The petitioner a second-year BAMS student whose request for an educational loan was denied by the Bank of India, a public sector bank. As per the petitioner, she got admission through the centralized allotment process of the State in 2019 on the basis of her rank in the National Eligibility Cum Entrance Test, 2019.
As her family could not raise the entire balance fee for the course and since they did not have any collateral security to be offered for availing an educational loan for the entire balance fee, the petitioner with her father applied to the bank for an educational loan of Rs.7,50,000/- for which no security is required by the bank in terms of its Educational Loan Scheme.
Anyway, she was informed by the bank that her request could not be considered for there was no satisfactory evidence to state that she will later be able to pay the deficit fee.
Justice P.B Suresh Kumar while allowing the petition mentioned that ‘the object of all Educational Loan Schemes formulated by Banks pursuant to the direction issued by the Reserve Bank of India in terms of the said Circular is to ensure that a meritorious student shall not be deprived of the opportunity to pursue higher education merely on the ground that he/she does not have resources for the same.’
The Court mentioned that “The Central government had framed a policy for institutional funding considering that higher education is progressively being privatized and has become a very costly affair, to ensure that no deserving student was denied the opportunity to pursue higher education for want of financial support.”
The RBI had similarly issued a circular of Model Educational Loan Scheme prepared by the Indian Banks’ Association to formulate appropriate educational loan schemes.