Bank slammed for rejecting education loan

Justice S Vaidyanathan while closing a plea moved by S Naveen, said, “It is very unfortunate that the future of the student is at stake, due to the flimsy reasons given by the bank. 

Though a cost of Rs 1 lakh should have been imposed on the officials, who have rejected the loan,... taking note of the fact that henceforth, the bank would act in terms of the aforesaid revised IBA Model Educational Loan Scheme, 2015, costs are not imposed.” The student had submitted that he secured 1,017 marks in the Higher Secondary examination held in 2014-15. Following this, he joined Bachelor of Siddha Medicine and Surgery in Sri Sai Ram Siddha Medical College and Research Centre.

Initially, he paid tuition fees by taking hand loans from known sources and thereafter made an application on March 23, 2016, to the Branch Manager, Indian Bank, Arni Branch, with supporting documents. But the bank on October 18, 2016, rejected his application claiming the college was not maintaining placement records of its outgoing students.

Based on this, Naveen moved the court contending that if production of placement record is a pre-condition for loan, then, it would defeat the purpose of granting education loan. His counsel contended that the loan procedures of the bank requires production of necessary documents, which the petitioner has produced and there cannot be any subsequent records that will be available with the student.

The bank counsel submitted that no document has been furnished by the petitioner for sanctioning education loan, much less the admission letter and bonafide student certificate from the college.

However, Justice Vaidyanathan on noting that a reading of the counter would make it clear that education loan of the petitioner has been rejected only on the ground that no subsequent records have been furnished by the college, said, “This court is of the view that if the petitioner fulfills the guidelines stipulated by the bank, his request shall be considered.”