In a case that spotlights the importance of financial discipline for roles in the banking sector, the High Court recently upheld the State Bank of India’s (SBI) decision to cancel the job offer of a candidate selected for the post of Circle Based Officer (CBO), citing his poor credit history.
The legal battle was initiated by R. Karthik (name changed), who challenged the bank’s move after being denied the position due to adverse remarks in his CIBIL (Credit Information Bureau of India Limited) report. However, Justice N. Mala ruled against him, stating that a person who has failed to maintain financial responsibility cannot be entrusted with managing public funds.
“Obviously, a person with poor/no financial discipline cannot be trusted with public money,” the judge stated, agreeing with arguments presented by SBI’s legal representatives, Chevanan Mohan and A. Rexy Josephine Mary. They pointed out that the petitioner did not question the eligibility criteria related to credit history outlined in the job notification.
The court noted that Clause 1(E) of the recruitment notification had clearly mentioned that applicants who had defaulted on loan repayments or credit card dues, or who had negative reports from CIBIL or other financial agencies, would be considered ineligible.
Despite this clear clause, the petitioner went ahead and applied for the position, took the written test, and appeared for the interview, without raising any objections to the stated eligibility requirements. It was only after his selection that SBI obtained his CIBIL report and discovered the adverse financial history.
According to the report, the petitioner had taken three personal loans—ranging from ₹90,000 to ₹1.5 lakh—while working as a Deputy Manager at ICICI Bank in 2018. However, he failed to repay these loans regularly. Additionally, he had defaulted on credit card payments in 2019, leading to a ₹40,000 loss for HDFC Bank.
SBI’s counsel, Mr. Mohan, accused the petitioner of hiding these facts during the application process. In response, the petitioner’s lawyer argued that all dues had been settled before the job application was submitted and therefore should not be held against him.
However, the court disagreed. Justice Mala clarified that the concern was not whether dues had been cleared by the time of application, but rather whether the candidate had a consistently clean record of repaying financial obligations. The judge emphasized that SBI’s decision to deny the appointment was sound, considering the nature of the role.
The judge also referred to a 2003 Supreme Court ruling which stressed that recruitment to public posts must strictly follow the rules laid out in the recruitment notification. Any deviation, the ruling said, could result in unqualified candidates gaining an unfair advantage.