SBI Officer Appointment Cancelled Over Poor CIBIL Score: Court Says It’s Justified

Chennai, 28th June 2025: The Madras High Court has upheld the State Bank of India’s (SBI) decision to revoke the appointment of a Circle-Based Officer (CBO) over poor creditworthiness, stating that individuals lacking financial discipline cannot be entrusted with public funds.

Justice N Mala, while delivering the judgment, emphasized the importance of financial responsibility in banking roles. “In a profession that involves managing public money, it is essential that employees maintain financial discipline. A person with a history of loan defaults or adverse credit reports cannot be relied upon to handle such responsibilities,” she observed.

The ruling came in response to a petition filed by P. Karthikeyan, whose appointment as a CBO was cancelled by SBI on April 9, 2021. Karthikeyan challenged the decision, claiming he had cleared all his dues before the recruitment notification was issued and that he had not been declared a defaulter by the Credit Information Bureau (CIBIL) or any other credit agency at the time.

Arguing on behalf of the petitioner, his counsel stated, “My client had no outstanding dues at the time of application. Therefore, cancelling his appointment on the grounds of financial default is baseless and unjust.”

However, SBI, represented by advocate C. Mohan, countered that one of the clearly stated eligibility conditions was that applicants must not have any history of loan defaults or adverse reports from credit agencies. The bank asserted that Karthikeyan’s CIBIL report showed a negative credit history, and more importantly, that he falsely declared himself as eligible, which led to the revocation of his appointment under Clause 1(E) of the recruitment criteria.

“Financial integrity is non-negotiable in the banking sector. The petitioner not only failed to meet the eligibility criteria but also furnished misleading information in his declaration,” SBI’s counsel told the court.

Agreeing with the bank’s stand, Justice Mala concluded that the bank’s decision was justified and reasonable. “The employer has every right to set high standards of credibility for roles involving public money. The court finds no grounds to interfere with SBI’s decision,” she ruled, dismissing the petition.