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    Question

    Under Section 17 of the Credit Information Companies

    (Regulation) Act, 2005, a borrower, X, requests correction of inaccurate credit information maintained by a Credit Information Company (CIC) following a data entry error by the lending bank. X's correction request is based on documentary evidence proving the inaccuracy. The CIC receives the request but does not receive the corrected information from the lending bank within 30 days. Which of the following correctly determines the obligations and remedies?
    A The CIC can unilaterally correct the credit information in its database if the borrower provides documentary evidence, without waiting for the lending bank's certification Correct Answer Incorrect Answer
    B The CIC cannot make corrections to credit information unless the correction has been certified as correct by the concerned credit institution, even if the borrower provides documentary evidence; however, the borrower is entitled to compensation of â‚ą100 per day after 30 days of delay Correct Answer Incorrect Answer
    C The CIC is not obligated to process correction requests; all corrections must be requested directly with the lending bank, and the CIC plays no role in rectification Correct Answer Incorrect Answer
    D The CIC can share the correction request with other specified users even before the lending bank certifies the correction, to update their records preemptively Correct Answer Incorrect Answer
    E The borrower must file a separate complaint with the Reserve Bank to enforce correction; the CIC has no statutory duty to ensure timely rectification Correct Answer Incorrect Answer

    Solution

    Explanation: Section 17(3) of the CICRA, 2005 provides: "If a credit information company or specified user or credit institution in possession or control of the credit information, has not updated the information maintained by it, a borrower or client may request all or any of them to update the information...and on such request the credit information company or the specified user or the credit institution, as the case may be, shall take appropriate steps to update the credit information within thirty days after being requested to do so: Provided that the credit information company and the specified user shall make the correction, deletion or addition in the credit information only after such correction, deletion or addition has been certified as correct by the concerned credit institution." This provision creates a critical restriction: CICs cannot unilaterally correct data; certification by the lending bank is mandatory. However, the RBI Master Directions on CICs (2024) establish a compensation mechanism: "Complainants shall be entitled to compensation of â‚ą100 per calendar day in case their complaint is not resolved within a period of thirty (30) calendar days from the date of initial filing." Thus, while the CIC cannot correct without bank certification, the borrower receives compensation for delay. Option (B) correctly applies both provisions

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