Banks now check credit history for hiring too

Banks insist on good credit score before hiring

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A bad credit history would not only reduce your chances of getting a loan but also a job in a bank. Some leading private and foreign banks in the country have started checking scores of credit information companies such as Credit Information Bureau Ltd (Cibil) as part of their pre-employment screening process.

Private sector lender IndusInd Bank, foreign lenders DBS Bank and Standard Chartered, and a mid-size private sector lender that did not want to be named confirmed they checked the Cibil records before making a job offer. Zubin Mody, head of human resources (HR) at IndusInd Bank, said the practice had been in place for some time now. While some do it for all jobs, others do it only for some positions.

“We do check the Cibil scores of people, especially those in the compliance and governance roles, before we hire them. This is particularly done for those who are in client-facing and other sensitive roles in the organisation,” said a senior HR official in a private bank on condition of anonymity.

Bankers said checking applicants’ credit history was important, especially in this sector, to maintain financial hygiene. Your Cibil score gets hit if either you or your co-borrower has defaulted on interest/principle or has not settled loan/credit-card dues.

Some lenders said even if they did not check the Cibil score they do check the credit history.

“We do not check the score but we do run a check to ensure that you are not part of the defaulters list at Cibil. This is a part of our thorough background check and we do it for employees across the board,” said Kishore Poduri, HR head at DBS Bank India.

A standard practice internationally, it is now gaining ground among companies in India.

Sunil Goel, director, GlobalHunt, said this could become a standard for companies across sectors.

“Several multinational banks had begun to look at the credit scores and ratings of prospective employees before they were hired. Now, other banks have also joined them. The objective is that an individual dealing with customer funds should have a good credit history and a good credit score himself,” he added.

NEW REQUIREMENT

• Banks now check credit history as part of pre-employment verification
   
• Bad credit history can spoil the chances of getting a bank job
   
• Some banks do it for select roles whereas some others do it across the board
   
• This is a practice internationally and has now become part of the hiring process in India
   
• Credit score gets hit if either you or your co-borrower defaults on interest /principle or has not settled a loan or credit card dues