Banks must adhere to the eligibility criteria set forth in the Model Educational Loan Scheme, ensuring no deserving student is denied financial support based on rigid internal policies.

JUDGMENT

The petitioner, who joined B.Sc Nursing Course is aggrieved by the rejection of her application for educational loan by the respondent Bank.

2. Petitioner had passed the Higher Secondary Course with 73% marks, after undergoing her studies in GLM International School, Ahmedabad. Thereafter she got admission for B.Sc Nursing in the Oriental College of Nursing, Bengaluru, after being successful in an entrance examination conducted by the College. Ext.P3 Fee Estimation Certificate was issued by the College on 14.11.2019. She submitted an application before the 2nd respondent for Educational Loan, along with her mother as co-obligant. The Bank stated that petitioner's mother, Ambily was a co-obligant along with Mr.Shanmugan (petitioner's father) for a housing loan availed by them and there was default in repayment and the loan had turned as a Non Performing Asset on 07.04.2018. It is further stated that the Bank has received intimation stating that the proposal cannot be considered favorably since petitioner has not secured minimum 80% marks in the individual qualifying subjects in her Plus Two examinations as stipulated by Bank's norms on eligibility for Educational Loans.

3. The learned counsel for the petitioner points out that the petitioner and her mother are living separately from her father. It is stated that Ext.P8 Model Educational Loan Scheme, does not insist 80% marks in the qualifying examination and that the default made in re-payment of housing loan availed by the parents, who are living separately, cannot be a reason as per the said Scheme for denying Educational Loan. The learned counsel points out that as per Ext.P8 a student, who got a minimum of 60% marks in the qualifying examination, is eligible for the benefit under the said Scheme and the Nursing Course is a professional course, for which Educational Loan can be sanctioned. It is also pointed out that the Scheme does not provide that petitioner should qualify in an All India Entrance examination.

4. The 2nd respondent has filed a counter affidavit stating that the Head Office has issued a Circular Ext.R2(a), according to which Educational Loan can be given only to those students, whose cut off marks should be a minimum of 80% in the subjects, which are considered as qualifying subjects and 75% in aggregate in Higher Secondary Course for higher education. It is also stated that petitioner has not secured admission on the basis of a Common Entrance Test in the State. It is stated that her application was rejected in the light of Ext.R2(a) Circular. It is also stated that the default in repayment of housing loan, which the petitioner's parents availed, was also one of the reason for rejecting the application of the petitioner. The learned Standing Counsel for the Bank submitted that even though such a reason was stated in the order rejecting the application, the actual reason behind the rejection was that petitioner did not appear in the Common Entrance Examination conducted by the State and did not acquire 80% of marks, in tune with Ext.R2(a)

Circular.

5. Having heard the learned counsel for the petitioner and learned Standing Counsel, Sri.K.K.John, it is seen that the respondents have not considered the application submitted by the petitioner in tune with Ext.P8 Scheme or in tune with the spirit and intent of the scheme. The said Scheme, has been floated in implementation of the directions issued by the Government of India for the purpose of providing financial support from banking system to deserving/meritorious students for pursuing higher education in India and abroad, with the main emphasis that every meritorious student, though poor, is provided with an opportunity for pursuing higher education with the financial support from the banking system with affordable terms and condition and that no deserving student is denied an opportunity to pursue higher education for want of financial support. Respondents cannot say that the said Scheme is not binding