Bad CIBIL Score Costs Man His Job | What Is The Controversy Around CIBIL? | Know Here

The Madras High Court has upheld the State Bank of India's (SBI) decision to cancel a candidate's job appointment due to an adverse credit report, reigniting public debate over the role and reliability of credit bureaus like CIBIL in employment decisions.

In a ruling delivered on June 26, Justice N Mala declined to intervene in the matter, noting that the banking sector demands a high level of financial discipline from its employees, who are entrusted with managing public funds. The court emphasized that someone with a record of poor financial management cannot be reasonably expected to handle the finances of others responsibly.

The candidate had challenged SBI’s withdrawal of his appointment on the grounds that his CIBIL report, an assessment of creditworthiness maintained by the Credit Information Bureau (India) Limited, reflected negatively on his financial behaviour. However, the court ruled in favour of the bank, citing institutional integrity and fiduciary responsibility.

What Is CIBIL And Why Is It Controversial?

CIBIL, one of the primary credit information agencies, tracks individuals’ and businesses’ credit history based on loans, repayments, and defaults. A poor CIBIL score can impact not just loan approvals but, increasingly, job prospects and especially in finance-related roles.

Critics argue that credit scores may not fully reflect a person's capabilities or current circumstances and warn that over-reliance on such data in hiring processes could lead to unfair discrimination. The recent judgment has renewed discussions around the ethics and accuracy of using CIBIL scores in employment decisions, particularly in government and banking sectors.

The case raises broader questions about privacy, financial rehabilitation, and whether individuals should be indefinitely penalized for past credit issues, especially when unrelated to job performance.

Congress MP Karti Chidambaram highlighted concerns over transparency of Chicago based-TransUnion, the company behind the CIBIL score.

“This is a deeply disturbing judgement. CIBIL is a private organisation owned by @TransUnion, a Chicago based company. There is no transparency in the rating process & there is no grievance redressal mechanism,” he wrote on X.

Chidambaram had earlier also questioned the reliability and accountability of CIBIL scores and highlighted the absence of a proper redressal mechanism, which exacerbates the financial difficulties faced by a significant portion of the population.