Complain if denied education loan

A couple of weeks ago, I had written about how banks flout the guidelines of the Reserve Bank, the Indian Banks Association and the government on education loans, and how the banking Ombudsman had, in many such cases, come to the rescue of consumers. Well, here is an interesting follow-up on that story. I wish to write about it as it opens our eyes to the ground reality in many parts of the country vis-à-vis government schemes and programmes aimed at helping the economically weaker sections of society.

A few days after the publication of my article, a person from UP called me up, saying that his son had got admission to a B.Tech course in Roorki and he urgently needed Rs 3 lakh, but the manager of the public sector bank in his village had told him that there was no such loan. I told him that the bank was obviously misleading him, and if the bank continued to take that position, he should complain to the nodal officer of the bank.

Apparently, when the person made a reference to the nodal officer, the branch manager’s attitude changed completely. He asked the consumer to fill up the loan form and promised that the loan would be sanctioned in a couple of days. Happy with this development, he even paid his son’s college admission fee.

However, after a couple of days when he went to enquire about the loan, the manager asked him to meet the field officer, who, in turn asked for a bribe of Rs 50,000.  Without the bribe, he would not get the loan, he was told.  Unwilling to disappoint his son, he borrowed the money from a friend and gave it, only to face a fresh demand for Rs 20,000. When he failed to meet it, he was told that he would not get any loan.

The RBI has nodal officers for grievance redress at its regional offices
The RBI has nodal officers for grievance redress at its regional offices

It was at this stage that the client called me up again and related this entire shocking story. Now this is not the first time that this man had contacted me. For several years he had struggled before courts to get the insurance amount following a fire in his shop selling medicines. By the time the money came (following the court order), he had no shop left, and today, he has a small paan shop to earn his living.

I told him that he had made a big mistake by giving in to the demand for bribe. I told him that he should now send a complaint to the nodal officer of the bank as well as the RBI. I also asked him to complain to the manager of a larger branch of the bank that had a supervisory role over this village branch.

Fortunately, the consumer had a witness — the friend who had lent him the money — to the demand and receipt of bribe. In addition, the aggrieved person also told me that he had put an identification mark on every note in the bundle that he gave the field officer. I asked him to get a statement from the witness and have it attested and also write out his own complaint about the events and give it and not sign any other statement that the bank may ask him to sign.

News travels very fast in villages. Even as the documents got ready, the field officer called him and said his money would be returned in private, provided he agreed to say in public that he had made false allegations against the officer and the manager. The consumer refused.

Next, he was called to the bank, wherein a large number of villagers from his community had been invited to bring about an amicable settlement of the dispute. His money was returned and he was promised that the loan would be released in seven days, but he in turn, should not complain about the field officer and the manager. I am now waiting to hear whether the promised loan has been given or not.

Is this how things work in certain small towns and villages?  My advice to people is that they should not give in to the demand for bribe. Complain. Remember, in addition to the nodal officers of the banks, the RBI has nodal officers for grievance redress at its regional offices and also a nodal officer at the central office to deal exclusively with all educational loan issues and grievances. (rbi website:  You can also get the contact details from the bank itself. So complain.