Lok Sabha Question No. 4122 (UNSTARRED), answered on 2025-08-18
Subject: Status and Recognition of CIBIL Score
Ministry: FINANCE
Asked by: Km. Sudha R

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO- 4122

ANSWERED ON MONDAY, AUGUST 18, 2025/SRAVANA 27, 1947 (SAKA)

## STATUS AND RECOGNITION OF CIBIL SCORE

## 4122. KM. SUDHA R:

Will the Minister of FINANCE be pleased to state:-

(a) the legal status and recognition of CIBIL score;

(b) whether the Government has authorised any organisation to prepare CIBIL and paid any fees to such organisation and if so, the details thereof;

(c)  whether any weightage is given to CIBIL scores by public sector banks while lending home loan, gold loan and farm loan;

(d) whether the Government plans to have its own agency replacing CIBIL to do due diligence before lending loans; and

(e) whether the Government plans to remove CIBIL scores as mandatory requirement for home loans and gold loans from private and scheduled banks and if so, the details thereof and if not, the reasons therefor?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a):  TransUnion CIBIL Limited, which was formerly Credit Information Bureau (India) Limited and  referred  to  as  'CIBIL'  is  one  of  the  credit  information  companies  (CICs). Credit Information Companies function under the extant framework of Credit Information Companies (Regulation) Act, 2005 (CICRA), and the rules and regulations made thereunder.

As per the functions enabled according to provisions in sub-section 1(c) of Section 14 of CICRA, credit information companies provide credit scoring to its specified users or specified users of any other credit information company or to other credit information companies being its members. CICs  generate  Credit  Information  Report  (CIR)  of  a  borrower  which  also  includes  the  credit score (for e.g., CIBIL score as generated by TransUnion CIBIL Ltd).

(b): Reserve Bank of India (RBI) has granted Certificate of Registration (CoR) under Section 5 of CICRA to  four  Credit  Information  Companies  (CICs)  for  carrying  on  the  business  of  Credit Information in India, as mentioned below:

- TransUnion CIBIL Ltd.
- Equifax Credit Information Services Pvt Ltd.
- Experian Credit Information Company of India Pvt Ltd.
- CRIF High Mark Credit Information Services Pvt Ltd.

The fee chargeable for obtaining credit score is regulated by RBI under the Credit Information Companies Regulations, 2006, which provide that a CIC may charge an amount not exceeding Rs. 100 for providing to an individual his own credit information. Further, vide circular dated 1.9.2016 on 'Free Annual Credit Report to Individuals', RBI has advised every CIC to provide one free full credit report including credit score in electronic format, once in a year to individuals whose credit history is available with the CIC.

(c): In terms of Para 11(1) of the RBI's Master Direction (Credit Information Reporting), dated 6.1.2025,  it  is  stipulated  that  Credit  institutions  (CIs)  shall  include  in  their  credit  appraisal processes/loan  policies,  suitable  provisions  for  obtaining  Credit  Information  Reports  (which includes the credit score) from one or more CICs so that the credit decisions are based on credit information available in the system. Credit score enables a CI to assess the credit worthiness and capacity  of  a  borrower  to  repay  his  loan  and  advances  and  discharge  his  other  obligations  in respect of credit facility availed or to be availed by him/her.

However, 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.

Further,  as  part  of  best  practices  for  credit  institutions,  Reserve  Bank vide referred  Master Direction dated 6.1.2025 has advised CIs tha t first time borrowers' loan applications should not be rejected just because they have no credit history.

(d):  Union  Budget  2023-24  has  announced  setting  up  of  a  National  Financial  Information Registry  (NFIR)  as  a  central  repository  of  financial  information  through  a  new  legislative framework  wherein  NFIR  is  envisaged  to  serve  as  a  repository  of  both  credit  and  ancillary information,  thus  enabling  comprehensive  credit  assessment  of  borrowers.  The  framework  is proposed to be designed in consultation with RBI. However, currently there is no proposal to replace TransUnion CIBIL Limited with an alternate mechanism.

(e):  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. 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.

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