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2nd education loan for same family only as per RBI norms: Madras HC

Last Updated: Tuesday, August 11, 2009 - 20:13

Madurai: The Madras High Court Bench here
on Tuesday held that the second education loan for a member of the
same family could be given only according to the RBI
guidelines and the loan applicant should satisfy the

Disposing of a writ petition filed by a loan applicant
who had sought Rs 7.5 lakh as education loan from the Punjab
National bank`s Kanyakumari Branch, Justice R S Ramanathan
said the Bank was prepared to sanction the loan provided the
petitioner satisfied the conditions as per RBI circular.

The petitioner should approach the bank with necessary
documents, including personal guarantee given by parents and
equal security of tangible property to the satisfaction of the
bank, the court said. The judge directed the bank to give the
loan within a week after the application was submitted.

Petitioner Ajitha Josephine sought a direction to the
Bank to sanction loan for an engineering course. Bank counsel
V Sribalaji submitted that petitioner`s brother had already
availed Rs three lakh as education loan without any security.

As per the Educational Loan Scheme and RBI advances
codified circular, for more than one loan for student
borrowers from a family, the family as a unit should be taken
into account for considering the loan and security should be
taken in relation to the total quantum of finance.

Bank counsel said if the loan amount exceeded Rs four
lakh, then personal guarantee should be given by the parents
and tangible security of suitable value must also be furnished
by the person who was seeking loan.

Bureau Report

First Published: Tuesday, August 11, 2009 - 20:13
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