New Delhi: Question was raised in the Lok Sabha by Sudha Ramakrishnan, Congress MP from Tamil Nadu’s Mayiladuthurai regarding status and recognition of CIBIL score.
She enquired whether any weightage is given to CIBIL scores by public sector banks while lending home loan, gold loan and farm loan.
Add Zee News as a Preferred Source
Minister of State for Finance Pankaj Chaudhary clarified in the lower house that RBI has not prescribed any minimum credit score for sanction of loan applications. In a deregulated credit environment, lenders take credit decisions as per their commercial considerations based on their Board approved policies and broad regulatory guidelines and the information contained in the Credit Information Report would be one of the inputs, amongst various other inputs/factors, that lenders would consider before granting any credit facility to a prospective borrower.
Chaudhary added, “…as part of best practices for credit institutions, Reserve Bank vide referred Master Direction dated 6.1.2025 has advised CIs that first time borrowers’ loan applications should not be rejected just because they have no credit history.”
On question on whether the Government plans to remove CIBIL scores as mandatory requirement for home loans and gold loans from private and scheduled banks, Chaudhary remarked, “With regard to credit score being mandatory for availing of loans, RBI has apprised that banks, at the time of doing credit appraisal, are expected to undertake due diligence from various sources, including examining the credit history of the borrower based on the CIR from CICs.”
He said Credit related matters of Regulated Entities (REs) are largely deregulated and the same are governed by the Board approved loan policies of the REs framed under the ambit of relevant regulatory and statutory requirements and terms and conditions of the loan agreement between the borrower and the RE. In this context, information on past repayment history, including information on delayed repayments, loans settled, restructured, written-off, etc., in the CIRs, is essential for assessing the creditworthiness of a borrower and to enable lenders to make informed credit decisions.
Stay informed on all the , real-time updates, and follow all the important headlines in and on Zee News.