Banks might start checking criminal records before giving loans

Business Nov 24, 2025

Banks are looking at adding criminal record checks to their loan approval process, especially for digital loans and those given to MSMEs.
This move comes after struggles with recovering money from borrowers who have a history of criminal activity.

Why this matters—and what experts think

The idea is to spot risks like fraud early on, but not everyone agrees on how far banks should go.
Hari Hara Mishra highlights the need to track high-risk borrowers, while Akshat Khetan warns that relying too much on these checks could unfairly block trustworthy people from getting loans.
Legally, banks can only check your record if you say yes, and the goal is to make lending safer without shutting people out.