The Manjoor Branch of the bank in the Nilgiris district of Tamil Nadu allegedly circulated photographs of the girl student and her father after wrongly captioning these as 'missing' and 'defaulters'.
The show-cause notice by the National Human Rights Commission comes after the bank admitted its error, an official statement said here.
The publication of her as well as her father's photographs was against the advice issued by the Union Ministry of Finance to all banks that the names and photographs of students who are unable to repay education loans should not be circulated publicly, the statement said.
"Displaying photographs of the girl and her father on a notice board was in violation of their right to live with dignity, and is recognised as dereliction of Article 21 of the Constitution as well as human rights," Justice D Murugesan, Member, NHRC, said while issuing the show-cause notice.
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The victim had taken an education loan of Rs 2 lakh from the Manjoor branch of the bank in order to pursue her BE degree course.
She completed the course in 2013 and, according to the model IVA Scheme, the first instalment for repaying the loan had to be provided in July, 2014.
She had repaid half the loan amount in the first month itself. She said that "coercive methods" adopted by the bank amounted to a violation of human rights, the statement added.
NHRC took cognisance of the matter on the basis of a complaint filed on July 13, 2015. The ailing father of the victim died due to shock after receiving threatening telephone calls from the bank, it added.