The Hindu : Tamil Nadu News : “Consider eligible students' demand for loan sympathetically”

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Friday, Dec 03, 2010
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Tamil Nadu

Tamil Nadu

“Consider eligible students' demand for loan sympathetically”

K.T. Sangameswaran

CHENNAI: The Madras High Court has directed the Chairmen of all nationalised banks/commercial banks to suitably instruct their Branch Managers, especially in rural areas, to ensure that when eligible poor students seek educational loans their cases are considered sympathetically and in a customer-friendly manner.

Justice R. Sudhakar gave the direction on petitions by two students, G.Dhivya and G.Preethi, sisters, who prayed the Court for a direction to Canara Bank to issue the educational loan applications to them for pursuing their engineering degree course at Veltech Hi-tech Engineering College, Avadi, near here.

“Bank managers should not develop retrograde attitude and deny education loan arbitrarily. They have to promote the cause of education, which will empower the youth of our nation,” the Judge observed.

The petitioners said the bank's Branch Manager directed their father to submit an NOC from all other banks in his place of residence. Accordingly, he obtained no due certificates from all banks, except from Indian Bank at Gudiyatham from which he had obtained a poultry loan. His liability with the bank was Rs.3.57 lakh.

The Canara Bank required an NOC from Indian Bank for grant of educational loans to the two students.

In his order, Justice Sudhakar said the Branch Manager's submission stemmed from a misconception of the government policy to extend educational loans to deserving students.

Considering the importance of education and its pivotal role in human resource development, the government had formulated the Model Educational Loan Scheme in 2001.

In the scheme, the emphasis was that “no due certificate” need not be insisted upon as a pre-condition for grant of educational loan. It had been indicated that the bank may obtain declaration/an affidavit confirming that no loans were availed from other banks. The purport of this clause was to ensure that no student availed himself or herself more than one educational loan from different banks. This should not be confused with the loan obtained by the father for his business purpose.

Educational loan and commercial loan were independent of each other and operated on different parameters and terms. Hence, the insistence of NOC from Indian Bank was totally unnecessary and unwarranted.

The Judge directed Canara Bank to issue the loan application forms immediately to the students and process the application for grant of loan to them on their complying with other formalities.

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