Ever since the Punjab National Bank scam involving Nirav Modi, billionaire and diamond jeweller came to fore, questions have been raised about how banks that roll the red carpet for the uber rich, treat the poor.
On Friday, the Madras High Court made a similar statement slamming banks for preferential treatment to billionaires. The HC slammed the Indian Overseas Bank on Friday for not sanctioning an education loan of Rs 3,45,000 to the daughter of a poor farmer.
The girl, who hails from Tiruvannamalai, had applied for an education loan in 2011-12 at the Kelur branch of Indian Overseas Bank to pursue her undergraduate degree. Her application was not considered, after which she went to court. A single judge issued a direction, asking the bank to consider the application based on the bona fide certificate issued by the college and issue the loan if eligible. Indian Overseas Bank then appealed against the order in 2012. The girl completed her education in 2015, but the case has been disposed of only now.
The court called the appeal an abuse of the process of court.
In the current scenario where there are mounting NPAs and massive frauds, the HC slammed banks for using a different yardstick for the normal citizen.
“Though the banks would sanction loans and letters of understanding to the billionaire businessmen and affluent, even without sufficient collateral security and would take action for recovery only when the scam spinning out of control, they are adopting a totally different yardstick in the case of middle-income group and poor people across India,” the court said.
The Division Bench consisting of Justice KK Sasidharan and Justice P Velmurugan ordered Indian Overseas Bank to pay a sum of Rs 25,000 to the girl within two weeks.
“The banks have no case that the education loan defaulters have contributed for the accumulation of the bad loans. We are informed that the cumulative total of more than 50 companies or groups each with over Rs 250 crores of loan arrears, classified as willful default, works out to about Rs 48,000 crores,” the bench added.