To realise the developed India by 2020

Friday, December 3, 2010

[India_Vision_2020] Chennai High Court directs Banks not to reject edu loan on technical grounds

 

dear friends

We have been time and taking up through Education Loan Task Force (ELTF) with the banks/RBI, the problems faced by highly brilliant, poor students.  Yesterday, Chennai High Court has directed the banks not to reject the applications on flimsy grounds.  The message may be circulated to the deserving students.  Please read the story appeared in todays Times of India.

Srinivasan
Convenor
Education Loan Task Force


HC warns against denying edu loans on minor technical grounds


CHENNAI: Coming down heavily on banks for denying education loans to students on minor technical grounds, the Madras high court has said that educated youth are the building blocks of the nation. The court also directed the chairmen of nationalised and commercial banks to instruct their managers to process education loan applications "sympathetically". 

Justice R Sudhakar, passing orders on the writ pleas of twin sisters G Dhivya and G Preethi, observed: "Education loan should not be denied on hyper-technicalities... Bank managers should not develop retrograde attitude... They have to promote the cause of education, which will empower youth of our nation." 

The sisters had approached the high court after the Sengundram branch of the Canara Bank in Vellore district refused to sanction an education loan to help them pursue an engineering course at Veltech Hi-tech Engineering College at Avadi here. The applications were rejected on the ground that the girls' father had obtained a loan to run a poultry farm from the same bank. 

The bank claimed that there was nothing wrong in the refusal as the girls were unable to produce a no-objection certificate from other banks. Noting that entitlement to an educational loan was not automatic, the high court said the bank was well within the ambit of government policy to deny it. 

However, the judge pointed out that a no-due certificate from banks should not be insisted upon as a precondition for granting educational loans. Justice Sudhakar said there was no such clause to the effect that a girl, who was a co-applicant in her father's farm loan, would not be eligible for her own education loan. "This will be contrary to the scheme of providing education loan," the judge said. 

Agreeing that students cannot avail of more than one education loan at a time, Justice Sudhakar said: "This should not be confused with the loan availed of by the father from a bank for his business purpose... It is therefore clear that the scheme of an education loan is independent of other loans -- business or agriculture." 

Underlining the important of education loans, Justice Sudhakar said that banks should have a positive attitude and encourage students to utilise loan facilities to pursue their education. 

Taking into account the importance of bank managers and the laudable purpose of education loans, the judge said: "Chairmen of nationalised and commercial banks should suitably instruct bank managers, especially in rural areas, to ensure that as and when eligible and poor students apply for educational loan, their case should be considered sympathetically and in a customer-friendly manner to promote the cause of education and nation-building as the scheme is intended to fill up the vacuum that the state is feeling difficult to fill... Bank managers should not develop a retrograde attitude and deny education loan arbitrarily." 


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