New CIBIL Score Guidelines by RBI: Stricter Rules to Ensure Transparency and Protect Consumers

In response to growing consumer complaints in the banking sector, the Reserve Bank of India (RBI) has introduced stricter guidelines regarding CIBIL scores, aimed at enhancing transparency and curbing arbitrary practices by banks and NBFCs. These new rules will take effect from the 1st of the upcoming month.

Let’s break down the new regulations and understand how they benefit customers:


🔍 1. Mandatory Notification for CIBIL Score Checks

Banks, NBFCs, or any credit institution must inform customers via email or SMS whenever their credit score is accessed.
Previously, this was done without any prior or post-notification, leaving consumers unaware of when and why their score was viewed.


2. Clear Justification Required for Application Rejection

If a credit request—be it for a loan, credit card, or other product—is rejected, the institution must now provide the exact reason for the rejection.
This helps consumers understand their shortcomings and take corrective steps to improve their credit standing.


📄 3. One Free Full Credit Report Annually

As per RBI’s mandate, credit bureaus must provide customers one free comprehensive credit report each year.
Additionally, a direct link for accessing this report must be clearly available on their websites to make it user-friendly.


⚠️ 4. Advance Notice Before Declaring Default

Financial institutions can no longer label a customer as a defaulter without prior notice.
They are required to inform the customer in advance and must also appoint nodal officers to handle such disputes and ensure fair resolution.


🕐 5. Time-bound Complaint Resolution

If a consumer files a complaint related to their credit score:

  • Banks must resolve it within 21 days, or
  • Credit bureaus must act within 9 days.

Failure to comply will result in a daily penalty of ₹100 on the defaulting institution until the issue is resolved.


🌐 6. Mandatory Disclosure of Complaint Statistics

RBI has instructed banks and credit bureaus to publish real-time data on the number, type, and status of complaints received on their websites.
Neglecting this directive or failing to address complaints may invite strict regulatory action from RBI.


Conclusion

These revised RBI regulations aim to promote a transparent, accountable, and consumer-friendly credit environment.
By empowering customers and enforcing accountability, the new rules are expected to enhance trust in the credit evaluation process and reduce unnecessary complications related to CIBIL scores.

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