Madras HC directs bank to sanction educational loan to appli

The Madras High Court has directed a private bank to sanction educational loan to a Scheduled Caste (SC) applicant within a month to meet his expenses for MBA course.

Allowing a plea by the student, Justice K Suguna said educational loans were welfare measures to enable poor students to pursue higher education. ‘Here is a case where the loan was rejected on wrong assumption and presumption. This cannot be accepted,’ Justice Suguna said.

The petitioner was denied the loan on the ground that he was not a meritorious candidate.

S Yoganathan in his petition said he had completed BBA in second class. He was the first graduate in his family. He got an MBA seat under Government Quota at the Kavery Engineering College in Salem.

As he could not afford the educational expenses for two years, estimated at Rs 1.45 lakh, he approached ICICI Bank, Muthupettai branch.

In May this year, the bank’s Regional Credit Manager-PL-South-1, Tiruchirapalli, rejected his loan application.

Counsel for the bank submitted that the petitioner had secured only 56 per cent marks in the qualifying examination and was not eligible for the loan.

In her order, Justice Suguna said the bank was the lead bank in the area, executing the functions of nationalised bank. It was not the case that it need not sanction educational loans.

Counsel for the bank had conceded that it was governed by RBI’s circular dated April 28, 2001. When the RBI had prescribed minimum eligibility marks of 50 per cent for SC/ST candidates, the bank could not prescribe any other condition or cut-off marks.

When the RBI’s circular was binding, the bank could not overlook the guidelines.

Setting aside the bank’s order the Judge said when the petitioner was eligible as per the circular, rejecting his claim by the impugned order was unsustainable.