The Reserve Bank of India on Thursday introduced new guidelines for Asset Reconstruction Companies (ARCs), requiring them to submit borrower credit data to all Credit Information Companies (CICs).
The four CICs in India include Credit Information Bureau (India) Limited (CIBIL), Equifax Credit Information Services Private Limited, Experian Credit Information Company of India Private Limited, and CRIF High Mark.
This step is to align ARCs with the same reporting standards followed by banks and Non-Banking Financial Companies (NBFCs).
The updated guidelines make it mandatory for ARCs to become members of all CICs and report credit data in the Uniform Credit Reporting Format prescribed by the RBI. This is a shift from the previous rule where ARCs only had to be members of one CIC.
To ensure timely updates, ARCs are required to submit borrower information to CICs every fortnight. These regular updates must commence by January 1, 2025, ensuring that borrowers’ credit profiles remain current and reflect any changes in their repayment behavior.
Additionally, if CICs find any errors or reject data submissions, ARCs must correct and resubmit the information within seven days.
The RBI has also advised ARCs to follow best practices, which include, appointing a nodal officer to oversee CIC-related matters, centralising the issuance of No-Objection Certificates (NOCs) for borrowers who have completed loan repayments, and prioritising customer grievance redressal.
ARCs are expected to fully comply with these regulations latest by the January 2025 deadline.
