India, Aug. 24 -- The Ministry of Finance has stated that a minimum CIBIL score is not required for bank loans for first-time borrowers. Speaking in the Lok Sabha during the monsoon session last week, MoS Pankaj Chaudhary reiterated the RBI's stance and stated that banks cannot reject loan applications if the credit score is less or zero for first-time applicants.

"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," said Chaudhary.

The minister further added that RBI has not prescribed a minimum credit score for loan applications.

"In a deregulated credi...