Banks can deny loan based on applicant’s credentials, says HC
TIMES NEWS NETWORK
Chennai: 29.06.2018
Can a father’s default in repaying a bank loan adversely affect the loan prospects of his ward?
The Madras high court has answered in the affirmative and observed: “Rather than running behind defaulters, a loan can be rejected at the threshold by identifying a person’s credentials. In this case, the bank has rightly done so, as the petitioner’s father defaulted in paying several loans.”
Justice S Vaidyanathan passed the order, after dismissing a petition by A Deepika, who had joined BSc nursing and wanted the court to direct a nationalised bank to sanction her education loan.
In his order, Justice Vaidyanathan said: “I have held that in view of Model Educational Loan Scheme for pursuing higher education in India and abroad, fixation of 60% of marks as eligibility for education loan by the bank cannot be faulted with. Banks/financial institutions are giving loan to several people under various political pressures and ultimately public money is being misappropriated and defaulters flee from the country. Innocent employees, who are forced to sign the loan grant, are ultimately taken to task. Whether the loan amount is small or huge, it needs to be recovered from defaulters. Hence, I find that except the reason that nursing course does not come under IBA guidelines, all other reasons are found to be sound and the petitioner is not entitled for the loan. Accordingly, the petition stands dismissed.”
Deepika said she had obtained admission in Karthikeyan College in Nagapattinam, and had approached the State Bank of India’s Thalaingaiyur branch for a loan of ₹3.4 lakh towards tuition fee, transportation costs and mess expenses. The request was rejected on many grounds including that nursing course did not come under IBA educational loan scheme.
TIMES NEWS NETWORK
Chennai: 29.06.2018
Can a father’s default in repaying a bank loan adversely affect the loan prospects of his ward?
The Madras high court has answered in the affirmative and observed: “Rather than running behind defaulters, a loan can be rejected at the threshold by identifying a person’s credentials. In this case, the bank has rightly done so, as the petitioner’s father defaulted in paying several loans.”
Justice S Vaidyanathan passed the order, after dismissing a petition by A Deepika, who had joined BSc nursing and wanted the court to direct a nationalised bank to sanction her education loan.
In his order, Justice Vaidyanathan said: “I have held that in view of Model Educational Loan Scheme for pursuing higher education in India and abroad, fixation of 60% of marks as eligibility for education loan by the bank cannot be faulted with. Banks/financial institutions are giving loan to several people under various political pressures and ultimately public money is being misappropriated and defaulters flee from the country. Innocent employees, who are forced to sign the loan grant, are ultimately taken to task. Whether the loan amount is small or huge, it needs to be recovered from defaulters. Hence, I find that except the reason that nursing course does not come under IBA guidelines, all other reasons are found to be sound and the petitioner is not entitled for the loan. Accordingly, the petition stands dismissed.”
Deepika said she had obtained admission in Karthikeyan College in Nagapattinam, and had approached the State Bank of India’s Thalaingaiyur branch for a loan of ₹3.4 lakh towards tuition fee, transportation costs and mess expenses. The request was rejected on many grounds including that nursing course did not come under IBA educational loan scheme.
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