Lok Sabha Question No. 264 (UNSTARRED), answered on 2026-02-02
Subject: New Credit Assessment Models for MSMEs
Ministry: FINANCE
Asked by: Shri Bastipati Nagaraju, Shri Lavu Sri Krishna Devarayalu

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 264

ANSWERED ON MONDAY, 2 nd  FEBRUARY, 2026/ 13 MAGHA, 1947 (SAKA)

## New Credit Assessment Models for MSMEs

## 264. SHRI LAVU SRI KRISHNA DEVARAYALU:

## SHRI BASTIPATI NAGARAJU:

Will the Minister of FINANCE be pleased to state:

(a) whether it is a fact that Public Sector Banks plan to develop a new credit assessment model, based on the scoring of digital footprints of Micro, Small and Medium Enterprises (MSMEs), if so, the details thereof;

(b) whether the said model entails changing the basic eligibility criteria for MSME loans in terms of  regulatory  norms  or  policy  guidelines,  if  so,  the  details  of  the  new  criteria  that  has  been evolved;

(c) if not, whether Credit Information Bureau India Limited (CIBIL) remains the criteria based on  which  the  loans  are  being  disbursed  for  MSMEs  under  the  Government's  New  Credit Assessment Model;

(d)  whether  the  Government  aims  to  develop  a  new  criteria  based  on  which  loans  is  to  be disbursed to MSMEs, if so, the details thereof; and

(e) if not, the reasons therefor?

## ANSWER

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

(a) As announced in the Union Budget 2024-25 and launched in the year 2025, Public Sector Banks (PSBs) have already developed a New Credit Assessment Model based on the scoring of digital footprints of Micro, Small and Medium Enterprises (MSMEs).

(b)  &  (c)  The  introduction  of  the  new  digital  credit  assessment  model  does  not  involve  any fundamental changes in the basic eligibility criteria for MSME loans in terms of regulatory norms or policy guidelines of individual bank. However, it simplifies the process of sanctioning loans and offers a more user-friendly and standardized approach by relying on digitally available data. The model leverages the digitally fetched and verifiable data and devises automated journeys for MSME Loan appraisal using objective decisioning for all loan applications and model-based limit  assessment  for  both  Existing  to  Bank  (ETB)  as  well  as  New  to  Bank  (NTB)  MSME borrowers.  The  digital  footprints  used  by  the  model  may  include  Pan  authentication  using National Securities Depository Limited (NSDL), Mobile and email verification using One Time

Password (OTP), Application Programming Interface (API) fetch of Goods and Services Tax (GST)  data  through  service  providers,  Bank  Statement  Analysis  using  account  aggregator, Income Tax Return (ITR) upload and verification, Application Programming Interface (API) enabled  commercial  and  consumer  bureau  fetch  and  due  diligence  using  Credit  Information Companies (CICs), fraud checks, through APIs, among others.

(d) & (e) No such proposal is under consideration at present. However, in a deregulated credit environment, lenders take credit decisions as per their commercial considerations based on their Board approved policies and broad regulatory guidelines of Reserve Bank of India (RBI).

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