Educational loan eligibility under the Pradhan Mantri Vidyalaxmi Scheme is not contingent on passing all subjects before application.

JUDGMENT

Dated this the 16^th day of March, 2026

1. The Petitioner has filed this Writ Petition by challenging Ext.P5 by which his Ext.P3 Application for Educational Loan of Rs.1,96,000/- is rejected by the Respondent Bank on the ground that the student is not eligible as per the Bank guidelines.

2. The learned Standing Counsel for the Respondent Bank submitted that the Bank could not grant Educational Loan to the Petitioner since the Petitioner had failed in two of the subjects of the course.

3. The learned Standing Counsel for the Respondent Bank made available a copy of the Guidelines for Retail Lending Policy for the year 2024-25 - Version 3.5 of the Respondent Bank, inviting my attention to Clause

24.1.25.2, which reads as follows:

“

24.1.25.2 DISBURSEMENT FOR SUBSEQUENT YEARS:

• If a student fails in any year, loan assistance should be suspended and the same should be resumed only after he passes in that particular class.

• However, wherever carry over system or benefit of continuing education is allowed by the authorities, the branches may continue to disburse the loan for the next academic year even though the student has failed in one ”

or two subjects.

4. Learned Counsel for the Respondent bank contended that in view of the aforesaid guideline, the Petitioner is not entitled to the educational loan.

5. The learned Counsel for the Petitioner invited my attention to Ext.P2 Pradhan Mantri Vidyalaxmi Scheme Guidelines and contended that the Petitioner applied for the loan under the said Scheme and there is no requirement in the said Scheme that the applicant has to pass in all the examinations of the courses up to date.

6. On going through the aforesaid Clause 24.1.25.2 of the Guidelines of the Respondent Bank, I am of the view that it is not applicable for sanctioning of the loan. It is applicable for subsequent disbursements after the sanctioning of the loan. It provides for suspension of financial assistance if the students fail in any year. If the Petitioner has applied for the loan under Ext.P2 Scheme, it shall be governed by the terms of Ext.P2 Scheme. There is no requirement in Ext.P2 Scheme that the Applicant shall not fail in any of the examinations of the course as on the date of application or sanction of the loan. Hence, I am of the view that the stand of the Respondent Bank that the Petitioner shall pass all the examinations of the course up to date of the Application for the loan in order to avail the educational loan is unsustainable. The learned Counsel for the Petitioner points out that the Petitioner is in emergent need of money to pay the next installment of the fee.

7. Hence, this Writ Petition is allowed, setting aside Ext.P5 and directing the Respondent Bank to consider and process Ext.P3 Application within a period of ten days from the date of receipt of a copy of this judgment in light of the aforesaid findings.

Sd/-