SBI fined Rs 20,000 for refusing education loan

Hyderabad: A district consumer forum in Hyderabad has pulled up the State Bank of India for not following RBI guidelines on education loans. The forum has directed SBI (Zaheerabad) to sanction the loan and also ordered it to pay Rs 20,000 as compensation and Rs 5,000 towards the cost of complaint.

The forum said that as per RBI guidelines education loans followed 'study now, pay later' principle and bankers could release the amount directly to the university in instalments.

"The collateral security is demanded only when the amount is huge. Here, the student was put to unnecessary hardship," the forum added.

In October 2014, Sudhakar Patil had sought an education loan from SBI Zaheerabad branch for his nephew.

The manager, who initially raised objections, later assured to sanction it. But the loan never got approved, forcing Patil's nephew to borrow from private parties at a higher interest rate to fund his education.

After eight months, on July 15, 2015, SBI told Patil to produce release deed of property for lo an approval, but Patil declined to give the documents as he would have had to incur heavy costs in stamp duty . He instead complained to SBI regional manager that he was being harassed as he had refused to pay bribe. When the bank did not take any action, he filed a complaint with the consumer forum.

But bank officials denied the allegations, pointing out that the house which Patil wanted to mortgage was in his mother's name and, although he had the general power of attorney, it was not valid as she had expired. "Hence, we requested him to furnish a release deed from other legal heirs," the bank manager said.

The forum, however, overruled the bank and ordered that the loan be released.