The Ministry of Finance has clarified that first-time borrowers are not required to have a minimum CIBIL score to be eligible for bank loans. During the recent monsoon session of the Lok Sabha, Minister of State Pankaj Chaudhary reaffirmed the Reserve Bank of India’s (RBI) stance, stating that banks cannot reject loan applications solely based on the absence of a credit score or credit history. According to the RBI’s Master Direction dated January 6, 2025, credit institutions must not deny loans to individuals just because they lack prior credit records.
Chaudhary further explained that in a deregulated credit environment, lenders evaluate loan applications based on commercial judgment, internal policies, and various inputs — one of which is the credit information report.
A CIBIL score, typically ranging from 300 to 900, reflects a person’s creditworthiness and is used to assess loan eligibility. While it’s not compulsory for new borrowers, banks are still required to perform due diligence, reviewing factors like repayment history and prior loan settlements.
Additionally, Credit Information Companies can charge up to ₹100 for providing a credit report, with one free report available annually, as mandated by the RBI.