New Delhi, Aug. 25 -- The Ministry of Finance has clarified that banks cannot reject a loan application from a first-time borrower solely because of a low or non-existent CIBIL score.

Minister of State for Finance Pankaj Chaudhary, responding in the Lok Sabha, stated that the Reserve Bank of India (RBI) has not prescribed any minimum credit score requirement for granting loans to individuals applying for the first time.

This clarification follows an RBI "Master Direction" issued on January 6, 2025, which instructs banks and financial institutions not to deny loans merely on the grounds that an applicant has no prior credit history.

While the absence of a credit score should not be a reason for rejection, banks are still required to per...