The Reserve Bank of India (“RBI”) has issued the Master Direction – Reserve Bank of India (Credit Information Reporting) Directions, 2025 (“Master Direction”) which consolidates the instructions issued to Regulated Entities (“REs”) on reporting of the credit information.
Applicability:
The provisions of the Master Direction will be applicable to credit institutions (“CIs”) and credit information companies (“CICs”) as defined in these Directions.
Key Takeaways of the Requirements under the Master Direction:
- Membership of the CICs:
- All CIs have to become members of all the CICs registered with the RBI. The annual charges charged by CICs will not exceed ₹5,000/- each.
- Data Formats for reporting of Credit Information:
- Standardised formats have been prescribed (Annex IV of the Master Direction) for reporting of credit information by CIs to the CICs. These standardised data formats would be a non-proprietary reporting format and will be known as “Uniform Credit Reporting Format” (UCRF) as denoted below:
- Form 1- Uniform Credit Reporting Format (Consumer) – for consumer segment.
- Form 2- Uniform Credit Reporting Format (Commercial) – for commercial segment
- Form 3- Uniform Credit Reporting Format (MFI) – for microfinance segment.
- Credit information reporting in respect of Self Help Group (SHG) members has also been prescribed under the present Master Direction
- In order to address the challenges in updating credit information of borrowers of CI whose Certification of Registration (CoR)/ licence has been cancelled, CICs and CIs have to implement, before April 10, 2025, a credit information reporting mechanism subsequent to cancellation of licence/ CoR of banks/ NBFCs (as per format prescribed in Annex VII).
- Data Validation by CICs and Rectification of Rejected Data:
- In case of rejection of data, CICs have to share logic and validation process involved in data acceptance, so that instances of data rejection are minimised.
- In such a situation, CIs have to rectify the rejected data and upload the same with the CICs within seven days of receipt of such rejection report.
- Correction of Credit Information Report:
- Credit Institutions have to abide by the time periods stipulated under Credit Information Companies (Regulations) Act, 2005 (“CICRA”) and the Rules and Regulations framed thereunder in respect of updation, alteration of credit information, resolving disputes, etc. Deviations from stipulated time limits have to be monitored and commented upon in the periodical reports/reviews put up to the Board/ Committee of Board on customer service.
- Credit Institutions need to have arrangements in place to receive customer requests for rectification of data in CIRs. In order to maintain high data quality, all erroneous data have to be corrected at the source by the CI that originally submitted the data
- Use of credit information reports in credit appraisal:
- CIs have to include in their loan policies/ credit appraisal processes, suitable provisions for obtaining CIRs from one or more CICs so that the credit decisions are based on credit information available in the system.
- Display of information:
- CIs, which are secured creditors as per the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, have to display, on their website, information in respect of the borrowers whose secured assets have been taken into possession by the CIs under the SARFAESI Act, 2002. The format for such display has been provided in Annex XI of the Master Direction.
- Such list has to be updated by CIs on a monthly basis.
- Customer Service and Grievance Redressal:
- Credit Institutions have to send alerts through SMS/ email to customers while submitting information to CICs regarding default/ days past due (DPD) in existing credit facilities, wherever the mobile number/email ID details are available.
- To enable sending of alerts through SMS/ email, the Uniform Credit Reporting Format for reporting credit information by CIs to CICs has been modified. The detailed format has been provided in Annex XII (item 1).
- CIs will have to set up a dedicated nodal point/ official of contact for CICs for redress of customer grievances. Details of the nodal point/ official along with email ID and telephone/ mobile number has to be furnished to CICs. Additionally, any change in nodal point has t be intimidated to CIC within 5 calendar days of such change.
- CIs have to undertake Root Cause Analysis (RCA) of the customer grievances at least on a half yearly basis. For this purpose, CIs will also have to use, among others, information on data rejected by the CICs and DQI provided by CICs as sources of information for carrying out RCA.
- CICs and CIs have also been directed to implement a compensation mechanism for delayed updation/ rectification of credit information. The details on how the framework of the compensation mechanism will be, is provided in the Master Direction.
- The Master Direction has detailed out best practices that have to be taken into account by CIs. The details have been provided in Annex XIV.
- With the present Master Directions gaining effect, multiple circulars/notifications have been repealed , a few of which are listed below:
- Implementation of Credit Information Reporting Mechanism subsequent to cancellation of licence or Certificate of Registration dated 10.10.2024
- Frequency of reporting of credit information by Credit Institutions to Credit Information Companies dated 08.08.2024
- Strengthening of customer service rendered by Credit Information Companies and Credit Institutions dated 26.10.2023
- Display of information – Secured assets possessed under the SARFAESI Act, 2002 dated 25.09.2023
- Data Format for Furnishing of Credit Information to Credit Information Companies and other Regulatory Measures dated 13.12.2022
Please refer to the document hyperlinked below for a detailed read of the Master Direction.
Source: Reserve Bank of India
