A man from Tamil Nadu lost his opportunity to work at a leading public sector bank after his appointment was cancelled due to a poor CIBIL score. The Madras High Court recently upheld the bank’s decision, highlighting the importance of financial discipline for those entrusted with public money.

The candidate, P Karthikeyan, had cleared all the required stages for the post of Circle Based Officer (CBO), including the written examination, interview, medical test, and document verification. He was issued an appointment letter in March 2021. However, after a routine background check, the bank discovered adverse remarks in his CIBIL report, indicating a history of loan defaults and lapses in repayment.

Despite Karthikeyan’s claim that he had cleared all his dues before the recruitment notification and was not listed as a defaulter by CIBIL or any other agency, the bank maintained that the CIBIL report reflected a pattern of financial indiscipline. The bank argued that its recruitment policy clearly stated that candidates with a history of loan defaults or adverse credit reports would be ineligible for appointment. The bank further pointed out that the candidate had failed to disclose crucial financial information, and his case involved multiple defaults, making it different from others who were selected.

Karthikeyan challenged the bank’s decision in the Madras High Court, arguing that he had not defaulted at the time of application and that the cancellation was arbitrary and discriminatory. He also alleged that some other candidates with similar issues were appointed, which amounted to unfair treatment.

Court’s Decision

Justice N Mala, delivering the judgement, stated that the banking sector demands strict financial discipline from its employees since they are responsible for managing public funds. The court observed that merely repaying loans before the appointment does not erase a history of poor financial management. The judge remarked, “A person with poor or no financial discipline cannot be trusted with public money.” The court concluded that the bank’s decision was prudent and in line with the need for efficiency and trustworthiness in handling public resources.

The judgement also clarified that once a candidate applies for a job based on the terms and conditions of the recruitment notification, those terms cannot be challenged later. The court dismissed the petition, reinforcing that financial discipline is a valid criterion for employment in the banking sector.

This case highlights a growing trend in India, where employers, especially in finance-related sectors, are increasingly considering candidates’ CIBIL scores during recruitment. A good CIBIL score is seen as a sign of responsibility and reliability, while a poor score can raise concerns about an individual’s ability to handle sensitive financial matters. While this practice is not yet universal across all industries, it is becoming more common in roles that involve direct handling of funds or sensitive financial data.

For job seekers, especially those aiming for positions in banks, non-banking financial companies, insurance firms, and government departments, maintaining a healthy credit profile is now more important than ever. Regularly checking one’s CIBIL score, ensuring timely repayment of loans and credit card dues, and resolving any discrepancies in the credit report can help avoid such setbacks in the job market.

The incident serves as a reminder that financial discipline is not just important for securing loans, but also for career prospects in India’s evolving employment landscape.