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

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 conditions.

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