Court raps banks attitude on education loans

MADURAI: Strongly disapproving of the piecemeal approach of banks in sanctioning education loans to students, the Madurai Bench of the Madras High Court has advised banks to adopt a pragmatic and not pedantic approach while dealing with such applications.“After all, it is only a loan and not a scholarship. The amount disbursed by the ba-nk is only by way of an education loan and the petitioner has to repay the same in accordance with the terms and conditions of the loan,” Justice K Ravichandra Baabu pointed out.S Sathasivam, son of a temple priest, who is pursuing BE (Information Technology) in a private college in Coimbatore, had in a petition brought to the court’s notice that a nationalised ba-nk had refused to extend aid for his examination and university fee. Instead the bank offered to advance loan only towards his tuition fee and hostel fees.Justice K Ravichandra Baabu, before whom the matter was posted, observed, “Framers of educational loan schemes and financial institutions should always find ways and means pragmatically to extend the loans to needy students rather than approaching the matter pedantically.”He added “If a student pays only tuition and hostel fees, it will not serve the purpose and the college may not permit him to continue the course unless he pays the other fees as well.”The bank’s counsel had justified the piecemeal approach saying that the loan was sanctioned as per a report drafted by retired judge N V Balasubramanian in which he had recommended that only tuition and hostel fees should be sanctioned.Citing the report, the cou-nsel said the bank was not in a position to advance loan towards other heads like textbooks, examination (internal and external) fee, skill development, university fee and stationary fee. Therefore, the bank had offered only `45,000 instead of `1,02,500 sought by  Sathasivam.However, Justice Baabu held that the bank’s action was not  justified. He directed the bank to pay an additional `30,000 per annum (apart from `45,000 already sanctioned) so  that Sathasivam can pursue his studies without any financial strain or  block.