K Venkata Narayana says it will also ensure that elections are funded by white money.
The manager of Canara Bank's Nallkunta branch in Hyderabad is in a dilemma. A young man has approached the bank asking for a loan of Rs 5 lakh to contest an election.
K Venkata Narayana, 28, says he wants to fight the Warangal Lok Sabha by-election next month as an Independent.
The seat had fallen vacant after sitting legislator Kadiam Srihari resigned in June to become the deputy Chief Minister of Telangana.
"If banks give loans to contest election, socially conscious people like me who don't have the necessary financial resources can also hope to contest elections. Isn't that what democracy should be about?'' Mr Narayana said.
A social activist, who runs an NGO called Jana Sankshema Sangam, Mr Narayana contested the Amberpet assembly seat in 2014 without success.
"We need money to pay for the deposit, for campaigning, for pamphlets and posters. The government should help people like us,'' he says.
The bank says there is no precedent of giving loans to contest elections and has referred the application to their head office, seeking direction.
Mr Narayana has now written a letter to Prime Minister Narendra Modi asking for a Bill in parliament to allow loans to individuals for contesting elections. He says that will also help to ensure white money comes into the funding of elections.