The Central Government has brought good news for first-time loan applicants. It has clarified that banks and financial institutions cannot reject loan applications just because there is no CIBIL Score (credit history).

Minister of State for Finance, Pankaj Chaudhary, made this announcement in the Lok Sabha during the monsoon session. He said the Reserve Bank of India (RBI) has issued clear guidelines instructing banks and NBFCs not to deny loans only on the grounds of “no credit history.”

The minister further explained that RBI has not fixed any minimum credit score for loan approval. Instead, banks can make decisions based on their internal policies, commercial considerations, and the applicant’s overall financial discipline.

While a credit report is useful, it is not the sole deciding factor. Banks must carefully verify repayment capacity, past financial records, settlements, or defaults before approving loans.

Additionally, Pankaj Chaudhary reminded that Credit Information Companies (CICs) cannot charge more than ₹100 for a credit report, and as per the 2016 RBI circular, every individual is eligible to get one free credit report every year in electronic form.

This move is expected to provide huge relief to new borrowers and encourage first-time applicants to access formal banking channels.