RBI has recently updated its rules for bank and credit institutions related to CIBIL scores, are important for the borrowers.
After several complaints the Reserve Bank of India (RBI) has issued an important update related to the CIBIL score. The central bank has made the rules stricter. The new rules have come into effect from April 2024. If you are planning to take a loan, you must know about these 5 new rules by the RBI.
CIBIL Score For Loan: The RBI instructed all credit information companies to inform the customer, whenever a bank or NBFC checks a customer’s credit report. Such information can be sent via SMS or email.
If Loan Or Other Request Rejected: RBI also stated that it is necessary to tell the reason why a customer’s request is rejected. So it can help the customer to understand why their request has been rejected. It is necessary to make a list of the reasons for rejecting the request and send it to all credit institutions.
Credit Report: The RBI also said that Credit Information Companies (CICs) should provide a “Free Full Credit Report (FFCR)” once every calendar year. The credit company should send a link to its website where the customers can easily check their full credit report.
If Customer Is In Default: The central bank also asked the credit companies to inform the customer when they are about to default before reporting it. They should share all such information by sending SMS/e-mail.
Addressing Complaints: : The central bank also asked banks and loan-giving institutions to appoint a nodal officer who will work to solve the problems related to credit scores. If the credit information company does not resolve the customer’s complaint within 30 days, it must pay a fine of Rs 100 per day.
The lender will get 21 days and the credit bureau will get 9 days. If the bank does not inform the credit bureau within 21 days, the bank will have to pay a penalty. If the complaint is not resolved 9 days after the bank shares the information, the credit bureau will have to pay a penalty.
(Disclaimer: The information provided in this article is for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)