Banks cannot reject students’ loan

Posted on Jan 7 2016 - 1:07pm by IBC News Bureau

NEW DELHI: The banks cannot reject education loan to students on the grounds of insufficient employment opportunities. The ruling has been made by the Madurai Bench of the Madras High court. The Madras HC has ruled out that an educational loan cannot be rejected, merely on the grounds that the employment opportunity was poor and there was stiff competition during the campus interviews.

The ruling was given by Justice K.RavichandraBabu on a petition filed by B.Tamilselvan who asked to cancel the order of State Bank of India’s Narayanapuram Branch, wherein, the manager rejected the loan application.

“The Bank is not justified when it gives the ground that the student does not have employment opportunity and there is stiff competition for jobs,” the judge said.

The petitioner, whose son is pursuing B.E in Civil Engineering course at a private college in the district, had sought a loan of Rs.3.10 lakh from the State Bank of India branch. The Judge observed that there could not be any bar for granting educational loan which is repayable with interest.

The objective of providing education loan was to help people without money in pursuing their education and ‘that would be defeated’, if loan was not given, the Judge said, asking the bank to consider the loan application, if that student was otherwise eligible.

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