Introduction
Every day, numerous startups embark on their journey, and more than 44,000 startups are registered. Startups and organizations hire candidates for considerable roles where a CIBIL check is required for compliance regulations. Every organization wants an honest and reliable candidate who can help them uplift their business, but a credit background check of applications is vital before hiring for crucial positions. There are some sectors in India that should opt for financial verification of employees, such as banking and finance organizations, and if an organization is hiring an applicant for cash handling or decision-making positions, or aligning with any corporate entity for business (Director, Managing Director, Senior Manager, Partner).
CIBIL verification is a systematic verification process. It starts with collecting sensitive data of applications or companies. Businesses opt for employee credit history verification to extract information about employees’ financial health. The CIBIL check process can show various layers of financial information related to a business entity that help an organization to make every financial decision with care.
How can any candidate be a potential financial risk for an organization?
If a candidate has a history of financial fraud or the behavior of the candidate indicates some risky points, credit score verification is a must. A poor credit score, which shows multiple regular loan defaults and a trial for the recovery process, indicates a financial threat to an organization. Sometimes, people don’t give priority to employee CIBIL score verification because they think it is a waste of time and money for organizations, but this type of thinking can cause lots of damage to the organization financially. A pre-employment credit check with employment verification plays a very crucial role in identifying potential financial risk, where hiring organizations can find out if any financial misconduct happened in the candidate’s past employment history.
Following all the compliance regulations can help a company grow rapidly without thinking about any misconduct, and an employee CIBIL check is one of the verification services that comes under the compliance policy. CIBIL verification does not apply to all employees who work in an organization; it is always applicable to those employees or applicants who show some suspicious behaviors at the current time or in the past.
How to make hiring decisions based on a CIBIL report?
Every HR or hiring manager should know one thing about financial background checks, which is that CIBIL records are not a parameter to judge the lifestyles of a person, because CIBIL scores can be affected by many reasons, but we can get an idea about their financial health. There are a total of 4 judgment points that can help hiring managers to understand an employee’s CIBIL score, which are history of debt, write-offs, and pattern of settlement; debt or loan repayment consistency; and multiple debt defaults. As a hiring manager or authorized person, we cannot take harsh decisions on some exceptions, such as a low CIBIL score without job relevance or a one-time payment delayed.
Is verifying employees’ financial records even legal for corporations?
Yes, employee verification is totally legal in Indian corporations, but after a proper consent process. CIBIL check for employment is a very common practice in big industries for upper-level positions such as senior managers, directors, and so on, and every process demands transparency for a good flow of work to avoid all the legal tensions. Without taking proper consent (in a written format), if organizations initiate background verification on any corporate entity, it can affect organizational brand value and trust in the market. No one can use others’ personal data without their permission, and if someone does so, it means your personal data is being used by others for their benefit but without your knowledge, and you can take all the legal and necessary steps to protect yourself. Verification of CIBIL and BGV consent is equally vital for financial background verification.
How does Verification Street process a CIBIL check for safe hiring practices?
As a third-party verification company, Verification Street processes employee CIBIL checks by collecting necessary documents and details, such as ID (PAN), and we pass all the documents to the background verification team to initiate the verification process. Afterwards, our quality team checks all the verification reports to reassure the verification process, and then we share the reports with the clients.
Conclusion
To avoid risky entities, we need background verification; every organization must opt for a financial background check to establish smooth hiring. CIBIL score verification doesn’t take much time; it takes only 48 hours to complete the verification process. All Indian corporates should opt for a CIBIL check to maintain compliance regulations by safeguarding organizational benefits.
FAQ
Why is CIBIL record verification a necessity for an organization?
Ans. If an organization wants to safeguard its financial benefits and does not want to hire any threatening corporate entity, then employee credit history verification is a required process.
How does any third-party verification company verify CIBIL or the financial record of an applicant?
Ans. To verify the CIBIL record of a candidate, we need a copy of the related documents (PAN Card), and then a dedicated verification team processes background verification on that candidate.
Is a CIBIL check a time-consuming verification process?
Ans. No, a CIBIL check is not a time-consuming process; rather, this check completes its verification in just 48 hours with an accurate verification report.
Is financial verification vital for all corporate positions?
Ans. No, generally, employee verification is only applicable to those positions that handle vital profiles in an organization, such as business partners, managing directors, CEOs, CXOs, and so on.
What type of information does a CIBIL verification initiated by the BGV organization provide?
Ans. CIBIL verification is a critical procedure that analyzes the financial health of a candidate so that the organization can make wise hiring decisions.
