The Credit Information Companies Regulation Act

-The Credit Information Companies (Ragulation) Act of 2005-

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The Credit Information Companies Regulation Act

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The Credit Information Companies (Regulation) Act, 2005

1[NO. 30 OF 2005]
[June 23, 2005]

CONTENTS
Sections

CHAPTER I
PRELIMINARY
1. Short title, extent and commencement
2. Definitions

CHAPTER II
REGISTRATION OF CREDIT INFORMATION COMPANIES
3. Prohibition to commence or carry on business of credit information
4. Application for registration
5. Grant of certificate of registration
6. Power of Reserve Bank to cancel certificate of registration
7. Appeal against order of Reserve Bank
8. Requirement as to minimum capital

CHAPTER III
MANAGEMENT OF CREDIT INFORMATION COMPANIES
9. Management of credit information company
10. Power of Reserve Bank to determine policy
11. Power of Reserve Bank to give directions
12. Inspection of credit information company, credit institution and specified user

CHAPTER IV
AUDITORS
13. Powers and duties of auditors

CHAPTER V
FUNCTIONS OF CREDIT INFORMATION COMPANIES
14. Functions of a credit information company
15. Credit institution to be member of a credit information company
16. Failure to become a member of a credit information company
17. Collection and furnishing of credit information
18. Settlement of dispute

CHAPTER VI
INFORMATION PRIVACY PRINCIPLES AND FURNISHING OF CREDIT INFORMATION
19. Accuracy and security of credit information
20. Privacy principles
21. Alteration of credit information files and credit reports
22. Unauthorised access to credit information

CHAPTER VII
OFFENCES AND PENALTIES
23. Offences and penalties
24. Cognizance of offences
25. Power of Reserve Bank to impose penalty
26. Application of fines

CHAPTER VIII
MISCELLANEOUS
27. Power of Reserve Bank to specify maximum amount of fees
28. Disclosure of information before any court or tribunal or authority
29. Obligations as to fidelity and secrecy
30. Protection of action taken in good faith
31. Bar of jurisdiction
32. Power of Reserve Bank to exempt in certain cases
33. Application of other laws not barred
34. Amendment of certain enactments

  1. Received the assent of the President on June 23, 2005 and published in the Gazette of India, Extra., Part II, Section 1, dated 23rd June, 2005,
    pp. 1-19, No. 33

  1. Removal of difficulties
  2. Power to make rules
  3. Power of Reserve Bank to make regulations

THE SCHEDULE
An Act to provide for regulation of credit information companies and to facilitate efficient distribution of credit and for matters connected therewith or incidental thereto Be it enacted by Parliament in the Fifty-sixth Year of the Republic of India as follows:—

CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.—(1) This Act may be called the Credit Information Companies
(Regulation) Act, 2005.

(2) It extends to the whole of India.

(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint :

Provided that different dates may be appointed for different provisions of this Act, and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

  1. Definitions.—In this Act, unless the context otherwise requires,—
    (a) “board” means the Board of directors of a credit information company;
    (b) “borrower” means any person who has been granted loan or any other credit facility by a credit
    institution and includes a client of a credit institution;
    (c) “client” includes—
    (i) a guarantor or a person who proposes to give guarantee or security for a borrower of a credit
    institution; or
    (ii) a person—
    (A) who has obtained or seeks to obtain financial assistance from a credit institution, by way of
    loans, advances, hire purchase, leasing facility, letter of credit, guarantee facility, venture
    capital assistance or by way of credit cards or in any other form or manner;
    (B) who has raised or seeks to raise money by issue of security as defined in clause (h) of Section
    2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), or by issue of commercial paper, depository receipt or any other instrument;
    (C) whose financial standing has been assessed or is proposed to be assessed by a credit institution or any other person or institution as may, by notification, be directed by the Reserve Bank;
    (d) “credit information” means any information relating to—
    (i) the amounts and the nature of loans or advances, amounts outstanding under credit cards and other
    credit facilities granted or to be granted, by a credit institution to any borrower;
    (ii) the nature of security taken or proposed to be taken by a credit institution from any borrower for
    credit facilities granted or proposed to be granted to him;
    (iii) the guarantee furnished or any other non-fund based facility granted or proposed to be granted by a
    credit institution for any of its borrowers;
    (iv) the creditworthiness of any borrower of a credit institution;
    (v) any other matter which the Reserve Bank may, consider necessary for inclusion in the credit
    information to be collected and maintained by credit information companies, and, specify, by
    notification, in this behalf;
    (e) “credit information company” means a company formed and registered under the Companies Act, 1956
    (1 of 1956) and which has been granted a certificate of registration under sub-section (2) of Section 5;
    (f) “credit institution” means a banking company and includes—
    (i) a corresponding new bank, the State Bank of India, a subsidiary bank, a co-operative bank, the
    National Bank and regional rural bank;
    (ii) a non-banking financial company as defined under clause (f) of Section 45-I of the Reserve Bank
    of India Act, 1934 (2 of 1934);
    (iii) a public financial institution referred to in Section 4-A of the Companies Act, 1956 (1 of 1956);
    (iv) the financial corporation established by a State under Section 3 of the State Financial Corporation
    Act, 1951 (63 of 1951);
    (v) the housing finance institution referred to in clause (d) of Section 2 of the National Housing Bank
    Act, 1987 (53 of 1987);
    (vi) the companies engaged in the business of credit cards and other similar cards and companies
    dealing with distribution of credit in any other manner;
    (vii) any other institution which the Reserve Bank may specify, from time to time, for the purposes of
    this clause;
    (g) “credit scoring” means a system which enables a credit institution to assess the creditworthiness and
    capacity of a borrower to repay his loan and advances and discharge his other obligations in respect of
    credit facility availed or to be availed by him;
    (h) “notification” means a notification published in the Official Gazette of India;
    (i) “prescribed” means prescribed by rules made under this Act;
    (j) “regulations” means regulations made by the Reserve Bank under this Act;
    (k) “Reserve Bank” means the Reserve Bank of India constituted under Section 3 of the Reserve Bank of
    India Act, 1934 (2 of 1934);
    (l) “specified user” means any credit institution, credit information company being a member under subsection
    (3) of Section 15, and includes such other person or institution as may be specified by regulations
    made, from time to time, by the Reserve Bank for the purpose of obtaining credit information from a
    credit information company;
    (m) words and expressions used herein and not defined in this Act but defined in the Reserve Bank of India
    Act, 1934 (2 of 1934) or the Banking Regulation Act, 1949 (10 of 1949) or the Companies Act, 1956 (1
    of 1956) shall have the meanings respectively assigned to them in those Acts.

