CIBIL score of co-applicant cannot justify rejection of educational loan; banks must reconsider with eligible co-applicant.

ORDER

The petitioner is before this Court seeking a direction to the second respondent to reconsider the loan application for sanction of an educational loan in favour of the petitioner.

2. The petitioner and his father had applied for sanction of an educational loan in favour of the petitioner, who is pursuing the fourth year of the MBBS course. The application was not considered on the ground that the CIBIL score of the co-applicant, namely, the petitioner’s father, was 686 and that he had availed two gold loans and one housing loan amounting to a total of Rs.1,49,000/-. It was also stated that the co-applicant had an active banking account with Tamilnad Mercantile Bank and that all transactions were being routed through that bank.

3. Heard the learned counsel appearing on both sides.

4. A Coordinate Bench of this Court, in W.P. (MD) No. 5296 of

2018, by order dated 10.04.2018, held that the CIBIL reports of the petitioner’s family members cannot be a ground for rejection of an educational loan application and that the bank may not be justified in seeking an explanation for any delayed admission. Similarly, another Coordinate Bench of this Court, in W.P. (MD) No. 16836 of 2018, by order dated 27.08.2018, observed that the grant of educational loans to aspiring students cannot be made to depend perilously on the whimsical approach of branches of nationalised banks and that banks must assume a larger social responsibility in facilitating access to higher education, particularly for students from poor socio-economic backgrounds.

5. Therefore, the non-consideration of the petitioner’s application for an educational loan for reasons cited above is arbitrary and discriminatory.

6. In light of the above, the first respondent Bank is directed to reconsider the petitioner’s loan application (ID No. A20251025000104961 dated 25.10.2025) and extend the educational loan, subject to the petitioner satisfying all other eligibility criteria. The petitioner shall provide a co-applicant whose CIBIL score is more than 750. Upon furnishing the co-applicant details, the respondent Bank shall disburse the educational loan in favour of the petitioner. This exercise shall be completed within a period of four weeks from the date of receipt of a copy of this order.

7. With the above directions, this writ petition is disposed of. No costs. Consequently, the connected miscellaneous petitions are closed.