The Indian Government has announced that CIBIL Score Not Mandatory for First Time Loan Applicants.This move is expected to open doors for millions of Indians who could not access formal credit earlier just because they had no credit history.
Because due to earlier bank policies borrower was facing problem to get loan with no credit history that’s why Indian Government introduced new policy for many small entrepreneurs, students, and young professionals which are having no credit history.
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CIBIL Score Not Mandatory for First Time Loan Applicants, Why This Matters ?
Until now, having a good CIBIL score was considered one of the most important conditions for getting a loan. But for those who never took any loan before so don’t have credit history. This was a big barrier, leaving many dreams and opportunities unfulfilled.With this new government policy, people without a credit history can now apply for loans more easily.
Who can take benefits of this policy?
- Everyone, which is having no credit history.
- Small shop owners can get funds to grow their business.
- Students can apply for education loans.
- Families can access personal loans for urgent needs.
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What About the Banks ?
In my opinion it will be some challenging task for bank because Bank and NBFC relay on credit history of borr yeower also.Borrower’s credit history tell the customer behaviour and his intention which is most important thing for risk assessment.But now RBI has already directed banks to do proper due diligence through other sources before approving loans.
A Step Towards Financial Inclusion
it’s a step towards trust and empowerment. It shows that the government wants to give everyone a fair chance, even those who never had a chance to prove themselves in the credit system.
Importance of Credit Information Bureau India Ltd (CIBIL)
As per RBI’s rules, banks and financial institutions must check credit information from one or more CICs before sanctioning loans.However, RBI has not fixed any minimum CIBIL score requirement for loan approval.Banks and NBFC need to take decisions based on their own policies + CIR (Credit Information Report) + other factors.
Final Point of View.
This move could boost entrepreneurship, support families, and give a push to India’s economic growth. Because many people are facing problem to getting loan due to due no credit history.Now with the help of news rule they can availed loan easily
Important FAQs.
Q 1. Do I have to pay to get my CIBIL score?
Ans. A CIC can charge up to ₹100 for a report, but you are entitled to one free full credit report every year from each CIC.
Q 2. Is there a minimum CIBIL score required to get a loan?
Ans. . No, RBI has not set any minimum score. Banks decide based on their policies, but a higher score improves approval chances.
Q3. Can first-time borrowers get a loan without a credit history?
Ans. Yes. RBI has advised banks not to reject first time borrowers just because they lack a credit history.
Q4. Why do banks rely on CIBIL before giving loans?
Ans. Because credit reports show repayment history, defaults, restructured or written-off loans, and overall creditworthiness, which help banks assess risks.