Kerala HC Says Education Loan Can’t Be Rejected For Low CIBIL Score Of Student

The Kerala High Court has ruled that an education loan cannot be rejected on the ground of a low CIBIL score.

JusticeP B Kunhikrishan also cautioned banks to adopt a humanitarian approach while considering applications for education loans.

The student in this case had availed two loans, of which one was overdue for Rs 16,667, and the other loans was written off by the bank. The CIBIL score of the petitioner was low due to this reason. It was submitted by the petitioner that unless the amount was received immediately the student would be in trouble.

On the other hand, the counsels for the respondents argued that granting an interim order intros case, would be against the scheme framed by the Indian Banks Association as directed by the Reserve Bank of India.

"Students are the nation builders of tomorrow. They have to lead this country in future. Simply because, there is low CIBIL score to a student, who is an applicant for Education loan, I am of the considered opinion that, Education loan application ought not have been rejected by Bank," the court said.

"Here is a case, where the petitioner obtained a job offer too. Banks may be hyper technical, but a court of law can not ignore the ground realities," the Court observed, while directing the respondents to disburse the amount of Rs.4,07,200/- to the College of the petitioner forthwith," the court said.