RBI asks ARCs to become members of all credit information companies

The Reserve Bank of India (RBI) on Thursday asked the asset reconstruction companies (ARCs) to become members of all the credit information companies (CICs) and submit the required data to them as per the Uniform Credit Reporting Format.

Currently, there are four CICs—TransUnion CIBIL, Experian, Equifax, and CRIF High Mark.

As per the circular, RBI said, “ARCs shall become members of all CICs and submit the requisite data to CICs as per the Uniform Credit Reporting Format prescribed by the Reserve Bank, as amended from time to time.”

The apex bank said that it has decided to align the norms for ARCs with the guidelines applicable to banks and non-banking financial companies (NBFCs) in order to maintain a track of borrowers' credit history after the transfer of loans by banks and NBFCs to ARCs.

ARCs shall keep the information collected or maintained by them, updating it regularly on a fortnightly basis or at similar short intervals as mutually agreed upon between the ARC and the CIC.

ARCs are also asked to rectify the rejected data received from CICs and upload the same with the CICs within seven days of receiving such data.

RBI also said that ARCs must have a standard operating procedure (SOP) in place for CIC-related matters, which shall provide requisite customer information, including identifier information, to CICs.

ARCs shall ensure that the records submitted to CICs are updated regularly and that no instances of repayment, including that of the last instalment, are left unreported. Non-updation of repayment information may be avoided by ARCs by centralising the issue of no-objection certificates and providing information to CICs.

ARCs have also been asked to appoint a nodal officer for dealing with CICs. Customer grievance redressal shall be given top priority, especially in respect of complaints relating to the updation or alteration of credit information. Grievance redressal in respect of credit information should be integrated with the existing systems, if any, for grievance redressal.

RBI has asked the ARCs to put in place a system and processes to ensure compliance with these guidelines by January 1, 2025.