Cost imposed on IOB for denial of education loan

The division bench comprising Justice KK Sasidharan and Justice P Velmurugan which dismissed the appeal filed by the Bank assailing the order of Single Judge said, “The present case is a classic example as to how IOB dragged the daughter of a poor farmer belonging to a most backward community in Tamil Nadu, from pillar to post, without considering her application for an education loan of Rs 3. 45 Lakh.” 

The bench also came down bitterly on the bank saying, “Though the banks would sanction loans and letters of understanding to the billionaire businessmen and affluent, even without sufficient collateral security and would take action for recovery only when the scam spins out of control, they are adopting a totally different yardstick in the case of middle income group and poor people across India.” 

The matter relates to a loan application made by a girl student who joined engineering course in a private engineering college during the academic year 2011-12. As she was unable to pay the fees prescribed by the college, she applied for education loan before the Kelur branch of IOB.