The Reserve Bank of India (RBI) will bring the Credit Information Companies (CIC) under the RBI Integrated Ombudsman Scheme.

The move comes in the wake of rising complaints on delays in rectifying and updating credit reports. This hampers the credit scores of borrowers and makes it difficult for them to tap fresh loans.

The CICs could be penalised for delays in updating credit information. Bringing them under the ombudsman would also limit the indiscriminate use of customer data by lenders.

"The CICs have been brought under the aegis of the Reserve Bank Integrated Ombudsman Scheme (RB-IOS)," the regulator said in a statement. "It is also proposed to put in place a compensation mechanism for delayed updation and rectification of credit information."

The regulator said there will also be a provision for SMS and email alerts to customers when their credit information is accessed from CICs. 

A time frame for ingestion of data received by CICs from Credit Institutions (CIs) and disclosures relating to the number and nature of customer complaints received on the website of CICs will also be put in place.

Most of the loans and their pricing is decided on credit scores and if the credit reports are not updated the interest cost on fresh loans go up. Banks also deny loans if the credit scores are low.  

RBI is thus planning to put in place a comprehensive framework for strengthening and improving the efficacy of the grievance redressal mechanism and customer service provided by CIs and CICs.