ENA Sectors 2025-12-10 13:50:43 <p><span style="font-size:14px"><strong>New Delhi, Dec 10 (KNN)</strong> The Reserve Bank of India (RBI) has clarified that it does not prescribe a minimum credit score for sanctioning loans by banks and other regulated entities. </span></p> <p><span style="font-size:14px">Minister of State for Finance, Pankaj Chaudhary, shared this information in a written reply to the Rajya Sabha.</span></p> <p><span style="font-size:14px"><strong>CIRs as One of Several Lending Inputs</strong></span></p> <p><span style="font-size:14px">RBI guidelines require credit institutions, including banks and Non-Banking Financial Companies (NBFCs), to obtain Credit Information Reports (CIRs) from credit information companies as part of their loan appraisal process. </span></p> <p><span style="font-size:14px">However, the CIR is intended to be one of multiple factors considered before granting credit. The RBI requires that first-time borrowers cannot be refused loans just because they lack a credit history, and all lending decisions must comply with board-approved policies as per statutory and regulatory norms.</span></p> <p><span style="font-size:14px"><strong>Grameen Credit Score for Rural Borrowers</strong></span></p> <p><span style="font-size:14px">To improve access to formal credit for rural populations, the RBI has directed credit information companies to develop a Grameen Credit Score framework. </span></p> <p><span style="font-size:14px">This new system is expected to help assess the creditworthiness of rural borrowers, including small farmers, and enhance their access to financial services.</span></p> <p><span style="font-size:14px"><strong>Supporting Inclusive Financial Growth</strong></span></p> <p><span style="font-size:14px">The initiative aims to strengthen credit availability in rural areas, ensuring that underserved communities can benefit from formal financial support and inclusive economic development.</span></p> <p><span style="font-size:14px"><strong>Impact on MSMEs</strong></span></p> <p><span style="font-size:14px">This will benefit MSMEs, particularly in rural areas, by improving access to formal credit. By considering credit history as just one of multiple factors, first-time and small borrowers, including rural entrepreneurs, can secure loans more easily, supporting business growth, financial inclusion, and local economic development.</span></p> <p><span style="font-size:14px"><em><strong>(KNN Bureau)</strong></em></span></p> 44370 https://knnindia.co.in/news/newsdetails/sectors/rbi-pushes-for-rural-credit-scoring-to-strengthen-formal-finance-access 2025-12-10 13:50:43 knnindia.co.in