CHAPTER II
REGISTRATION OF CREDIT INFORMATION COMPANIES
3. Prohibition to commence or carry on business of credit information.—Save as otherwise provided in this Act, no company shall commence or carry on the business of credit information without obtaining a certificate of registration from the Reserve Bank under this Act.
4. Application for registration.—(1) Every company which intends to commence the business of credit
information shall make an application for registration to the Reserve Bank in such form and manner as may be specified by regulations.
(2) Every credit information company, in existence on the commencement of this Act, before the expiry of six months from such commencement, shall apply in writing to the Reserve Bank for obtaining a certificate of registration under this Act :

Provided that in the case of a credit information company in existence on the commencement of this Act,
nothing in Section 3 shall be deemed to prohibit such credit information company from carrying on the business of a
credit information company, until it is granted a certificate of registration or is by notice in writing informed by the
Reserve Bank that a certificate of registration cannot be granted to it.
5. Grant of certificate of registration.—(1) The Reserve Bank may, for the purpose of considering the
application of a company for grant of a certificate of registration to commence or carry on the business of credit
information, require to be satisfied, by an inspection of records or books of such company or otherwise that the
following conditions are fulfilled, namely:—
(a) that the applicant company has minimum capital structure referred to in Section 8;
(b) that the general character of the management or the proposed management of the applicant company
shall not be prejudicial to the interest of its specified users, clients or borrowers, or other credit
information companies;
(c) that any other condition, the fulfilment of which in the opinion of the Reserve Bank, shall be necessary
to ensure that the commencement or carrying on of the business of credit information by the applicant
company shall not be detrimental or prejudicial to the public interest or banking policy or credit system
or its specified users or clients or borrowers or other credit information companies or others who would
provide credit information to the credit information companies.
(2) The Reserve Bank may, after being satisfied that the conditions as referred to in sub-section (1) are fulfilled,
grant a certificate of registration to the applicant company to commence or carry on the business of credit information,
subject to such conditions which it may consider fit to impose and if the company fails to fulfil any of such conditions
or any of the provisions of this Act, the application of the company shall be rejected :
Provided that no application shall be rejected unless the applicant has been given an opportunity of being heard.
(3) The Reserve Bank may, having regard to the available business of credit information, the potential and scope
for expansion of existing credit information companies and other relevant factors, determine the total number of the
credit information companies which may be granted the certificates of registration for carrying on the business of
credit information :
Provided that the total number of such credit information companies so determined may, on being satisfied by
the Reserve Bank, that there is change in available business of credit information, potential and scope for expansion
of existing credit information companies and other relevant factors relating thereto, be reviewed by the Reserve Bank.
6. Power of Reserve Bank to cancel certificate of registration.—(1) The Reserve Bank may cancel a
certificate of registration granted to a credit information company under sub-section (2) of Section 5 if such
company,—
(i) ceases to carry on the business of credit information; or
(ii) has failed to comply with any of the conditions subject to which the certificate of registration has been
granted to it; or
(iii) at any time fails to fulfil any of the conditions referred to in sub-clauses (a) to (c) of sub-section (1) or
sub-section (2) of Section 5; or
(iv) fails—
(a) to comply with the provisions of any law for the time being in force or any direction issued by the
Reserve Bank under the provisions of this Act; or
(b) to submit or offer for inspection its books of account and other relevant documents when so
demanded by the officers, persons or agency referred to in sub-section (1) of Section 12.
(2) Before cancelling the certificate of registration granted to a credit information company under this section on
the ground that the company has failed to comply with the conditions specified in clauses (a) to (c) of sub-section (1)
or sub-section (2) of Section 5 or the provisions of any other law for the time being in force or directions issued under
this Act, the Reserve Bank, shall grant time to such company on such terms as the Reserve Bank may deem
appropriate for taking necessary steps to comply with such directions or provisions or fulfilment of such conditions,
within such time :
Provided that if the Reserve Bank is of the opinion that the delay in cancelling the certificate of registration of
such company shall be prejudicial or detrimental to the public interest or banking policy or credit system or borrowers
or other credit information companies, the Reserve Bank may cancel the certificate of registration without granting
time as provided in sub-section (2).
(3) No order of cancellation of certificate of registration, granted to a credit information company, shall be made
by the Reserve Bank unless such company has been given a reasonable opportunity of being heard.
7. Appeal against order of Reserve Bank.—(1) A credit information company aggrieved by the order of
rejection of an application for grant of certificate of registration under Section 5 or cancellation of certificate of
registration under Section 6, may prefer an appeal to the Central Government or any other authority or tribunal which
may be designated by rules made by the Central Government, within a period of thirty days from the date on which
such order of rejection or cancellation, as the case may be, is communicated to the credit information company.
(2) The decision of the Central Government or the authority or tribunal referred to in sub-section (1) where an
appeal has been preferred to it under sub-section (1), or of these Reserve Bank where no such appeal has been
preferred, shall be final :
Provided that before making any order of rejection of an appeal, the applicant company or the credit information
company, as the case may be, shall be given a reasonable opportunity of being heard.
8. Requirement as to minimum capital.—(1) The authorised capital of every credit information company shall
be a minimum of thirty crores :
Provided that the Reserve Bank may, by notification, increase the minimum amount of authorised capital to any
amount not exceeding fifty crores.
(2) The issued capital of every credit information company shall not be less than twenty crores :
Provided that the Reserve Bank may, by notification, increase the issued capital to any amount not exceeding the
minimum amount of authorised capital as referred to in sub-section (1).
(3) The minimum paid up capital of every credit information company at any time shall not be less than seventy five
per cent of the issued capital.

