Indian Overseas Bank (IOB), convener for District Consultative Committee of Sivaganga and Pudukottai districts organized an educational loan campaign in Tamil Nadu. Union Home Minister P. Chidambaram in his addressing speech said in India about 20 lakh education loans are given, out of this Tamil Nadu alone accounts for 5.63 lakh. Thus Tamil Nadu accounts for one out of every four education loans given in the country. Whereas, he said the states which are bigger than Tamil Nadu have lower loan rates.
The Minister pointed out that around 70 per cent of the loan beneficiaries at this camp belong to economically backward section of the society including children of casual laborers, car divers and peons, thus the education loan scheme introduced by the Central government has proved to be of great benefit for the economically backward sections.
He added, recently launched interest waiver scheme by the government will cover the education loans taken since 2009-10. In case the bank has charged interest inadvertently, bank will offset it against later payments. If parents find any difficulty in getting loan for their children they can lodge complaints with Canara Bank, the nodal agency appointed by the government for the implementation of the scheme nationwide.
In the camp, education loan of around Rs 10.41crore was disbursed to 643 students the stalls were put up by public sector banks of Sivaganga and Pudukottai districts.
Monday, August 30, 2010
Thursday, August 19, 2010
HRD ministry fears, education loan interest subsidy program may have failed
UPA government grand education loan interest subsidy program seems to have failed. According to the HRD ministry it has not received any reimbursement claim from the member scheduled banks so far. In fact ministry is flooded almost daily with complaints from students, parents and even MPs, occasionally, on behalf of constituents, that banks are not assisting students. The HRD ministry has requested Pranab Mukherjee’s finance ministry to intervene in the matter.
However interest subsidy scheme was a key component of the UPA’s Common Minimum Program in 2004 and the Congress manifesto in 2009, and the scheme was launched in the same year after the coalition returned to power.
The current scheme by the government says that it would pay the interest on education loans for professional courses during the course of study along with the moratorium period for families having income of less than 4.5 lakh a year. The moratorium period consists of the course duration and one year after, unless the student finds a job earlier.
Also, banks are to ask for reimbursements for interest subsidies through the HRD ministry at the end of each half-year or end of the academic year.
The HRD ministry has also written a letter to the finance ministry dated August 9, asking it to intervene in the issue and direct them to submit claims at the earliest. The letter says, “The scheme is effective from the academic year 2009-10 and this ministry has not received any claim from the member scheduled banks so far.”
A series of letters has also been sent to over 150 member banks of the Indian Banks Association implementing the scheme.
On the other hand, according to sources, “Banks are usually prompt to claim their due and we are concerned about the implementation of the scheme. The details of claims — if any — will at least tell us how far the scheme has been implemented and how many students it has benefited.”
However interest subsidy scheme was a key component of the UPA’s Common Minimum Program in 2004 and the Congress manifesto in 2009, and the scheme was launched in the same year after the coalition returned to power.
The current scheme by the government says that it would pay the interest on education loans for professional courses during the course of study along with the moratorium period for families having income of less than 4.5 lakh a year. The moratorium period consists of the course duration and one year after, unless the student finds a job earlier.
Also, banks are to ask for reimbursements for interest subsidies through the HRD ministry at the end of each half-year or end of the academic year.
The HRD ministry has also written a letter to the finance ministry dated August 9, asking it to intervene in the issue and direct them to submit claims at the earliest. The letter says, “The scheme is effective from the academic year 2009-10 and this ministry has not received any claim from the member scheduled banks so far.”
A series of letters has also been sent to over 150 member banks of the Indian Banks Association implementing the scheme.
On the other hand, according to sources, “Banks are usually prompt to claim their due and we are concerned about the implementation of the scheme. The details of claims — if any — will at least tell us how far the scheme has been implemented and how many students it has benefited.”
Wednesday, August 4, 2010
Gujarat witness sharp fall in disbursal of education loan
In Gujarat the number of education loan takers has increased in the last financial year (FY), as compared to the previous fiscal. In FY 2009-10, but there has been decline in the education loan disbursement by 42%, in the financial year 2009-10 as compared to the previous year as few students opted for going abroad for studies.
In 2008-09 banks in Gujarat disbursed Rs581.62 crore to students as education loans, in 2009-10, this came down to only Rs332.37 crore, a decline of Rs249.25 crore in absolute terms.
In FY 2009-10, around 12,663 students took education loans from banks while in the previous year the number of such students was 11,296 hence in FY 2009-10, there was a growth of 12% in the number of bank accounts for the same.
According to overseas education consultants and banking experts looking at the figures it is clear that fewer students opted for going abroad for higher education but there has been increase in demand for education loans from students who have joined not-so-big institutes.
P Nandakumaran, chief general manager, State Bank of India (SBI) said, "It seems the demand for education loans is coming more from students joining the not so-premium institutions." He added that, earlier, the students taking admission in premium educational institutions mainly took education loan but now this is not the case.
This financial year the sharp fall in disbursal of education loan has been noticed in SBI’s education loan. In the quarter ending March 2009, SBI had disbursed around Rs305.10 crore to 569 students in the state. While in the March 2010 quarter it came down to just Rs15.32 disbursed to 959 students.
MK Jain, SLBC convener and general manager, Dena Bank pointed out that decline in the amount of disbursal of education loan may be because few students have opted to go abroad for higher studies. Jain said, "The maximum amount given by banks as education loan is Rs20 lakh. The number of students applying for this maximum amount has gone down."
Tanu Seth, office manager, 'Study Overseas', supported Jain's views. She said there has been decline of about 40% in the number of students going abroad for studies. She said the reason for decline may be recession. Seth said, "Only two out of 10 students coming to us are interested in obtaining an education loan, as they usually do not have liquid assets to show as collateral."
In 2008-09 banks in Gujarat disbursed Rs581.62 crore to students as education loans, in 2009-10, this came down to only Rs332.37 crore, a decline of Rs249.25 crore in absolute terms.
In FY 2009-10, around 12,663 students took education loans from banks while in the previous year the number of such students was 11,296 hence in FY 2009-10, there was a growth of 12% in the number of bank accounts for the same.
According to overseas education consultants and banking experts looking at the figures it is clear that fewer students opted for going abroad for higher education but there has been increase in demand for education loans from students who have joined not-so-big institutes.
P Nandakumaran, chief general manager, State Bank of India (SBI) said, "It seems the demand for education loans is coming more from students joining the not so-premium institutions." He added that, earlier, the students taking admission in premium educational institutions mainly took education loan but now this is not the case.
This financial year the sharp fall in disbursal of education loan has been noticed in SBI’s education loan. In the quarter ending March 2009, SBI had disbursed around Rs305.10 crore to 569 students in the state. While in the March 2010 quarter it came down to just Rs15.32 disbursed to 959 students.
MK Jain, SLBC convener and general manager, Dena Bank pointed out that decline in the amount of disbursal of education loan may be because few students have opted to go abroad for higher studies. Jain said, "The maximum amount given by banks as education loan is Rs20 lakh. The number of students applying for this maximum amount has gone down."
Tanu Seth, office manager, 'Study Overseas', supported Jain's views. She said there has been decline of about 40% in the number of students going abroad for studies. She said the reason for decline may be recession. Seth said, "Only two out of 10 students coming to us are interested in obtaining an education loan, as they usually do not have liquid assets to show as collateral."
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