

Disclosure of Rejection Reasons: If a customer’s request is rejected, the RBI requires that the reason for rejection must be disclosed to the customer. This will help customers understand why their request was rejected. A list of reasons for rejection should be shared with all credit institutions.

Free Annual Full Credit Report: Credit information companies are required to provide customers with a free full credit report once a year. To facilitate this, credit companies should display a link on their websites, allowing customers to easily check their full credit reports. This will help customers access their CIBIL Score and complete credit history.

Notification of Defaults: Before reporting a default, banks and lending institutions must notify the customer. They should send SMS or email notifications sharing all relevant information. Additionally, banks and lending institutions should appoint nodal officers to address credit score-related issues.

Timely Resolution of Complaints: Credit information companies must resolve customer complaints within 30 days. Failure to do so will result in a daily penalty of INR 100. Banks and lending institutions have 21 days to inform the credit bureau, and credit bureaus have 9 days to resolve the complaint. If any of these deadlines are not met, penalties will be imposed.

These rules are aimed at making the credit reporting system more transparent and customer-friendly. They provide guidelines for reporting credit information and resolving disputes, ultimately benefiting consumers.

 

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