Finance Minister P Chidambaram said that public sector banks must clear education loans within 15-30 days. He has also spoken about the provision for an on-line system to clear the loans.
Most banks like the Union Bank of India and State Bank of India provide the option to apply for an education loan online. The applicants can get the sanction in principle online as well. They then contact banks in-person to complete formalities for loan disbursal.
“As per the norms prescribed under the Model Education Loan Scheme, the banks are required to dispose of loan applications within a period of 15 days to 1 month,” Chidambaram told Rajya Sabha in a written reply.
He also referred to statistics provided by the Reserve Bank, saying that educational loans worth Rs 18,992 crore were outstanding as on November 23 for the current financial year 2007-08, sanctioned by the public sector banks.