Punishment for Bank official rejecting education loan

Updated on: Tuesday, January 22, 2013

R Thamaraiselvan, the DMK MP from Dharmapuri, said that “Bank officials should be punished with imprisonment if they reject education loan or charge higher rate of interest than what is prescribed. In many cases, rural students are denied even an application for education loan.”

He said some malpractices adopted by officials of nationalised banks include demanding applicants to deposit money in a specified account or asking them to purchase a life insurance policy from a specific agent to get the education loan sanctioned.

On Saturday, Thamaraiselvan took up the case of V M Nithya, with Indian Overseas Bank’s senior officials. Nithya, a rank holder of Periyar University, had applied for an education loan of Rs 20,000 which was rejected by the bank.

Nithya’s father V Muniraj was forced to file a complaint with the Reserve Bank of India (RBI) after the bank did not reply to the applicant for nearly six months. The IOB’s Indur branch in the Salem region rejected Nithya’s loan application, after the complaint was made to the central bank, on the ground that she had not scored the qualifying marks.

He said banks deny education loan citing service area concept, although the RBI has categorically said the concept is only for government-sponsored schemes.

Thamaraiselvan has moved a private member’s bill titled “The Education Loan Bill 2012”, wherein he has proposed that the director of a bank or some other official be punished with a jail term of not more than one year or a fine equivalent to the loan amount if the education loan is refused.

Punishment for Bank official rejecting education loan

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