Union Minister for Finance P Chidambaram revealed that around 12 lakh students all over the country had obtained the benefit of educational loans up to the value Rs 16,000 crore.
At the inaugural function of the 1008th branch of Vijaya Bank at Rangiyam in Tirumayam taluk, the Finance Minister observed that Vijaya Bank, one of the nationalised banks since 1980, had achieved a fast growth to reach the 1008th mark.
With the opening of new branch around 15,000 people of five panchayats - Rangiyam, Midhilaipatti, Kuruvikondanpatti, Sethurapatti and Kannanur, would be benefited. The bank has been offering loans under the heads of education, agriculture, small scale industries and SHG entrepreneurship.
Loans are also given to washer men and barbers at the rate of four per cent interest. In the current year the target for agri loans has been fixed at Rs 2.25 lakh crore which is likely to be go beyond by another Rs 10,000 crore.
There is also a scheme for the rehabilitation of the physically- challenged by creating one lakh job opportunities which is to be introduced at an expenditure of Rs 1,800 crore. Gramin Rozgar Yojana (National Rural Employment Guarantee Program) will be executed in the district from April onwards.
This will make possible for a laborer to earn a daily wage of Rs 80- 100. Vijaya Bank Chairman and MD Prakash Mallaiya said that the bank’s transactions were at Rs 72,000 crore.
It is expected to reach the figure of Rs one lakh crore by 2008-09. Mallaiya added there are plans to increase the number of branches to 1,050 by year end.
Wednesday, January 23, 2008
Monday, January 21, 2008
For aspirant students studying abroad becomes cheaper
The Reserve Bank of India’s (RBI’s) has taken a decision to reduce risk weight age on educational loans to 75 percent from 125 per cent Following this decision of RBI will become easier to get the loan for those who have plans to take loan to pursue studies abroad.
Though, the move is unlikely to bring any immediate reduction in interest rates. But it is thought that this will increase the funds available with banks for lending.
“The RBI’s decision to reduce risk weightage on education loans will increase the quantum of lending for the purpose of education. This will not translate to any reduction in rates as the capital release on account of the reduction in risk weight will be minimal. However, we will now be able to lend more. The non-performing loans in this portfolio are low as banks now ask parents to guarantee the loan availed,” said MV Nair, chairman and managing director, Union Bank of India.
At present, interest rates on educational loans float in the range of 11 to 11.50 per cent. On an average, banks lend a maximum of Rs 7.5 lakh for studies in India and a maximum of Rs 15 lakh for studies abroad. The interest rate on loans up to Rs 4 lakh is attached to the bank’s benchmark prime lending rate (BPLR).
Loans in more than Rs 4 lakh are charged one percentage point over the BPLR. “This change comes with the government’s thrust on educational loans. The change in risk weight will not lead to immediate change in interest rates,” said TS Narayanasami, chairman and managing director, Bank of India.
It is believed the the reduction in risk weight, along with priority sector lending status to education loans, should give a momentum to growth in lending of the education loans.
Loans given to individuals for educational purposes up to Rs 10 lakh for studies in India and Rs 20 lakh for studies abroad qualify as priority sector lending. According to RBI data banks granted educational loans to the tune of Rs 16,926 crore as on August 17, 2007.
V Santhanaraman, executive director, Bank of Baroda, said: “With the cut in risk weightage, banks will be able to give more educational loans. However, it does not mean that banks will reduce the rate of interest on educational loans immediately.”
Though, the move is unlikely to bring any immediate reduction in interest rates. But it is thought that this will increase the funds available with banks for lending.
“The RBI’s decision to reduce risk weightage on education loans will increase the quantum of lending for the purpose of education. This will not translate to any reduction in rates as the capital release on account of the reduction in risk weight will be minimal. However, we will now be able to lend more. The non-performing loans in this portfolio are low as banks now ask parents to guarantee the loan availed,” said MV Nair, chairman and managing director, Union Bank of India.
At present, interest rates on educational loans float in the range of 11 to 11.50 per cent. On an average, banks lend a maximum of Rs 7.5 lakh for studies in India and a maximum of Rs 15 lakh for studies abroad. The interest rate on loans up to Rs 4 lakh is attached to the bank’s benchmark prime lending rate (BPLR).
Loans in more than Rs 4 lakh are charged one percentage point over the BPLR. “This change comes with the government’s thrust on educational loans. The change in risk weight will not lead to immediate change in interest rates,” said TS Narayanasami, chairman and managing director, Bank of India.
It is believed the the reduction in risk weight, along with priority sector lending status to education loans, should give a momentum to growth in lending of the education loans.
Loans given to individuals for educational purposes up to Rs 10 lakh for studies in India and Rs 20 lakh for studies abroad qualify as priority sector lending. According to RBI data banks granted educational loans to the tune of Rs 16,926 crore as on August 17, 2007.
V Santhanaraman, executive director, Bank of Baroda, said: “With the cut in risk weightage, banks will be able to give more educational loans. However, it does not mean that banks will reduce the rate of interest on educational loans immediately.”
Subscribe to:
Posts (Atom)