State Bank of India has decided not to stick to the ‘service area’ approach while dispensing education loans. No loan application should be rejected without valid grounds, an e-circular dispatched to branches in the Kerala circle said.

PROPER DISPOSAL

The circular reminded branches that instructions regarding time-bound disposal of educational loan application had already been sent to them.

Accordingly, no application must be rejected without concurrence of the next higher authority.

Branches also need to record reasons for rejection and convey the same to the applicants to avoid complaints.

The circular recalled the meeting chief executives of banks had with the Finance Minister on August 18. At the meeting, the Finance Minister had expressed mainly four concerns.

FOUR CONCERNS

Inordinate delay in the disposal of educational loan applications at the respective branches.

Applications being rejected at the initial stage and being approved subsequently on representations made by students.

Absence, or ineffectiveness, of grievance redress mechanism.

Sanction of loans under newly launched scheme for vocational courses not adequately popularised.

The Finance Minister had advised that a special grievance redress mechanism be put in place at the branch, zonal as well as local head-office levels.

GRIEVANCE CELL

The persons concerned may approach the respective cells in respect of any grievance relating to educational loan. The branch must give wide publicity on the grievance redress mechanism to all applicants.

This may be intimated even at the time of submission of application, and displayed prominently at branches as also on the bank Web site. Such a mechanism is already on display at > www.sbi.co.in the circular said.

COMMON FACILITY

But the circular states that a common facility needs to be activated at the branch and module levels and all complaints relating to educational loans/pending applications/rejections be reviewed on a weekly basis.

Wide publicity should be given to this facility too and the same displayed at branches. Its structure and composition will be advised separately.

> vinson.kurian@thehindu.co.in