RBI Asset Reconstruction Companies (ARC) Circular

RBI has issued guidelines vide its circular, which shall be applicable to all Asset Reconstruction Companies [ARC] : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12740&Mode=0 

As per the circular, ARCs had been advised to become a member of at least one Credit Information Companies [CIC]. In order to align these guidelines with the guidelines applicable to banks and NBFCs and with a view to maintain a track of borrowers’ credit history after transfer of loans by banks and NBFCs to ARCs, these guidelines have been revised as detailed in the said circular. 

The circular also outlines the adoption of best practices which include a standard operating procedure (SOP) in place for CIC related matters which shall, inter alia, include the following best practices: 

1. ARCs shall provide requisite customer information, including identifier information, to CICs. 

2. 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. 

3. Instances of non-updation of repayment information may be avoided by centralising the issue of no-objection certificates and providing information to CICs. 

4. ARCs shall appoint a nodal officer for dealing with CICs. 

5. Customer grievance redressal shall be given top priority especially in respect of complaints relating to updation/ alteration of credit information. 

6. Grievance redressal in respect of credit information should be integrated with the existing systems, if any, for grievance redressal. 

7. ARCs should abide by the period stipulated under CICRA and the Rules and Regulations framed thereunder in respect of updation, alteration of credit information, resolving disputes, etc. Procedure prescribed under Rules 20 and 21 of the Credit Information Companies Rules, 2006 in this regard should be adhered to. Deviations from stipulated time limits should be monitored and commented upon in the periodical reports/ reviews put up to the Board. 

ARCs have been asked to put in place system and processes to ensure compliance with these guidelines latest by January 1, 2025.