CIBIL Score Not Compulsory To Get Loan From Bank

The Ministry of Finance has clarified that banks cannot deny loans to first-time borrowers solely based on a low or zero CIBIL score. During the recent monsoon session of the Lok Sabha, Minister of State Pankaj Chaudhary reaffirmed the Reserve Bank of India’s (RBI) directive that loan applications from individuals without a credit history should not be rejected outright. Citing RBI’s Master Direction issued on January 6, 2025, he said banks must not disqualify such applicants just because they lack a credit record.

Chaudhary further explained that RBI has not set any minimum credit score requirement for loan approvals. In a deregulated lending environment, financial institutions base their decisions on commercial judgment, internal policies, and multiple factors, including—but not limited to—credit reports.

A CIBIL score, ranging from 300 to 900, represents a person’s creditworthiness and is commonly used to evaluate loan eligibility. Though not mandatory for first-time borrowers, the Finance Ministry emphasized that banks should still carry out background checks—such as reviewing repayment history and any restructured or written-off loans.

Additionally, credit bureaus can charge up to ₹100 for providing credit reports. RBI also mandates one free annual credit report per individual.