Calcutta HC Directs SBI To Process Education Loan Of Law Student Under 'WB Student Credit Card Scheme' Within 2 Weeks

The Calcutta High Court on Friday directed the State Bank of India (SBI) to process the loan application of a third-year law student who had applied for an education loan under the 'West Bengal Student Credit Card Scheme' notified by the State government on June 30, 2021. 

The West Bengal Student Credit Card Scheme was framed by the State Higher Education Department for providing Credit Cards to students for pursuing higher education

Justice Moushumi Bhattacharya was adjudicating upon a plea moved by Irina Mullick, a third year law student whose loan application of Rs 2,50,000 was rejected by the SBI because of the low CIBIL score of her father. CIBIL is a measure of the credit- worthiness of an applicant. Opining that the State government should ensure that no student in need of money is compelled to sacrifice his or her education, the Court underscored,

Directing the petitioner to make a fresh loan application under the State government scheme, the Court ordered SBI to process such an application with  2 weeks thereafter. "The SBI is directed to process the loan within two weeks from the date the application made by the petitioner. The SBI shall The SBI shall also provide necessary assistance to the petitioner in this regard. Needless to say, the loan application shall be processed under under the relevant Rules. The Bank shall be at liberty of seeking clarification from the Higher Educational Department of the State if the need arises

the Court ordered further.

Background 

The petitioner had applied for an education loan in 2019 under the Student Credit Card Scheme for continuing with her undergraduate studies in the concerned Law School. However, her loan application had been rejected by the SBI vide letter dated March 17, 2022 due to the low CIBIL score of the petitioner's father. The counsel appearing for the SBI submitted before the Court that the petitioner's father was the co-borrower of the loan and the Bank was compelled to reject the loan on account of the low CIBIL score of the petitioner's father. It was further contended that the petitioner was subsequently unable to apply for the loan with her mother as a co-borrower since the concerned portal did not allow

The counsel appearing for the Transunion CIBIL apprised the Court that the low score is based on the information from various member-Banks and that the petitioner's father had an overdue amount of Rs. 2,73,571 as of February 28, 2022. On the other hand, the counsel appearing for the State government furnished alternative email IDs which would allow the petitioner to avail of the loan with her mother as the co-borrower. 

Observations

Upon perusal of the record, the Court noted that the SBI had rejected the loan application on the basis of the Rules of the Scheme and the low CIBIL score of the petitioner's father. It was further noted that Rule 8(b) of the Scheme provides that "The Banks will not insist on any security/ccollateral security in tangible/intangible form other than co- obligation of the parents/Legal guardians" and that the State Government will enter into an agreement with the banks separately in this regard.