The Madras High Court has upheld a decision by the State Bank of India (SBI) to cancel a job appointment for a candidate with a poor CIBIL score, sparking debate over the use of credit scores in employment decisions. Justice N. Mala ruled against P. Karthikeyan, who sought to overturn SBI's decision to revoke his appointment as a Circle Based Officer (CBO) due to an adverse CIBIL report. The court emphasized the importance of financial discipline for those handling public money, stating that individuals with a history of poor financial management may not be suitable for such roles.

SBI cancelled Karthikeyan's appointment after discovering "serious lapses in financial discipline" in his CIBIL report. The report showed that Karthikeyan had been irregular in repaying loans and had defaulted on credit card dues, causing losses to a bank. Karthikeyan argued that he had cleared all dues and was not a declared defaulter at the time of the job notification. However, the court sided with SBI, noting that the bank's recruitment notification clearly stated that candidates with a history of default or adverse credit reports were ineligible. The court also pointed out that Karthikeyan had failed to challenge these eligibility criteria during the application process.

The High Court stated that once an applicant applies for a job based on the terms and conditions of the advertisement, those terms and conditions cannot be challenged later. The judge reasoned that bank employees dealing with public money must maintain strict financial discipline. The court also referenced that the bank took a prudent decision to deem candidates with a history of default in loan repayments and adverse CIBIL reports as ineligible.

The case has ignited discussions about the ethics and accuracy of using CIBIL scores in employment decisions. CIBIL, or Credit Information Bureau (India) Limited, tracks individuals' and businesses' credit histories based on loans, repayments, and defaults. While a good CIBIL score is crucial for loan approvals, its increasing use in hiring processes, especially in the financial sector, has drawn criticism. Critics argue that credit scores may not fully reflect a person's capabilities or current circumstances and that over-reliance on this data could lead to unfair discrimination. There are concerns that individuals might be unfairly penalized for past credit issues, even when those issues are unrelated to job performance.

Congress MP Karti Chidambaram has voiced concerns over the transparency of TransUnion, the Chicago-based company that owns CIBIL. He highlighted the lack of transparency in the rating process and the absence of a grievance redressal mechanism. This case raises broader questions about privacy, financial rehabilitation, and the extent to which past financial missteps should impact future employment opportunities.