Banks cant deny education loan citing low marks, says HC

Updated on: Saturday, September 18, 2010

Madras High Court categorically stated that banks cannot refuse educational loans to students citing the reason less marks.

Aiding to the rescue of a dalit boy who was denied educational loan because he had scored less than 45 per cent marks, the Madras high court told that it was unfortunate banks were inventing reasons to deny loans to students.

Directing the State Bank of Travancore to extend educational loan to S Maran, who joined SKR Engineering College at Poonamallee in 2008, Justice D Hariparanthaman, told that had such an attitude been adopted earlier, even the architect of the Constitution, Dr B R Ambedkar, could not have pursued his higher education.

Maran, a first-generation engineering student, joined the college in 2008. He paid his first year tuition fee with great difficulty, as he was not aware of the educational loan scheme. However, in 2009-10, he applied for a loan but never got any response from the bank. Later, he had to borrow loan from private people.

He then approached the high court against the denial of loan.

The bank, in its counter-affidavit, said that the boy was not eligible for educational loan as he had scored less than 45 per cent marks, which was the cut-off for availing the loan. It also quoted a circular, issued on June 1, 2008, on the basis of a Model Educational Loan Scheme of the Indian Banks' Association.

Justice Hariparanthaman, conveyed that the very purpose of the educational loan scheme would be defeated by such an approach, said: "If such an attitude was adopted, even Dr B R Ambedkar could not have gone for higher education. He had obtained only Rs 287 marks out of 750 in the matriculation examination. The king of Baroda was kind enough to extend financial assistance to him."

The intention behind the welfare scheme was to provide financial assistance to weaker sections of the society, he said, adding, "It is unfortunate that the bank is denying the facility to students citing one reason or the other."

If such an argument of the bank is accepted, in Tamil Nadu, except the general category students, no other student would get educational loans, Justice Hariparanthaman said.

He then directed the bank to sanction the loan within four weeks, and asked the college to reimburse the fee paid by the boy for his second year.

Banks cant deny education loan citing low marks, says HC

More Education news