Kerala High Court Directs Bank to Disburse Education Loan Despite Low CIBIL Score

In a significant order, the Kerala High Court, under the jurisdiction of Justice P.V. Kunhikrishnan, has directed the State Bank of India to sanction and disburse an education loan amounting to Rs. 4,07,200/- to a student, Noel Paul Fredy, despite a low CIBIL score. The court emphasized the importance of a humanitarian approach and considered the petitioner's job offer as compelling factors in its decision.

The court's order stemmed from a writ petition filed by the 23-year-old petitioner, seeking the court's intervention in enabling the bank to provide the education loan within a stipulated timeframe. The respondents, State Bank of India and its branch manager, had opposed any interim order, citing the petitioner's low CIBIL score and outstanding loans.

However, the court, taking into account previous judgments (Exts.P3 and P4), stated that the unsatisfactory credit scores of the petitioner's parents should not be the sole grounds for rejecting an educational loan. The court underscored that the repayment capacity of the petitioner after completing his education should be the decisive factor. It further asserted that a humanitarian approach is imperative when evaluating education loan applications, particularly considering that students are the future builders of the nation.

Justice P.V. Kunhikrishnan, while acknowledging the legal contentions raised by the respondents, opined that the balance of convenience favored the petitioner. Notably, the petitioner had secured a job offer from a multinational company, further indicating the potential for loan repayment.

Court ordered the respondents to promptly disburse the education loan to the petitioner's college, emphasizing the need for immediate action. The court left all other contentions open, allowing the respondents to file a counter affidavit and a petition for early hearing, if required.

30th  May 2023

P.V.KUNHIKRISHNAN vs STATE BANK OF INDIA, MALIKAMPEEDIKA BRANCH