CHAPTER III
MANAGEMENT OF CREDIT INFORMATION COMPANIES
9. Management of credit information company.—(1) Notwithstanding anything contained in any law for the
time being in force, or in any contract to the contrary, every credit information company in existence on the
commencement of this Act, or which comes into existence thereafter, shall have one of its directors, who may be
appointed on whole-time or on a part-time basis as chairperson of its board, and where he is appointed on whole-time
basis as chairperson of its board, he shall be entrusted with the management of the whole of the affairs of the credit
information company :
Provided that the chairperson of the board of the credit information company shall exercise his powers subject to
the superintendence, control and directions of the board.
(2) Where a chairperson is appointed on a part-time basis, the management of whole of the affairs of the credit
information company shall be entrusted to a managing director or, a whole-time director by whatever name called,
who shall exercise his powers subject to the superintendence, control and directions of the board.
(3) In addition to the chairperson or managing director or whole-time director, by whatever name called, the
board of directors shall consist of not less than fifty per cent directors who shall be persons having special knowledge
in, or practical experience of, the matters relating to public administration, law, banking, finance, accountancy,
management or information technology.
(4) In discharging its functions, the board shall act on business principles and shall have due regard to the
interest of its specified users, credit institutions or the clients or borrowers of credit institutions.
(5) Where the Reserve Bank is satisfied that it is in the public interest or in the interest of banking policy or
credit system of the country, or for preventing the affairs of any credit information company being managed in a
manner detrimental to the interest of banking policy or credit institutions or borrowers or clients or for securing the
proper management of any credit information company, it is necessary so to do, the Reserve Bank may, for reasons to
be recorded in writing, by order published in the Official Gazette, supersede the board of such company, for such
period not exceeding six months, as may be specified in the order and which may be extended from time to time, so,
however, that the total period shall not exceed twelve months :
Provided that before making any such order, the Reserve Bank shall give a reasonable opportunity to the board
of such credit information company to make representation against the proposed supersession and shall consider the
representation, if any, of the board.
(6) The Reserve Bank may, on supersession of the board of a credit information company under sub-section (5),
appoint an Administrator for such period and on such salary and other terms and conditions as it may determine.
(7) The Reserve Bank may issue such directions to the Administrator as it may deem appropriate and the
Administrator shall be bound to follow such directions.
(8) Upon making of the order under sub-section (5), superseding the board of a credit information company—
(a) the chairperson, managing director and other directors of such credit information company shall, as from
the date of supersession, vacate their offices as such;
(b) all the powers, functions and duties which may, by or under the provisions of the Companies Act, 1956
(1 of 1956) or this Act or any other law for the time being in force, be exercised or discharged, by or on
behalf of the board of such credit information company, or by a resolution passed in general meeting of
that company, shall, until the reconstitution of its board under sub-section (10), be exercised and
discharged by the Administrator appointed by the Reserve Bank under sub-section (6) :
Provided that the powers exercised by the Administrator shall be valid notwithstanding that such powers are
exercisable by a resolution passed in the general meeting of such credit information company.
(9) The salary and allowances payable to the Administrator and staff assisting the Administrator shall be borne
by the credit information company.
(10) On and before the expiration of two months before expiry of the period of supersession mentioned in the
order of the Reserve Bank issued under sub-section (5), the Administrator of the credit information company, shall
call a general meeting of the credit information company to elect new directors and reconstitute its board and any
person who had vacated his office under clause (a) of sub-section (8), shall not be deemed to be disqualified for reappointment.
(11) Notwithstanding anything contained in any law for the time being in force or in any contract or the
memorandum or articles of association, of the credit information company, on the removal of a person from office
under this section, that person shall not be entitled to claim any compensation for the loss or termination of office.
10. Power of Reserve Bank to determine policy.—Where the Reserve Bank is satisfied that it is necessary or
expedient in the public interest or in the interest of specified users or in the interest of credit information companies or
credit institutions or clients or borrowers so to do, it may determine the policy in relation to functioning of credit
information companies or credit institutions or specified users generally or in particular and when the policy has been
so determined all credit information companies, credit institutions and specified users, as the case may be, shall be
bound to follow the policy as so determined.
11. Power of Reserve Bank to give directions.—(1) Where the Reserve Bank is satisfied that,—
(a) in the public interest; or
(b) in the interest of credit institutions; or
(c) in the interest of specified users; or
(d) in the interest of banking policy; or
(e) to prevent the affairs of any credit information company being conducted in a manner detrimental to the
interests of its specified users or in a manner prejudicial to the interests of credit institutions or borrowers or clients; or
(f) to secure the proper management of credit information companies generally, it is necessary to issue directions to credit information companies or credit institutions or specified users generally or to any credit information company or credit institution or specified user in particular, it may, from time to time, issue such directions as it deems fit, and such credit information companies, credit institutions and specified users or credit information company, credit institution, and specified user, as the case may be, shall be bound to comply with such directions.
(2) The Reserve Bank may, on representation made to it or on its own motion, modify or cancel any direction
issued under sub-section (1), and the Reserve Bank, in so modifying or cancelling any direction, may impose such
conditions as it thinks fit, subject to which the modification or cancellation shall have effect.
(3) The Reserve Bank may, at any time, if it is satisfied that in the public interest or in the interest of a credit
information company or its members, it is necessary so to do, by order in writing and on such terms and conditions as may be specified therein,—
(a) require such credit information company to call a meeting of its directors for the purpose of considering
any matter relating to or arising out of the affairs of the credit information company;
(b) depute one or more of its officers to watch the proceedings at any meeting of the board of the credit
information company or of any committee or of any other body constituted by it and require the credit
information company to give an opportunity to the officers so deputed to be heard at such meetings and
also require such officers to send a report of such proceedings to the Reserve Bank;
(c) require the board of the credit information company or of any committee or any other body constituted
by it to give in writing to any officer deputed by the Reserve Bank in this behalf at his usual address all
notices of, and other communications relating to, any meeting of the board, committee or other body
constituted by it;
(d) appoint one or more of its officers to observe the manner in which the affairs of the credit information
company or of its offices or branches are being conducted and make a report thereon;
(e) require the credit information company to make, within such time as may be specified in the order, such
changes in the management as the Reserve Bank may consider necessary.
(4) The Reserve Bank may, at any time, direct any credit information company to furnish it within such time as
may be specified by the Reserve Bank, such statements and information relating to the business or affairs of the credit
information company as the Reserve Bank may consider necessary or expedient to obtain for the purpose of this Act.
12. Inspection of credit information company, credit institution and specified user.—(1) Notwithstanding
anything to the contrary contained in Section 235 of the Companies Act, 1956 (1 of 1956), the Reserve Bank, at any
time, may and on being directed so to do by the Central Government shall, cause an inspection to be made, by one or
more of its officers or through such other persons or agency as the Reserve Bank may determine, of any credit
information company or credit institution or specified user and their books and accounts; and the Reserve Bank shall
supply to the credit information company or credit institution or specified user, as the case may be, a copy of its report
on such inspection.
(2) It shall be the duty of every director or other officer or employee of the credit information company, credit
institution and specified user to produce to any officer or person or agency, as the case may be, making an inspection
under sub-section (1) all such books, accounts and other documents in his custody or power and to furnish him with
any statement and information relating to the affairs of such credit information company, credit institution and
specified user, as the said officer or person or agency may require of him within such time as the said officer or
person or agency may specify.
(3) Any officer of the Reserve Bank or person or an agency making an inspection under sub-section (1) may
examine on oath any director or other officer or employee of the credit information company, credit institution and
specified user, in relation to their business, and may administer an oath accordingly.
(4) The expenses of, or incidental to, the inspection under sub-section (1) by any person or an agency referred to
in sub-section (1) shall be borne by the concerned credit information company or credit institution or specified user,
as the case may be.

