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HC reminds banks to abide by Educational Loan Policy

Taking a tough stand on a nationalized bank’s denial to grant loan to an engineering aspirant, the Madras High Court has asked all banks to strictly adhere to the national educational loan policy.

Indian Overseas Bank, the bank in question, had urged that only those candidates who secured 60 per cent or higher in the qualifying examinations should be deemed eligible for educational loans. Apparently, the bank was denying loan to A. Ravi, an engineering aspirant who secured 59 per cent marks, but managed to get admission to a B.E program.

The case dates back to 2012. Following the bank’s denial to grant the requested loan of INR 1.88 lakh, A.Ravi’s father sought judiciary’s intervention for resolving the dispute that posed a genuine threat to his son’s career.

While delivering its verdict, the court made it clear that all financial institutes, including nationalized banks, should adhere to the Central Government’s policy to help society’s weaker sections with educational loans. It also made it clear that banks should not hesitate to cover all genuine, justified and reasonable expenses of the students (loan beneficiary) so as to help them and their parents out of pressing financial burdens.

Also See: Education Loans in India – Frequently Asked Questions

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