HC directs bank to accept farm land as collateral for edu loan

Coming to the aid of a poor farmer's son, who has got MBBS admission on merit, the Madras High Court has directed a nationalised bank to accept his family's farm lands as collateral security and grant him Rs 25 lakh educational loan.
Allowing a petition by S Sampathkumar of Salem district, whose loan application was rejected on the ground that farm land cannot be accepted as collateral security, Justice Pushpa Sathyanarayana directed Indian Overseas Bank to extend the financial assistance within a month.
"As the educational loan is being taken for pursuing the medical course, the bank should have extended its help to him, especially when there is no embargo for granting educational loan against the agricultural property as collateral security," the judge said in a recent order.

The judge said the purpose of education loan scheme itself was to encourage students pursue higher education, besides strengthening the status of financially oppressed people by providing them financial assistance.
If the financial assistance was recoverable in future from the petitioner himself, the bank need not have any apprehension in extending it.
"When there are a lot of philanthropic and welfare schemes offered even by banks, these kinds of special cases may be considered by them leniently and encourage the student community to pursue their goals," the judge said in the order.
Sampathkumar had scored about 95.75 per cent in the higher secondary examination and got admission in a medical college in Navi Mumbai based on marks obtained by him in the entrance test.