BAD PASSWORD: it is too short

Because you might gave  3-4 characters only . always try to set with atleast 6-9 letters including uppercase and numeric number .

[root@tstvm ~]# passwd sai
Changing password for user sai.
New password:
BAD PASSWORD: it is too short
BAD PASSWORD: is too simple
Retype new password:
passwd: all authentication tokens updated successfully.
[root@tstvm ~]#