Lok Sabha Question No. 1097 (UNSTARRED), answered on 2025-02-10
Subject: Oversight of Credit Rating Bureaus
Ministry: FINANCE
Asked by: Thiru Arun Nehru

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO-1097

ANSWERED ON MONDAY, FEBRUARY 10, 2025/MAGHA 21, 1946 (SAKA)

## OVERSIGHT OF CREDIT RATING BUREAUS

## 1097. THIRU ARUN NEHRU

Will the Minister of FINANCE be pleased to state:-

- (a) the details of oversight mechanism currently in place for Credit Rating Bureaus;
- (b) whether the consumers are denied a fair chance to correct errors in their report; and

(c) whether the Government proposes to take corrective action to protect the common man?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI PANKAJ CHAUDHARY)

(a) to (c): Credit Information Companies (CICs) are governed by the provisions of Credit Information Companies (Regulation) Act, 2005 (CICRA), the rules and regulations made thereunder, and guidelines issued by the Reserve Bank of India (RBI) from time to time. The  extant  framework  of  CICRA  empowers  RBI  to  determine  policy  in  relation  to functioning of CICs, issue directions, inspect the book of accounts and impose penalty on CICs for non-adherences to the extant guidelines.

It is provided in CICRA that a borrower or client may request the concerned CIC or the credit institution (CI) for correction/updation  of  his  credit  information,  and  the concerned  CIC  or  CI  are  required  to  take  appropriate  steps  to  update  the  credit information within thirty days of being requested to do so.

Further,  RBI  has  extended  the  alternate  grievance  redressal  mechanism  under  Reserve Bank- Integrated Ombudsman Scheme, 2021 (RBIOS) to cover grievances against CICs also.  In  case  of  being  aggrieved  by  an  act  or  omission  of  a  CIC  or  CI,  resulting  in deficiency in service, the customer can file a complaint under RBIOS for redressal.

Also, RBI has proactively taken measures for strengthening and improving the efficacy of the  grievance redress  mechanism and customer service provided by the CIs and CICs, under the broad framework of CICRA, 2005. RBI has issued Master Direction on Credit Information Reporting, which, inter alia, include following provisions to improve delivery of services to the common man:

- (i) CICs  have  been  directed  to  provide  access  to  one  free  full  credit  report, including credit score, in an electronic format, to individuals whose credit score is available with them.
- (ii) CICs,  with  a  view  to  strengthen  the  internal  grievance  redress  mechanism  by enabling  a  review  of  customer  complaints  before  their  rejection,  have  been directed  to  appoint  Internal  Ombudsman  to  act  as  an  independent  apex  level authority within the CIC.
- (iii) CICs and CIs have been directed to implement the compensation mechanism for delayed updation or rectification of credit information, wherein complainants are entitled to a compensation of Rs. 100 per calendar day in case their complaint is not resolved within a period of thirty calendar days.
- (iv) In case of wrongful denial of compensation by CIs or CICs, the complainant can approach RBI Ombudsman under RBIOS.
- (v) CICs have been directed to notify customers via SMS or email, when their Credit Information Report (CIR) is accessed by the Specified Users and such enquiry reflects in the CIR of the borrower.
- (vi) CIs have been directed to send alerts through SMS or email to customers, while submitting  information  to  CICs  regarding  default  or  days  past  due  in  existing credit facilities.
- (vii) CIs and CICs have been directed to undertake Root Cause Analysis (RCA) of the customer grievances at least on a half-yearly basis.

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