Making a simple query with several paragraphs confuse the experts that is having limited time at their disposal.
To my understanding the following is the essence of the query.
a)Member's nephew wanted to avail an educational loan. The presumption of the query is that Bank manager wanted a guaranee and mortgage of property also as the educational loans are substantially contributing to NPA category which recovery is being very difficult, as students migrate and whereabouts are also not known, or going abroad for jobs etc. Member whole heartedly may not be willing and may be his close relations are compelling him to take a decision unwillingly, and he is exploring ways to avoid such future risk by knowing the rules and regulations.
b)Educational rules and regulations uniformly applicable was uploaded by several banks and RBI has uploaded their directives / guidelines.
c)Sanctioning of a loan is discretion of the bank. As 4 lakhs is the cut off limit, banks sanction 4,05,000/- as loan and insist mortgage.
I may be right or wrong, but the presumptions can be made while replying to a query and such presumptions are not meant for offending unknown members.