In a recent rulling the Kerala HC emphasizes the importance of considering students loan application for education loan with compassionate mindset,the court stated that rejecting a student’s loan application soli based on low Credit Information Bureau (India) Limited,i.e., CIBIL is not justified. The CIBIL score is a number that how old a person’s credit history is . Normally if someone has low CIBIL score it can be hard for them to get a loan however in the case of education loan just rulling says that even if a student has a low CIBIL score they still have a chance to get the loan. Justice P.V. KunhiKrishnan highlighted the significant role students play in shaping the future of their nation &stress the need for humanitarian approach when dealing with their loan request. It held that denying education loan to deserving students due to low CIBIL score was not appropriate . The petitioner in this case was a student who had previously taken two loans one of the loans had an outstanding amount of rupees 16667 while other loan had been written by the bank as a result the petitioners Cibil score was adversely affected the petitioners council argued that the immediate resist of the loan amount was crucial for the petitioner’s will being they also cited a previous court decision that emphasize the importance of assessing the student to repayment capacity after completing the education rather than relying soli on credit score of student’s parents. On the other hand the respondent council contained the granting the interim order in favour of petitioner would contradict the guidelines set by the Indian Bank Association and The Reserve Bank of India they further argued that the Credit Information Companies Act 2005 and Credit Information Companies Rules 2006 & the circular issued by the State Bank of India prohibited loan dispersement situations similar to the petitioners case. Although after the considering the facts of the case including the petitioners job offer in ubon the code concluded that it would be fair to grand relief to the petitioner. The court believed that the balance of convenience favoured the petitioner and rejecting the educational loan soli based on low CIBIL score was unwarranted the court emphasize while banks may there technicalities a court of low can not over rule the ground realities and consequently the court directed the respondent to immediately burst this amount of rupees 47200 petitioners college.
Written by- Drishti Pandey College – S.S.Khanna Girls Degree College, University of Allahabad Semester- 4 , intern under legal vidhiya
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