Seeking an education loan? Still waiting for an answer to your application? Tired of calling up the bank? Now, you are in for some good news.
In the face of rising complaints from students of inordinate delays in the sanction of education loans, the Indian Banks Association have asked banks to sanction all such loans within 15 days. Besides, unlike the current practice where banks reportedly refuse loans on “flimsy grounds”, they would now have to communicate in writing the reasons for rejecting such a loan to the applicant.
Officials say education loans have not enjoyed steady sanctions and have been implemented in an erratic manner.
Bank officials could even be penalised for not honouring genuine cases. Any rejection of education loan would require the approval of the senior controlling authority of the bank branch concerned.
Finance minister P Chidambaram has already asked banks to make credit for students affordable with easier terms and conditions, while ensuring that all loan applications are considered. Lenders have also been asked to increase penetration of education loans to all states.
“We want to ensure that all students get credit to pursue higher education,” TM Bhasin, chairman and managing director, Indian Bank told HT.
“There are certain areas especially in the northeast and Jammu and Kashmir where the penetration of education loans is low,” a senior executive at a mid-sized public sector bank on the condition of anonymity. "We would try to chalk out ways to increase the flow of loans in these regions.”
The total outstanding amount under education loan for banks was estimated at Rs. 43,074 crore in 2011, while it has already touched Rs. 49,069 crore in 2012.