Chennai: Bank fined Rs 25,000 for denying education loan

he banks must realize this fundamental fact , said a division bench comprising Justices K.K.Sasidharan and P.Velmurugan.

Chennai: Observing that the professional degree obtained by the student must be considered as an asset, like any other secured asset by the banks, the Madras high court has imposed a cost of Rs 25,000 on Indian Overseas Bank, Kelur Branch, Thiruvannamalai district, which refused to sanction an education loan of Rs 3.45 lakh to an engineering girl student.

‘Education is not considered an “asset” by the banks. The country would be denied of the service of scientists, doctors, engineers and other professionals in case financial assistance is 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 utilized for the growth of the country. The banks must realize this fundamental fact”, said a division bench comprising Justices K.K.Sasidharan and P.Velmurugan while dismissing an appeal from the IOB, challenging an order of a single judge, which directed the bank to consider the plea of R.Muthazhagi, seeking education loan.

Writing the judgment for the Bench, Justice Sasidharan said though the banks would sanction loans and letters of understanding to the billionaire businessmen and affluent, even without sufficient collateral security and would take action for recovery only when the scam spinning out of control, they were adopting a totally different yardstick in the case of middle income group and poor people across India. The banks were not concerned with the directives issued by the Central government and RBI to help the poor students by giving them education loan.

Such instructions were violated by the banks with impunity. The present case was a classic example as to how the IOB dragged the daughter of a poor farmer belonging to a most backward community in Tamil Nadu from pillar to post, without considering her application to enable her to pay the college fees and complete the course. The bank by filing the appeal against the order passed by the single judge on November 30, 2012 succeeded in dragging the matter till the completion of the course so as to make the matter infructuous. The Himalayan arrears in courts and the inability of the system to prioritise the case also contributed for the delay and denial of justice to the poor student, the judge added.

The judge said the appeal was nothing but an abuse of process of court. The officer of a public sector bank wasted the public money and valuable time of the court by filing an appeal against a decision which would not cause any prejudice to the bank. Even if the money spent for this unwanted litigation was given as education loan, it would have helped the girl student. The bank acted as if the public sector banks have no social commitment. “We are therefore, of the view that the appeal deserves to be dismissed with cost”, said the court while dismissing the bank’s appeal and imposing '25,000 as costs payable to the girl within two weeks.

( Source : Deccan Chronicle. )
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