CHAPTER IV
AUDITORS
13. Powers and duties of auditors.—(1) It shall be the duty of an auditor of a credit information company to
inquire whether or not the credit information company has furnished to the Reserve Bank such statements,
information or particulars relating to its business as are required to be furnished under this Act and the auditor shall,
except where he is satisfied on such inquiry that the credit information company has furnished such a statement ,
information or particulars, make a report to the Reserve Bank in this regard.
(2) The Reserve Bank may, on being satisfied that it is necessary so to do, in the public interest or in the interest
of credit system, issue directions in particular or in general with respect to audit of the credit information company
and submission of the report to the Reserve Bank.
(3) Where the Reserve Bank is of the opinion that it is necessary so to do in the public interest or in the interest
of the credit information company or its members, or in the interest of credit system or credit institution or its
borrower or client so to do, it may, at any time, by an order, direct that a special audit of the accounts of the credit
information company in relation to any such transaction or class of transactions or for such period or periods, as may
be mentioned in the order, shall be conducted and the Reserve Bank may by such order or by a separate order either
appoint an auditor or auditors or direct the auditor of the credit information company himself to conduct such special
audit and the auditor shall comply with such directions and make a report of such audit to the Reserve Bank and
forward a copy thereof to the credit information company.
(4) The remuneration of the auditors as may be fixed by the Reserve Bank, having regard to the nature and
volume of work involved in the audit and the expenses of, or incidental to, the audit, shall be borne by the credit
information company so audited.

