Liability of Bank for Education Loan to Pay Out Timely

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Liability of Bank for Education Loan to Pay Out Timely
Liability of Bank for Education Loan to Pay Out Timely

Liability of Bank for Education Loan to Pay Out Timely. Justice N Nagareshruled against the Bank of India on a petition filed by a student through Advocate Alexander Joseph. The petition is, challenging the internal guideline for abroad education loan will be settled only after the visa is stamped. The student had pleaded that at least half of the fees have to be paid for visa to be stamped as per rules of the foreign university and the destination of the country. The bank should pay such fee to the university from the loan already sanctioned.

The court said, “The first respondent (Bank of India) is a public sector bank. The education loan is falling under priority sector and is intended to benefit needy and meritorious students aspiring for higher education. The scheme for advancing education loan is framed at the instance of Government of India, RBI and Indian Banks Association. In such circumstances, it is the obligation of the first respondent-Bank to ensure that the petitioner who has provided all requisite security for payment of loan, is granted the loan at the right time, if necessary in relaxation of their internal applications”, in the judgement.

The court has also mentioned that the condition, that the bank should be paid in at least half of the fees. The bank’s rule should be to get the visa stamped primarily. But the payment of loan is not intended primarily. In that case, the bank has to relax the condition of visa is required, the court stated.

Moreover, the court clarified the bank to settle the loan amount without any delay to pay the fees of the university. Otherwise it has to face the result of its actions.

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