Patna: Students seeking loans under the state government's Student Credit Card (SCC) scheme will not have to knock the door of banks anymore.

Bihar State Education Finance Corporation (BSEFC) - a unit set by the state - will disburse the loans from now to the students. Finance department principal secretary Sujata Chaturvedi will act as managing director of the corporation. Students pursuing higher education is eligible to get a loan of Rs 4 lakh from the corporation under the scheme.

Sujata Chaturvedi said: "The corporation will provide loans to students and the state government will provide a seed money. Since the scheme falls under the education department, all processes such as verification of students, their education certificates, will be verified by the department and only then the corporation will provide loans to the students."

For smooth functioning of the BSEFC, the state cabinet had nodded to create positions for 131 officials and employees at the corporation. Apart from setting up a separate finance corporation, banks will continue disbursing loans under the SCC.

A senior education department official said: "The rules set by banks to get loans under the student credit card scheme were tedious. We have seen students running from one bank counter to another to get loans but at the end of the process the loan was denied."

Despite chief minister Nitish Kumar's repetitive directive to banks, they paid little heed to disburse loans. At the 60th meeting of the state-level bankers' committee held in Patna last year Nitish had asked bankers not to harass students seeking loans under the SCC. Deputy chief minister Sushil Kumar Modi while presenting the state annual budget this year had announced to set up a separate corporation to provide loans under the government scheme.