CHAPTER V
FUNCTIONS OF CREDIT INFORMATION COMPANIES
14. Functions of a credit information company.—(1) A credit information company may engage in any one or
more of the following forms of business, namely:—
(a) to collect, process and collate information on trade, credit and financial standing of the borrowers of the
credit institution which is a member of the credit information company;
(b) to provide credit information to its specified users or to the specified users of any other credit
information company or to any other credit information company being its member;
(c) to provide credit scoring to its specified users or specified users of any other credit information company
or to other credit information companies being its members;
(d) to undertake research project;
(e) to undertake any other form of business which the Reserve Bank may, specify by regulations as a form
of business in which it is lawful for a credit information company to engage.
(2) No credit information company shall engage in any form of business other than those referred to in subsection
(1).
(3) Any credit information company for the purposes of carrying on the business of credit information may—
(a) register credit institutions and other credit information companies, at their option as its member, subject
to such terms and conditions as may be pre-determined and disclosed by such credit information
company;
(b) charge such reasonable amount of fees, as it may deem appropriate not exceeding the maximum fee, as
may be specified under Section 27, for furnishing credit information to a specified user;
(c) generally to do all such other acts and perform such other functions as are necessary to facilitate proper
conduct of its affairs, business and functions in accordance with the provisions of this Act.
15. Credit institution to be member of a credit information company.—(1) Every credit institution in
existence on the commencement of this Act, before the expiry of three months from such commencement or within
such extended period, as the Reserve Bank may allow on its application and subject to being satisfied about the reason
for extension, shall become member of at least one credit information company.
(2) Every credit institution which comes into existence after the commencement of this Act, before the expiry of
three months from its coming into existence, or within such extended period, as the Reserve Bank may allow on its
application and subject to being satisfied about the reason for extension, shall become member of at least one credit
information company.
(3) A credit information company may, at its option, become member of another credit information company.
(4) No credit information company shall refuse to register a credit institution or another credit information
company as its member without providing reasonable opportunity of being heard to such credit institution or credit
information company, whose application it proposes to reject and recording reasons for such rejection and a copy of
such order of rejection shall be forwarded to the Reserve Bank.
(5) A credit institution or credit information company aggrieved by the order of rejection of its application for its
registration as a member of a credit information company under sub-section (4) may prefer an appeal to the Reserve
Bank, within a period of thirty days from the date on which such order of rejection was communicated to it :
Provided that the Reserve Bank may, if it is satisfied that the appellant was prevented by sufficient cause from
filing the appeal within the said period, allow it to be filed within a further period not exceeding thirty days.
(6) On receipt of an appeal under sub-section (5), the Reserve Bank, after giving the appellant and other
concerned parties, an opportunity of being heard, pass such order as it deems fit.
(7) The decision of the Reserve Bank where an appeal has been preferred to it under sub-section (5) shall be
final and the order of the credit information company under sub-section (4) shall be final after the expiry of the said
period of thirty days where no appeal has been preferred under that sub-section to the Reserve Bank.
(8) Every specified user shall be entitled to obtain credit information for its use from the credit information
company of which such specified user is a member.
16. Failure to become a member of a credit information company.—(1) Where a credit institution—
(a) abstains from becoming a member of at least one credit information company; or
(b) at any time is not a member of any credit information company,
the Reserve Bank suo moto or on a complaint from a credit information company may, direct such credit institution to
take necessary steps within such time, as it may specify to become a member of a credit information company.
(2) In case a credit institution fails to comply with the directions of the Reserve Bank under sub-section (1), to
become member of at least one credit information company, the Reserve Bank may, without prejudice to the
provisions of this Act, intimate such failure to any other authority for taking such action as it may deem fit.
17. Collection and furnishing of credit information.—(1) A credit information company or any person
authorised in that behalf by the company may, by notice in writing, in such form, as may be specified by regulations
made by the Reserve Bank or as near thereto, require its members being credit institution or credit information
company, to furnish such credit information as it may deem necessary in accordance with the provisions of this Act.
(2) Every credit institution which is member of the credit information company and every credit information
company which is a member of other credit information company shall, on receipt of notice under sub-section (1),
provide credit information to the credit information company of which it is a member, within such period as may be
specified in the notice.
(3) Every credit information company shall provide for such purpose, as may be specified by regulations, the
credit information received under sub-section (2), to its specified user on receipt of request from him in accordance
with the provisions of this Act and directions issued thereunder by the Reserve Bank from time to time in this behalf.
(4) No credit information received under this Act,—
(a) by the credit information company, shall be disclosed to any person other than its specified user; or
(b) by the specified user, shall be disclosed to any other person;
(c) by the credit information company or specified user, shall be disclosed for any other purpose than as
permitted or required by any other law for the time being in force.
18. Settlement of dispute.—(1) Notwithstanding anything contained in any law for the time being in force, if
any dispute arises amongst, credit information companies, credit institutions, borrowers and clients on matters relating
to business of credit information and for which no remedy has been provided under this Act, such disputes shall be
settled by conciliation or arbitration as provided in the Arbitration and Conciliation Act, 1996 (26 of 1996), as if the
parties to the dispute have consented in writing for determination of such dispute by conciliation or arbitration and
provisions of that Act shall apply accordingly.
(2) Where a dispute has been referred to arbitration under sub-section (1), the same shall be settled or
decided,—
(a) by the arbitrator to be appointed by the Reserve Bank;
(b) within three months of making a reference by the parties to the dispute :
Provided that the arbitrator may, after recording the reasons therefor, extend the said period up to a maximum
period of six months :
Provided further that, in an appropriate case or cases, the Reserve Bank may, if it considers necessary to do so
(reasons to be recorded in writing), direct the parties to the dispute to appoint an arbitrator in accordance with the
provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996), for settlement of their dispute in accordance
with the provisions of that Act.
(3) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26
of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement
or decision under the provisions of the Arbitration and Conciliation Act, 1996.

