Module: | Priority Sector, Consumer Protection & Digital Lending
Q100: Which of the following statements regarding Customer Service and Best Practices for Credit Institutions are correct?
1. Credit Institutions must send alerts via SMS or email to customers regarding defaults or 'days past due' (DPD).
2. Any change in the nodal official for grievance redressal must be intimated to the CICs within five calendar days.
3. Loan applications from first-time borrowers may be rejected solely due to the absence of credit history.
4. Credit Institutions must inform customers of the specific reasons for the rejection of their data correction requests.
Which of the statements given above is/are correct?
2. Any change in the nodal official for grievance redressal must be intimated to the CICs within five calendar days.
3. Loan applications from first-time borrowers may be rejected solely due to the absence of credit history.
4. Credit Institutions must inform customers of the specific reasons for the rejection of their data correction requests.
Which of the statements given above is/are correct?
✅ Correct Answer: A
The correct answer is A. Statements 1, 2, and 4 are mandatory measures to enhance transparency and responsiveness.
Customers must be alerted to negative changes, nodal contact details must remain current (5-day update rule), and rejection reasons must be disclosed to ensure the customer can take corrective action.
Statement 3 is incorrect; the 'Best Practices' section explicitly prohibits rejecting first-time borrowers merely because they lack a credit history, promoting financial inclusion.
Customers must be alerted to negative changes, nodal contact details must remain current (5-day update rule), and rejection reasons must be disclosed to ensure the customer can take corrective action.
Statement 3 is incorrect; the 'Best Practices' section explicitly prohibits rejecting first-time borrowers merely because they lack a credit history, promoting financial inclusion.