Kerala assembly censures banks for denying education loans

Thiruvananthapuram In a rare show of political unity, the Kerala assembly on Friday censured erring banks that refuse to sanction educational loans.

Moving a motion, treasury bench legislator Thomas Unniyadan called for the attention of the house that banks in the state, despite Reserve Bank of India (RBI) guidelines and three different rulings by the Kerala High Court, were saying no to students who approach them for educational loans.

“This is the season when students approach banks for educational loans. The banks are playing spoilsport in not sanctioning loans for the needy. The government should come up with measures to rein these erring banks," Unniyadan said.

The state has more than 40,000 engineering seats besides an equal number in medical and paramedical courses. Out of these, more than 80 per cent seats are in the professional self-financing colleges.

Chief Minister Oommen Chandy has assured the house a special meeting of all legislators to tackle the issue on Monday.

“Already the state government has held two meetings with the State Level Bankers Committee. We will meet on Monday and see how we can tackle this issue,” Chandy said.

Flouting guidelines

Numerous legislators said that while the Indian Banks Association have clear guidelines of educational loans for students seeking admission, colleges that are recognised should give loan up to Rs four lakhs (Dh25,662) without collateral security or sureties — but this does not happen.

“Education loan is a right of the students but these banks do not do their duty despite clear-cut guidelines. We will ask all the legislators who are behind this issue to see that they take part in the District Level Bankers Committee. We will also give necessary directions to the district collectors to see that this issue is raised and brought to the attention of the leading banks in every district,” Minister for Rural Development K.C. Joseph said.

Joseph also added that the issue will be taken up to the highest level with the chief minister’s Delhi visit in the first week of July.

In April, a nursing student, Shruthi, from Kottayam, committed suicide after failing to get an education loan.

Following public outrage, the police arrested the bank manager, who recently got bail.

“If the state government does not act fast, there will be more number of Shruthis committing suicides,” Unniyadan said.