The Reserve Bank of India (RBI) has introduced a significant change in the regulations governing credit card users, aimed at enhancing consumer protection. Credit information companies such as CIBIL and Experian are facing tighter rules, and credit card users will benefit from these measures.
Daily Compensation for Unresolved Complaints
RBI has issued an order specifying that if a credit card customer’s complaint remains unresolved for more than 30 days, the credit institution will be required to pay a daily compensation of Rs 100 to the customer. This move is designed to ensure prompt resolution of customer grievances and provide financial redress for delays.
Alerts for Credit Score Queries
One of the key changes involves credit information companies sending alerts to customers when their credit scores are accessed. These alerts will be transmitted via SMS or email. If a customer files a complaint regarding their credit score and it is not resolved within 30 days, the concerned credit institution will be liable for a daily fine.
Transparency and Communication
To improve transparency and communication, lending institutions must inform customers before reporting any defaults. They are required to share this information with customers through SMS or email. Additionally, banks and lending institutions will be required to appoint nodal officers who will focus on resolving issues related to credit scores.
Effective Date and Implementation
These new rules will come into effect on April 26, 2024. RBI has given a grace period of six months to allow credit institutions to prepare for the changes. This move comes after RBI’s earlier warning about the impending implementation of these rules in April.
Compensation Structure
If a complaint remains unresolved after 30 days, compensation will be paid, with the responsibility for compensation shared between credit bureaus and lending institutions. The complainant will be entitled to receive compensation at the rate of Rs 100 per day. Lending institutions will have a 21-day window to address the complaint, and credit bureaus will have 9 days. If the lending institution fails to inform the credit bureau within 21 days, it will be responsible for paying the compensation. Similarly, if the credit bureau does not address the issue within 9 days after being informed by the lending institution, it will be liable for compensation.
These new guidelines are aimed at safeguarding the interests of credit card users and ensuring the swift resolution of complaints, fostering transparency, and holding credit institutions accountable for their response times.
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