Pointing to the Finnish system, party secretary Anders Flanking told Swedish Radio that this would increase the choice available to students and eradicate long waiting times for applications to be processed.
Education minister Lars Leijonborg neither backed nor rejected the Centre Party's proposal. But he said the idea would be looked at.
"There are no immediate plans to let banks handle student loans, but the fact is that I plan to launch an inquiry on the basis that the service to students could be better," said Leijonborg.
"In relation to that, we could look at such radical proposals as the Centre Party has put forward."
Nevertheless, Leijonborg's preferred option is to keep CSN in place:
"But it should also be said that the criticism of CSN's way of working has been taken on board. It has been good at cutting queuing times so the need to do something radical is rather less than it was a few years ago," he said.
The Swedish Banking Association said that it would not comment on the Centre Party's proposal until more concrete plans were put forward.
Last year two million people had loans or study support from CSN totalling 23.1 billion kronor. 19,000 non-Swedish citizens apply for loans each year.