Government Speeds Up Education Loan Approvals

The finance ministry has directed public sector banks to process education loan applications within 15 days, aiming to eliminate delays and backlog. This move comes after numerous complaints about prolonged processing times.

Enhanced Transparency and Efficiency

Applications that are rejected or returned must now be approved by a higher authority, with clear communication of the reasons to the applicant. Banks are also instructed to adhere strictly to the documentation listed under the Indian Banks' Association’s Model Education Loan Scheme to streamline the process.

Clearing the Backlog

Banks have been ordered to clear all pending applications up to May and submit a detailed status report. Disbursements will be made in instalments directly to the educational institutions, ensuring that funds are used as intended.

Looking Forward

With the alignment of banks' internal systems with the Vidya Lakshmi portal, the government aims to further expedite the loan approval process, making education financing more accessible to students across India.