In 2008-2009 public sector banks (PSU) banks have registered 39.51 per cent growth in education loans a mark higher than 38.75 per cent recorded in previous financial year. At the end of March the total outstanding education loans of PSU banks amounted to Rs 27,646 crore in 1,603,385 accounts. Maximum distribution of education loan was figured out from State Bank of India, Canara Bank, Indian Bank and Punjab National Bank.
However the UCO bank a Kolkata based bank registered a 45 per cent growth in its education loan amounted at Rs 28,293 in 2008-09, it is the highest growth among all PSU banks. While State Bank of Bikaner and Jaipur witnessed a 53.5 per cent growth in its education loan amount at Rs 286.8 crore in 2008-09 against Rs 186.8 crore a year ago.
Students can take loans up to Rs 1,000,000 for studies in India and Rs 2,000,000 for studies abroad. It is observed there has been increase in education loans due to the introduction of online system for processing loan applications within stipulated time and passing on sanction to the student to approach the concerned branch.
This has been possible as last year the finance ministry had told banks that no educational loan application should be rejected or passed on to another bank/branch on the ground of area of operation, and told them to process the applications as long as it pertains to the same district. Also the banks were instructed not to put any age restriction on applicants of education loan.
In February, the Indian Banks’ Association had instructed banks to give at least 0.5 per cent rebate in interest rates to female students for pursuing higher education.
In the past four years there has been significant growth in educational loans, but are still lacking behind in comparison to other countries. According to figures only three per cent of the enrolled students in India avail education loans as compared to 85 per cent in the UK, 77 per cent in Australia and 50 per cent each in Canada and the US.
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