Karthik Madhavan

They should take a positive approach, says Collector

ERODE: District level bankers’ review meeting held here recently brought out the worst kept secret regarding education loan.

Member of Legislative Assembly from Modakurichi R.M. Palanisamy, in the presence of Collector R. Sudalaikannan and bankers, said he had been receiving complaints that bankers offered education loan to only those students who had secured admission through merit to professional courses.

What he meant was that banks rejected applications from students who had secured admission through management quota.

This was only one of the complaints the legislator aired. His second was that bankers treated shabbily those who went seeking education loans.

He specifically referred to Canara Bank’s Modakurichi brach and Indian Bank’s Dharapuram branch.

Mr. Palanisamy requested the Collector to advise the banks to be gentle in their approach to education loan applications, even if they were to turn down applications.

His Congress colleague from neighbouring Kangayam constituency Vidiyal S. Sekar too aired similar complaint.

He too wanted the Collector and Lead Bank Manager B.S. Muniraj, co-ordinator for banking operations in the district, to advise banks to take a positive approach towards education loan. The open airing of complaints regarding education loan disbursement that too from MLAs has once again raised the issue to banks’ insistence on offering education loan only for those students who had secured admission through counselling to professional courses.

Bankers in their defence argue why they should offer education loan to a person who had secured admission through management quota, paying a hefty fee. In essence, they say why financially support somebody who is already well-off.

But a reading of the Reserve Bank of India’s guidelines on education loan, released in 2007, suggests nothing of that sort.

Under ‘student eligibility’, the guidelines say the student should be an Indian national and that he should have secured admission to professional/technical courses in India or abroad through entrance test/merit-based selection process.

Nowhere does the guidelines say that education loan be denied to somebody who has secured admission through management quota.

Vice president Consumer Protection Council, Erode, R. Balasubramanian says when the stated objective of the RBI’s guidelines is to provide financial assistance to deserving students, the bankers are wrong in rejecting applications.

He argues that banks have no right to reject education loan to a student who is likely to get admitted to second or third rung engineering college through counselling but chooses a first rate institution through management quota.

He quotes the Objectives of the Scheme of the guidelines which says: “The Education loan scheme outlined below aims at providing financial support from the banking system to deserving/meritorious students...”

It adds that “No deserving student is denied an opportunity to pursue higher education for want of financial support.”

The consumer rights activist wants to know the grounds of deciding the merit or deserving nature of a candidate by the bankers when the RBI has not said anything.

The Collector too said that bankers ought to take a positive approach to education loan as most of the grievance petitions he received pertained to education loans.