CHAPTER VI
INFORMATION PRIVACY PRINCIPLES AND
FURNISHING OF CREDIT INFORMATION
19. Accuracy and security of credit information.—A credit information company or credit institution or
specified user, as the case may be, in possession or control of credit information, shall take such steps (including
security safeguards) as may be prescribed, to ensure that the data relating to the credit information maintained by them
is accurate, complete, duly protected against any loss or unauthorised access or use or unauthorised disclosure thereof.
20. Privacy principles.—Every credit information company, credit institution and specified user, shall adopt the
following privacy principles in relation to collection, processing, collating, recording, preservation, secrecy, sharing
and usage of credit information, namely:—
(a) the principles—
(i) which may be followed by every credit institution for collection of information from its borrowers
and clients and by every credit information company, for collection of information from its
member credit institutions or credit information companies, for processing, recording, protecting
the data relating to credit information furnished by, or obtained from, their member credit
institutions or credit information companies, as the case may be, and sharing of such data with
specified users;
(ii) which may be adopted by every specified user for processing, recording, preserving and protecting
the data relating to credit information furnished, or received, as the case may be, by it;
(iii) which may be adopted by every credit information company for allowing access to records
containing credit information of borrowers and clients and alteration of such records in case of
need to do so;
(b) the purpose for which the credit information may be used, restriction on such use and disclosure thereof;
(c) the extent of obligation to check accuracy of credit information before furnishing of such information to
credit information companies or credit institutions or specified users, as the case may be;
(d) preservation of credit information maintained by every credit information company, credit institution,
and specified user as the case may be (including the period for which such information may be
maintained, manner of deletion of such information and maintenance of records of credit information);
(e) networking of credit information companies, credit institutions and specified users through electronic
mode;
(f) any other principles and procedures relating to credit information which the Reserve Bank may consider
necessary and appropriate and may be specified by regulations.
21. Alteration of credit information files and credit reports.—(1) Any person, who applies for grant or
sanction of credit facility, from any credit institution, may request to such institution to furnish him a copy of the
credit information obtained by such institution from the credit information company.
(2) Every credit institution shall, on receipt of request under sub-section (1), furnish to the person referred to in
that sub-section a copy of the credit information subject to payment of such charges, as may be specified by
regulations, by the Reserve Bank in this regard.
(3) 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; whether by making an appropriate correction, or addition or otherwise, 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 :
Provided further that no such correction, deletion or addition shall be made in the credit information if any
dispute relating to such correction, deletion or addition is pending before any arbitrator or tribunal or court and in
cases where such dispute is pending, the entries in the books of the concerned credit institution shall be taken into
account for the purpose of credit information.
22. Unauthorised access to credit information.—(1) No person shall have access to credit information in the
possession or control of a credit information company or a credit institution or a specified user unless the access is
authorised by this Act or any other law for the time being in force or directed to do so by any court or tribunal and any
such access to credit information without such authorisation or direction shall be considered as an unauthorised access
to credit information.
(2) Any person who obtains unauthorised access to credit information as referred to in sub-section (1) shall be
punishable with fine which may extend to one lakh rupees in respect of each offence and if he continues to have such
unauthorised access, with further fine which may extend to ten thousand rupees for every day on which the default
continues and such unauthorised credit information shall not be taken into account for any purpose.

CHAPTER VIII
OFFENCES AND PENALTIES
23. Offences and penalties.—(1) Whoever, in any return or other document or in any information required or
furnished by, or under, or for the purposes of, any provision of this Act, wilfully makes a statement which is false in
any material particular, knowing it to be false, or wilfully omits to make a material statement, shall be punishable with
imprisonment for a term which may extend to one year and shall also be liable to fine.
(2) Every credit information company or a credit institution or any specified user, wilfully, performing any act or
engaging in any practice, in breach of any of the principles referred to in Section 20, shall be punishable with fine not
exceeding one crore rupees.
(3) Any credit information company or credit institution or specified user wilfully providing to any other credit
information company or credit institution or specified user or borrower or client, as the case may be, credit
information which is false in any material particular, knowing it to be false, or wilfully omits to make a material
statement, shall be punishable with fine which may extend to one crore rupees.
(4) Any person who contravenes any provision of this Act or of any rule or order made thereunder, or obstructs
the lawful exercise of any power conferred by or under this Act, or makes default in complying with any requirement
of this Act or of any rule or order made or direction issued thereunder, shall, if no specific provision is made under
this Act for punishment of such contravention, obstruction or default, be punishable with fine which may extend to
one lakh rupees and where a contravention or default is a continuing one, with a further fine which may extend to five
thousand rupees for every day during which the contravention or default continues.
(5) Where a contravention or default has been committed by a credit information company or credit institution
or specified user, as the case may be, every person who, at the time the contravention or default was committed, was
in charge of, and was responsible to the credit information company or credit institution or specified user for the
conduct of its business, shall be deemed to be guilty of the contravention or default and shall be liable to be proceeded
against and punished accordingly :
Provided that nothing contained in this sub-section shall render any such person liable to any punishment
provided in this Act if he proves that the contravention or default was committed without his knowledge or that he
exercised all due diligence to prevent the contravention or default.
(6) Notwithstanding anything contained in sub-section (5), where a contravention or default has been committed
by a credit information company or credit institution or specified user, as the case may be, and it is proved that the
same was committed with the consent or connivance of, or is attributable to any gross negligence on the part of its
chairperson, managing director, any other director, manager, secretary or other officer of the credit information
company or the credit institution, such chairperson, managing director, any other director, manager, secretary or other
officer shall also be deemed to be guilty of that contravention or default and shall be liable to be proceeded against
and punished accordingly.
Explanation.—For the purposes of this section,—
(a) “company” means any body corporate and includes a firm or other association of individual, and
(b) “director”, in relation to a firm, means a partner in the firm.
24. Cognizance of offences.—(1) No court shall take cognizance of any offence committed by a member of a
credit information company and punishable under Section 23 except upon a complaint in writing made by an officer
of the credit information company generally or specially authorised in writing in this behalf by the credit information
company or if so directed by the Reserve Bank so to do and no court other than that of a Metropolitan Magistrate or a Judicial Magistrate of the first class or any court superior thereto shall try any such offence.
Explanation.—For the purposes of this sub-section, “member of a credit information company” shall mean a
member referred to in Section 15.
(2) No court shall take congizance of any offence committed by a credit information company punishable under
Section 23 except upon a complaint in writing made by an officer of the Reserve Bank generally or specially
authorised in writing in this behalf by the Reserve Bank and no court other than that of a Metropolitan Magistrate or a Judicial Magistrate of the first class or any court superior thereto shall try any such offence.
25. Power of Reserve Bank to impose penalty.—(1) Notwithstanding anything contained in Section 23, if a
contravention or default of the nature referred to in sub-section (2) of Section 22 or sub-section (2) or sub-section (3) or sub-section (4) of Section 23, as the case may be, is made by a credit information company or a credit institution then, the Reserve Bank may impose on such credit information company or credit institution—
(i) where the contravention is of the nature referred to in sub-section (2) of Section 22, a penalty not
exceeding one lakh rupees;
(ii) where the contravention is of the nature referred to in sub-section (2) or sub-section (3) of Section 23, a
penalty not exceeding one crore rupees;
(iii) where the contravention is of the nature referred to in sub-section (4) of Section 23, a penalty not
exceeding one lakh rupees and where such contravention or default is continuing one, a further penalty
which may extend to five thousand rupees for every day, after the first, during which the contravention
or default continues.
(2) For the purpose of adjudging the penalty under sub-section (1), the Reserve Bank shall serve notice on credit
information company or credit institution or specified user, as the case may be, requiring it to show cause as to why
the amount mentioned in the notice should not be imposed as penalty and a reasonable opportunity of being heard
shall also be given to such credit information company or credit institution or specified user, as the case may be.
(3) No complaint shall be filed against credit information company or credit institution or specified user, as the
case may be, in any court of law in respect of any contravention or default in respect of which any penalty has been
imposed by the Reserve Bank under this section.
(4) Any penalty imposed by the Reserve Bank under this Act shall be payable within a period of fourteen days
from the date on which notice issued by the Reserve Bank demanding payment of the sum is served on the credit
information company or credit institution or specified user, as the case may be, and in the event of failure of such
credit information company or credit institution or specified user to pay the sum within such period, may be levied on
a direction made by the principal civil court having jurisdiction in the area where the registered office of the credit
information company or credit institution or specified user, being a company, is situated and in case of credit
institution incorporated outside India, where its principal place of business in India is situated :
Provided that such direction under this sub-section shall be made only upon an application made in this behalf
to the court by the Reserve Bank.
(5) The court which makes a direction under sub-section (4) shall issue a certificate mentioning therein the sum
payable by a credit information company or credit institution or specified user, as the case may be, and every such
certificate shall be enforceable in the same manner as if it were a decree made by the court in a civil suit.
(6) Where any complaint has been filed against credit information company or credit institution or specified
user, as the case may be, in any court in respect of the contravention or default of the nature referred to in sub-section
(2) of Section 22 or sub-section (2) or sub-section (3) or sub-section (4) of Section 23, then, no proceedings for the
imposition of any penalty on the credit information company or credit institution or specified user shall be taken under
this section.
26. Application of fines.—A court imposing any fine under this Act may direct that the whole or any part
thereof shall be applied in or towards payment of the costs of the proceedings, or for such purposes as may be directed
by the court.

