Banks cannot deny education loan to management quota student rules Madras HC

Updated on: Thursday, November 15, 2012

The Madras high court has ruled that banks cannot deny education loans to students admitted under the management quota.

Justice N Paul Vasanthakumar, appreciating the timely intervention of the Union finance minister in September this year to clarify certain issues relating to educational loan and broadbase its application, said the Parangipettai branch of the Indian Overseas Bank branch was not justified in denying loan to B Vigneswaran.

Vigneswaran, belonging to a community classified as most backward had lost his father early and his mother was an agricultural worker. After having secured 57.5% in Class 12, he joined BE (Electrical and Electronics Engineering) in Annamalai University under the management quota. His mother, with great financial difficulty, managed to pay 64,710 towards tuition fee for 2011-12.

However, when he furnished his application for education loan along with a bona fide certificate, the bank rejected it saying he had got admission under the management quota and that he had failed to secure the mandatory minimum of 65% marks in Class 12.

Justice Paul Vasanthakumar, rejecting the bank's stance, pointed out that an announcement by the Union finance minister on the education loan had prompted chief executives of public sector banks to hold a review meeting on September 12, 2012. Taking note of the grievances/complaints being received by the government from affected students, the review meeting decided to incorporate new clauses to regulate the education loan regime. As per their decision, in addition to other norms, meritorious students became eligible to claim education loan if they pursue courses under the management quota in an institution "for reasons of convenience (read proximity to the institution) and choice of course."

The judge pointed out that the student was a native of Cuddalore and he had chosen to join Annamalai University as the university was located near his residence. Therefore, the newly-evolved condition on education loans is applicable to him, the judge said.

Banks cannot deny education loan to management quota student rules Madras HC

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