On January 6, 2025, the Reserve Bank of India (RBI) released a ‘Master Direction – Reserve Bank of India (Credit Information Reporting) Directions, 2025’, consolidating its various guidelines for banks and financial institutions regarding the reporting of Customer Credit Information(CCI).
- RBI issued these directions in the exercise of the powers conferred under Section 11 of the Credit Information Companies (CICs) (Regulation) Act, 2005.
- The purpose of issuing the MD is to establish a standardized framework for the reporting and dissemination of credit information, ensure the confidentiality and security of sensitive credit data, and address other related objectives.
Key Points:
i.Credit Information Companies (CICs) are required to notify customers via Short Message Service(SMS) or electronic mail(e-mail) whenever their Credit Information Report (CIR) is accessed by specified users (SUs).
- CICs shall send alerts only when the Credit Information Report (CIR) inquiry is reflected in the customer’s CIR.
ii.Credit Institutions (CIs), including banks and Non-Banking Financial Companies (NBFCs), must inform customers of the reasons for rejecting their requests for data correction, if applicable, to help them better understand the issues in their CIR.
iii.Complainants are entitled to a compensation of Rs. 100 per calendar day if their complaint is not resolved within thirty (30) calendar days from the date of the initial filing with a CI or CIC.
Note: RBI has mandated that all lenders must update credit bureau records every 15 days, effective January 1, 2025.
About Credit Information Companies (CICs):
i.CICs collect public data, credit transactions, and payment histories of people and businesses, mainly for loans and credit cards.
ii.They collect data from banks, financial institutions, lenders, and other credit-granting entities, and then compile it into credit reports.
iii.Banks and financial institutions use CIC reports and scores to evaluate your creditworthiness before approving loans or credit cards.
iv.CICs in India are licensed by RBI and regulated by the Credit Information Companies Regulation Act, 2005 (CICRA), and RBI guidelines.
- Under Section 15 of the CICRA, every credit institution, such as banks, must be a member of at least one CIC.
- The act states that a CIC can only obtain information from its member institutions.
v.India currently has only four credit information companies registered with the RBI. They are
- Credit Information Bureau (India) Limited (CIBIL)
- Equifax Credit Information Services Private Limited
- Experian Credit Information Company of India Private Limited
- CRIF High Mark Credit Information Services Private Limited