CHAPTER VIII
MISCELLANEOUS
27. Power of Reserve Bank to specify maximum amount of fees.—The Reserve Bank may, specify, by
regulations the maximum amount of fees leviable under sub-section (3) of Section 14 for providing information to the
specified users and for admissions of credit institutions or credit information companies as a member of a credit
information company.
28. Disclosure of information before any court or tribunal or authority.—No chairperson, director, member,
auditor, adviser, officer or other employee or agent employed in the business of a credit information company or in
the business of a specified user shall, except for the purposes of this Act or when required to do so by any other law in
force or court or tribunal or authority, disclose any information to any person.
29. Obligations as to fidelity and secrecy.—(1) Every credit information company shall observe, except as
otherwise required by law, the practices and usages customary among credit information companies and it shall not
divulge any information relating to, or to the affairs of, its members or specified users.
(2) Every chairperson, director, member, auditor, adviser, officer or other employee of a credit information
company shall, before entering upon his duties, make a declaration of fidelity and secrecy in the form, as may be
prescribed in this regard.
Explanation.—For the purposes of this section and Section 30, the terms “practices and usages customary”
means such practices and usages which, are generally followed by credit information companies or may develop in
due course in relation to their functions, in pursuance of the provisions of this Act, rules and regulations made and
directions issued thereunder from time to time in pursuance thereof.
30. Protection of action taken in good faith.—(1) No suit or other legal proceedings or prosecution shall lie
against the Reserve Bank or the Central Government or credit information company or credit institution, or their
chairperson, director, member, auditor, adviser, officer or other employee, or agent or any person authorised by the
Reserve Bank or the Central Government or credit information company or credit institution to discharge any function
under this Act, for any loss or damage caused or as is likely to be caused by anything which is in good faith done or
intended to be done, in pursuance of this Act or any other law for the time being in force.
(2) Nothing contained in sub-section (1) shall affect the right of any person to claim damages against a credit
information company, a credit institution or their chairperson, director, member, auditor, adviser, officer or other
employee or agents, as the case may be, in respect of loss caused to him on account of any such disclosure made by
anyone of them and which is unauthorised or fraudulent or contrary to provisions of this Act, or practices or usages
customary among them.
31. Bar of jurisdiction.—No court or authority shall have, or be entitled to exercise, any jurisdiction, powers or
authority, except the Supreme Court and a High Court exercising jurisdiction under Articles 32, 226 and 227 of the
Constitution, in relation to the matters referred to in Sections 4, 5, 6, 7 and 18.
32. Power of Reserve Bank to exempt in certain cases.—(1) The Central Government may, on the
recommendation of the Reserve Bank, by notification in the Official Gazette, direct that any or all of the provisions of
this Act shall not apply to any credit information company or a credit institution, as the case may be, either generally
or for such period and subject to such exceptions or modifications, as may be mentioned in that notification.
(2) A copy of every notification proposed to be issued under sub-section (1), shall be laid in draft before each
House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or
in two or more successive sessions, and if, before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in
making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued
only in such modified form as may be agreed upon by both the Houses.
33. Application of other laws not barred.—The provisions of this Act shall be in addition to, and not, save as
provided under this Act, in derogation of, the provisions of the Companies Act, 1956 (1 of 1956) or any other law for
the time being in force.
34. Amendment of certain enactments.—The enactments mentioned in the Schedule to this Act shall be
amended in the manner specified therein.
35. Removal of difficulties.—(1) If any difficulty arises in giving effect to the provisions of this Act, the
Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the
provisions of this Act as appear to it to be necessary or expedient for removing the difficulty :
Provided that no order shall be made under this section after the expiry of a period of two years from the
commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of
Parliament.
36. Power to make rules.—(1) The Central Government may, after consultation with the Reserve Bank, by
notification in the Official Gazette, make rules to carry out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing powers, such rules may provide for all
or any of the following matters, namely:—
(a) the authority or tribunal which may be designated under sub-section (1) of Section 7;
(b) the steps to be taken by every credit information company or credit institution and specified user for
ensuring accuracy, completeness of data and protection of data from any loss or unauthorised access or
use or disclosure under Section 19;
(c) the form in which a declaration of fidelity and secrecy shall be made under sub-section (2) of Section 29;
(d) any other matter which is required to be, or may be, prescribed.
(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is made,
before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in
one session or in two or more successive sessions, and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses
agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no
effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule.
37. Power of Reserve Bank to make regulations.—(1) The Reserve Bank may make regulations consistent
with the provisions of this Act and the rules made thereunder to carry out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing powers, such regulations may provide
for all or any of the following matters, namely:—
(a) the persons or institutions which may be specified as specified users under clause (1) of Section 2;
(b) the form in which application may be made under sub-section (1) of Section 4 and the manner of filing
such application under that sub-section;
(c) any other form of business in which a credit information company may engage under clause (e) of subsection
(1) of Section 14;
(d) the form of notice for collection and furnishing of information procedure relating thereto and purposes
for which credit information may be provided under sub-sections (1) and (2) of Section 17;
(e) the principles and procedures relating to credit information which may be specified under clause (f) of
Section 20;
(f) the amount which may be required to be paid for obtaining copy of credit information under sub-section
(2) of Section 21;
(g) the maximum amount of charges payable under Section 27.
(3) Every regulation, as soon as may be after it is made by the Reserve Bank, shall be forwarded to the Central
Government and that Government shall cause a copy of the same to be laid before each House of Parliament, while it
is in session, for a total period of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session or the successive sessions
aforesaid, both Houses agree in making any modification in the regulation, or both Houses agree that the regulation
should not be made, the regulation shall, thereafter, have effect only in such modified form or be of no effect, as the
case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of
anything previously done under that regulation.

