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Call the FM if PSU bank rejects loan application without valid reason

If a public-sector bank rejects a student's education loan application without valid reasons, he can call up FM or Ministry for help.

Apnaloan.com Research Bureau

25 Aug 2008

Indian Finance Minister, P Chidambaram has come up with a facility for potential education loan borrowers. If a student is denied an education loan by any public sector bank without genuine reasons, he can get in touch with the finance ministry or the Finmin himself.

Banks have also been directed to ensure that criteria such as the location of residence or age are not the reasons for rejection of education loan applications. Also, the loan guarantor and the applicant can belong to different areas and should not be a basis for rejection.  

The following initiative was taken by the FM following the written request from students for intervention in this regard.

A senior officer of joint secretary rank has also been appointed to deal with all education loan-related grievances addressed to the finance minister or the ministry.

The pro-student rules do no apply for courses which are not recognised by any statutory bodies such as UGC, AICTE, the central government or a state government.