Man denied SBI job over poor credit history; Madras High Court upholds bank’s decision

The Madras High Court has upheld an order passed by State Bank of India (SBI), cancelling the appointment of an individual to the post of Circle Based Officer (CBO) on receipt of a CIBIL (Credit Information Bureau of India Limited) report, disclosing his long history of default in repayment of bank loans.

Justice N. Mala dismissed a writ petition filed by P. Parthiban (name changed) and upheld the cancellation order passed by the Human Resources department of SBI. The judge said, a probable rationale behind the cancellation was that bank employees dealing with public money must strictly maintain financial discipline.

“Obviously, a person with poor/no financial discipline cannot be trusted with public money,” she said and concurred with SBI counsel Chevanan Mohan and A. Rexy Josephine Mary that the petitioner had failed to challenge the eligibility criterion regarding credit history mentioned in the recruitment notification.

The judge pointed out that that Clause 1(E) of the notification had clearly stated that candidates with a record of default in repayment of loans/credit card dues and/or against whose name adverse reports had been received either from CIBIL or other external agencies would not be eligible for appointment.

Despite such a categorical criterion having been mentioned, the petitioner had chosen to apply for the job without raising any challenge to it and attended the written test as well as the interview. It was only after he was selected that the bank got to know about the adverse CIBIL report against him.

The report disclosed that the petitioner had obtained three personal loans ranging from ₹90,000 to ₹1.5 lakh when he served as Deputy Manager at ICICI Bank in 2018 but was irregular in repaying the amount. Further, he had defaulted credit card payments too, causing a loss of ₹40,000 to HDFC Bank in 2019.

Mr. Mohan accused the petitioner of having suppressed all these details while applying for the job. On the other hand, the petitioner’s counsel contended that his client had cleared all the dues before applying for the job and hence, the criterion mentioned in the recruitment notification could not be used against him.

After hearing both sides, the judge said, the criterion was not about clearing dues before applying for the job but about the need for a candidate to possess a clean track record of discharging loans on time. She said, SBI had taken a prudent decision not to appoint candidates with poor credit history.

She also relied upon a 2003 Supreme Court verdict in which it had been held that recruitment to public service should be strictly in accordance with the terms of recruitment rules and any deviation from those rules would end up permitting entry of ineligible persons much to the disadvantage of others.