Banks cannot deny educational loan says HC

Updated on: Tuesday, May 15, 2012

The Madras High Court has held that a nationalised bank cannot deny a student-applicant an educational loan solely on the ground that admission was secured under the management quota.

Justice M Jaichandren set aside an order of a nationalised bank rejecting an engineering student J Pandiyarajan's's educational loan application, as he had been admitted under the management quota.

The judge applied the principles laid down in an earlier judgement and said the bank was not justified in rejecting the student's education loan request.

"There is no prohibition to sanction education loan to students admitted in the management quota," the Judge said and added that if the banks stand was accepted, no student admitted under the management quota, in any private self-financing college, would be in a position to secure an education loan.

This would defeat the purpose for which the Union Government and RBI had introduced the scheme.

Directing the student to resubmit an application to the bank for a loan, the judge said the bank should pass appropriate orders as per the regulations and guidelines laid down for granting educational loans.

The petitioner, studying B.E (Mechanical) course in a private institution, here, had challenged a February 13 last order of the Indian Overseas Bank's branch in Salem district, rejecting his request for educational loan.

He had sought a consequent direction to the bank to provide him the financial assistance.

Banks cannot deny educational loan says HC

More Education news