THE SCHEDULE
(See Section 34)
AMENDMENTS TO CERTAIN ENACTMENTS
Part I
The Reserve Bank of India Act, 1934
(2 of 1934)
Section 45-E, sub-section (2), after clause (c), insert—
“(d) the disclosures of any credit information under the Credit Information Companies (Regulation) Act, 2005.”.
Part II
The Banking Regulation Act, 1949
(10 of 1949)
1. Section 19, after sub-section (3), insert—
“(4) Save as provided in clause (c) of sub-section (1), a banking company may form a subsidiary company to carry on the
business of credit information in accordance with the Credit Information Companies (Regulation) Act, 2005.”.
2. Section 28, for “publish any information obtained by them under this Act in such consolidated form as they think fit”, substitute—
“publish—
(a) any information obtained by them under this Act in such consolidated form as they think fit;
(b) in such manner as they may consider proper, any credit information disclosed under the Credit Information
Companies (Regulation) Act, 2005.”.
Part III
The State Financial Corporation Act, 1951
(63 of 1951)
Section 40, after sub-section (3), insert—
“(4) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part IV
The State Bank of India Act, 1955
(23 of 1955)
Section 44, after sub-section (2), insert—
“(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part V
The State Bank of India (Subsidiary Banks) Act, 1959
(38 of 1959)
Section 52, after sub-section (2), insert—
“(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part VI
The Deposit Insurance and Credit Guarantee Corporation Act, 1961
(47 of 1961)
Section 39, after sub-section (2), insert—
“(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part VII
The State Agricultural Credit Corporations Act, 1968
(60 of 1968)
Section 40, insert—
“Provided that nothing contained in this section shall apply to the credit information disclosed under the Credit Information
Companies (Regulation) Act, 2005.”.
Part VIII
The Banking Companies (Acquisition and Transfer
of Undertakings) Act, 1970
(5 of 1970)
Section 13, after sub-section (3), insert—
“(4) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part IX
The Banking Companies (Acquisition and Transfer
of Undertakings) Act, 1980
(40 of 1980)
Section 13, after sub-section (3), insert—
“(4) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part X
The Export-Import Bank of India Act, 1981
(28 of 1981)
Section 30, after sub-section (3), insert—
“(4) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part XI
The National Bank for Agriculture and Rural Development Act, 1981
(61 of 1981)
Section 51, after sub-section (2), insert—
“(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part XII
The Public Financial Institutions (Obligation as
to Fidelity and Secrecy) Act, 1983
(48 of 1983)
Section 3, after sub-section (2), insert—
“(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part XIII
The National Housing Bank Act, 1987
(53 of 1987)
Section 44, after sub-section (2), insert—
“(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
Part XIV
The Regional Rural Banks Act, 1976
(21 of 1976)
Section 25, after sub-section (2), insert—
“(3) Nothing contained in this section shall apply to the credit information disclosed under the Credit Information Companies
(Regulation) Act, 2005.”.
———

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