The Ministry of Finance has emphasized that banks and financial institutions cannot reject loan applications from first-time borrowers just because they lack a credit history or CIBIL score.
Mandatory Rejection Prohibited: The Master Directions issued by the Reserve Bank of India (RBI) on January 6, 2025, clearly instruct lenders not to deny applications from individuals who are new to credit solely based on the absence of a credit history.
No Minimum Score Requirement: The Ministry has made it clear that the RBI has not set any minimum credit score standard (like 700 or 750) that applicants must achieve for loan approvals.
Holistic Assessment: For those without a credit report, banks must use alternative “digital footprints” and various data points to assess creditworthiness.
Income & Employment: Confirmed salary slips, income tax returns (ITR), and job stability.
Banking Behavior: Examination of bank statements via the Account Aggregator framework.
Utility Payments: Record of digital transactions and payments for utility bills.