Ryder, 29, was dropped from New Zealand's squad for the second test against India at the Basin Reserve after being involved in a late-night drinking session on the eve of the first test in Auckland. (Agencies)
That indiscretion also counted against his inclusion in the World Twenty20 squad, national selection manager Bruce Edgar told reporters at the Basin Reserve on Sunday.
"It certainly created a gap for us," Edgar said, naming the side for the tournament that starts on March 16.
"Mike (Hesson) and I certainly weren't happy with his preparation and therefore we have had to exclude him.
"Character is really important and if we feel ... it does not stack up we will not select a player."
Edgar said Ryder's future selection, particularly for New Zealand's tour of West Indies in May, would depend on the player himself.
"It's really up to Jesse to work through the process with New Zealand Cricket, the players' association and Otago Cricket," he added. "Until that time I can't really answer that. It's up to Jesse."
Top order batsman Kane Williamson, who has not played an international Twenty20 match since 2012, has been named in the team and would be considered one of the candidates to open the innings instead of Ryder, Edgar said.
Left-arm pace bowler Trent Boult, who missed several limited overs matches against India and West Indies, was named in the squad while there were recalls for left-arm spinner Roneel Hira and all-rounder Anton Devcich.
"Trent is a high quality player. We tried to get him into the ODIs but he had a quad strain and we weren't able to expose him for the series against India," Edgar said.
"We now feel confident that we can get him into the side and give him that opportunity."
Young fast bowlers Adam Milne and Matt Henry were unavailable due to injury.
Squad: Brendon McCullum (captain), Corey Anderson, Trent Boult, Anton Devcich, Martin Guptill, Roneel Hira, Mitchell McClenaghan, Nathan McCullum, Kyle Mills, Colin Munro, James Neesham, Luke Ronchi, Tim Southee, Ross Taylor, Kane Williamson.
Ryder, 29, was dropped from New Zealand's squad for the second test against India at the Basin Reserve after being involved in a late-night drinking session on the eve of the first test in Auckland.