The Lead Bank has issued a formal caution to all the banks in the district after many deficiencies in the processing of education loan applications caused by lethargic attitude of certain officials came to light.
Lead Bank sources said that the violations by various bank branches traced include keeping the eligible applications pending without assigning adequate reasons, asking for security on loans other than what was stipulated as per Model Education Loan scheme of Indian Banks Association and demanding repayment of interests from students eligible for interest subsidy.
The handling of educational loan applications against the rules by certain bank branches came to the notice of the Lead Bank following the receipt of specific complaints received from parents/students in the recent times.
Another major complaint received from the students was that proposals seeking loans for teacher training/nursing and B.Ed. courses approved by Central or State Governments were rejected by certain bank branches.
Lead Bank officials said that the banks were also asked not to refuse inclusion of expenses towards book, administration fees, special fees and library fees in the loan component.
The bank officials were reminded that they should need not have to follow the ‘service area approach’ for accepting educational loan applications during the current academic year (2013-14).