CHENNAI:Students cannot claim educational loans of higher value as a matter of right without submitting sureties, the Madras High Court has ruled. This is in sharp contrast with an earlier High Court order in the matter, wherein a bank was rapped for refusing educational loan as the student could not produce sureties.
Justice S Vaidyanathan, in a recent order on a petition filed by an MBBS student, said, "The petitioner, as a matter of right, cannot demand a higher amount as loan without any security and that the sanction of loan is covered by the guidelines issued by the bank for availing education loan."
The petitioner and student of Sri Sathya Sai Medical College and Research Institute at Ammapet in Kancheepuram district, R Sanskrit had sought a loan of Rs 63.90 lakh from the Indian Bank. But the bank rejected the application for want of sureties.
Justice Vaidyanathan noted that the student did not have adequate attendance in her college, even though it was acknowledged that she had an economically poor family background and had managed to clear NEET and get an MBBS seat. The judge said the bank was at liberty to process Sanskrit's loan application, based on its internal guidelines.
"The loan application may be processed by the branch of Indian Bank concerned, with respect to each academic year and eligible amount may be sanctioned by the bank to the petitioner in order to enable her to pay fees to the college," the judge said, adding, "If she is unable to get the entire amount as loan, she may have to pay the balance amount from her personal funds."
The court also made it clear that the student might not be permitted to sit for exams, if she failed to pay the fees.
While the present court order ruled that the sanction of education loan is subjected to the guidelines the banks follow, it is in sharp contrast with the earlier High Court order in the matter.
A Division Bench of judges K K Sasidharan and P Velmurugan in February came down heavily on the Indian Overseas Bank for refusing educational loan to a poor farmer's daughter because the student was not able to produce sureties. "The country would be deprived of the service of scientists, doctors, engineers and other professionals, in case financial assistance was not given to the deserving students to come up in life. The educated youth are an asset to the nation and their talents can be utilised for the growth of the country. Banks must realise this fundamental fact," the two-member Bench had observed then.