The Kerala High Court recently ruled that banks should not deny education loans to students based solely on their low CIBIL scores. The court emphasized the importance of a humane approach and recognized students as the future builders of the nation.
During the case, the petitioner, a student who had applied for a loan from the State Bank of India, was denied due to his low CIBIL score of 560. The bank’s representative argued that the petitioner’s score was low because of outstanding loans and one loan that had been written off by the bank. They cited legal provisions and circulars to support their position.
On the other hand, the petitioner’s lawyer highlighted the urgent need for the loan disbursement, explaining that the petitioner had already received a job offer from a multinational corporation and would be able to repay the loan promptly.
The court weighed the arguments and acknowledged the petitioner’s job offer and imminent graduation date of May 31, 2023. It recognized that while banks may focus on technicalities, a court cannot ignore the ground realities. Consequently, the court issued an interim order, directing the bank to immediately approve and disburse the education loan of 4,07,200 to the petitioner’s college.
However, the court also allowed the bank to present counter affidavits or request an early hearing of the petition, keeping the door open for further legal proceedings.
