Justice P.V. Kunhikrishnan emphasised the need for banks to adopt a compassionate approach when considering education loan applications
June 01, 2023
The Kerala High Court ruled that a student's application for an education loan cannot be rejected solely based on their low CIBIL score. Justice P.V. Kunhikrishnan emphasised the need for banks to adopt a compassionate approach when considering education loan applications, acknowledging that students are the future builders of the nation.
The court observed that the rejection of an education loan application solely based on a low CIBIL score was unjustifiable, stating that the bank should not have rejected the student's application due to their credit history.
The petitioner's legal representatives argued that the petitioner would face difficulties unless the loan amount was received immediately. They referred to a previous court ruling stating that the credit score of the student's parents should not be a reason to reject an educational loan, as the student's repayment capacity after completing their education should be the decisive factor.
On the other hand, the respondents' representatives argued that granting an interim order in favor of the petitioner would go against the guidelines set by the Indian Banks Association and the Reserve Bank of India.
However, considering the petitioner's circumstances, including their job offer in Oman, the court concluded that it would be in the petitioner's favour to grant the loan. The court directed the respondents to immediately disburse the loan amount to the petitioner's college. The court also allowed the respondents to file a counter affidavit and a petition for an early hearing of the writ petition, keeping all their arguments open for future consideration. (Courtesy: bwlegalworld.businessworld.in)
