The Central Bank of India and Lovely Professional University have signed an MOU under which educational loans will be provided to the aspiring, deserving and brilliant students who cannot afford to pursue higher studies due to financial limitation.
The loan will be disbursed through a single-window clearance facility at nominal and lowest possible interest rates. The girl-students will be provided loan at lower rate of interest in comparison to others. Bank will open a counter in the campus so that students can avail loan easily and for speedy disbursal of loan.
The General Manager of the Central Bank of India, R. Mishra & AGM SC Bhayana was present to sign this MOU. After signing MoU Mishra said, “Education is a fundamental right of each and every denizen of India. However, many of the good students remain devoid of higher studies due to their economic conditions or other types of imposed upon financial constraints. Our bank has taken a great step in this regard by trying to make the loan-procedure very easy. A student will be able to get loan from any of the 3400 branches of our bank through out India.”
On this occasion, the Chancellor of the University Ashok Mittal said: “Such collaboration would result in supporting brilliant students, lacking financial support and opportunity, to complete their studies. It is often seen that in-spite of students’ strong willingness their parents could not let them join the desired program of study due to want of money. This MOU is certainly going to prove as a great boon to all such parents and students as procedure in acquisition of the normal loan to continue a programme have been made very easy. Also, CBoI will open a counter in the campus to facilitate the students in the campus itself for speedy disbursal of education loan. ”
Thursday, June 3, 2010
Wednesday, May 5, 2010
Govt plans to reduce education loans interest rate to 4%
The government is thinking on proposal for providing education loans at interest rates as low as 4%. For this government is working on its refinance scheme and has plans to extend the repayment period for those who want to become doctors, engineers, fashion designers and IT professionals.
To implement this scheme there is a need of setting up of special purpose vehicle to refinance banks for giving education loans below prime lending rates. At present banks charge between 10% and 12% on education loan. The ministry of human resources development (HRD), which has drafted the plan, is also in favor of extending loan repayment periods from 5-7 years to 6-12 years, informed the government officials.
HRD minister Kapil Sibal told ET, “In the next one month, the entire concept will be crystallized.” Mr Sibal stated the ministry has already discussed the proposal with the Planning Commission on Tuesday. “They have appreciated the idea and asked us to submit a formal note,” he said.
Planning Commission official has confirmed this and told ET the panel is working on the proposal for the setting up of up a new National Education Finance Corporation (NEFC) to refinance banks on this count. As per the feedback, the ministry will be preparing a formal note for the approval of the Cabinet.
NEFC will be set up with an initial equity capital of Rs 5,500 crore. The ministry is proposed to provide Rs 3,000 crore to the company every year so that it reaches to Rs 35,500 crore by 2020, the plan panel official said.
The 4% interest rate will be charged from those students whose parents’ income will be less than Rs 4.5 lakh per annum.
While for students whose parents’ income is above this mark take an education loan of less than Rs 12 lakh the interest rate will be 7%. Then for loans above Rs 12 lakh will be charged at 9%, an anonymous official of the plan panel informed. On March 5 Mr Sibal had told the Parliament that his ministry has plans of setting up of NEFC to refinance education loans besides providing funds for educational infrastructure and expansion of educational institutions.
“When... every child has free access to loan why will he need to sell the family silver to enter into an educational institution?” he had said then. In 2009 demand for higher and technical education loan is expected to grow from Rs 7,948 crore to Rs 159,566 crore by 2020, shows an assessment by Educational Consultants India (EdCIL) said, an arm of the HRD ministry offering consultancy services for human resource development.
To implement this scheme there is a need of setting up of special purpose vehicle to refinance banks for giving education loans below prime lending rates. At present banks charge between 10% and 12% on education loan. The ministry of human resources development (HRD), which has drafted the plan, is also in favor of extending loan repayment periods from 5-7 years to 6-12 years, informed the government officials.
HRD minister Kapil Sibal told ET, “In the next one month, the entire concept will be crystallized.” Mr Sibal stated the ministry has already discussed the proposal with the Planning Commission on Tuesday. “They have appreciated the idea and asked us to submit a formal note,” he said.
Planning Commission official has confirmed this and told ET the panel is working on the proposal for the setting up of up a new National Education Finance Corporation (NEFC) to refinance banks on this count. As per the feedback, the ministry will be preparing a formal note for the approval of the Cabinet.
NEFC will be set up with an initial equity capital of Rs 5,500 crore. The ministry is proposed to provide Rs 3,000 crore to the company every year so that it reaches to Rs 35,500 crore by 2020, the plan panel official said.
The 4% interest rate will be charged from those students whose parents’ income will be less than Rs 4.5 lakh per annum.
While for students whose parents’ income is above this mark take an education loan of less than Rs 12 lakh the interest rate will be 7%. Then for loans above Rs 12 lakh will be charged at 9%, an anonymous official of the plan panel informed. On March 5 Mr Sibal had told the Parliament that his ministry has plans of setting up of NEFC to refinance education loans besides providing funds for educational infrastructure and expansion of educational institutions.
“When... every child has free access to loan why will he need to sell the family silver to enter into an educational institution?” he had said then. In 2009 demand for higher and technical education loan is expected to grow from Rs 7,948 crore to Rs 159,566 crore by 2020, shows an assessment by Educational Consultants India (EdCIL) said, an arm of the HRD ministry offering consultancy services for human resource development.
Tuesday, February 9, 2010
SBI, UBI launch special education loan scheme for women and IIM
The government is working to provide education to the girl child in view of this it has come up with a model education loan scheme to promote education of the girl child. Last year some of the banks under the guidance of the Indian Banks’ Association (IBA) decided to promote this special scheme.
Working on this plan some of the banks have designed special education loan schemes for women and also for the IIM institutions at lower rates of interest as the risk factor is low and the volume of loan required is large.
Recently two banks Union Bank of India (UBI) and the SBI has launched education loan scheme for IIMs in which women will have to pay 50 basis points less interest rate than their male counterparts.
UBI education loan scheme has been launched exclusively for IIM students under which male students can avail loan at 10.5% interest and female students can avail at 10%.
The total loan amount is Rs 15 lakh and will cover all education expenses, including hostel fees and cost of books.
But for students of ISB Hyderabad, the loan amount will be higher at Rs 20 lakh. The student exchange program will also be covered in this loan and the education loan outstanding amounts to Rs 952 crore.
The education loan portfolio of SBI, the largest lender of the country, is of Rs 8,455 crore, has also introduced education loan program for IIMs. The bank is offering the same 50 basis points lower interest rate for women, similarly to UBI. The bank plans to increase the number of institutions under the SBI scholar loan schemes from 61 to 100 for the next academic year.
A senior SBI official informed, “So far, SBI has extended loans of up to 4.18 lakh students with the average loan size being Rs 3.75 lakh. Our portfolio size has grown by 31 per cent over the past year”. The education loan rate varies between 11 and 12.75 per cent.
Amongst the banks, Bank of India is the major player in education loans with a portfolio size of Rs 1,700 crore. But the bank has not designed any special schemes for IIM or a concessional rate for women students.
Under this concessional scheme if women students repay their loan amount on time, they can avail an interest rate rebate of 1 per cent.
A senior Bank of India official told, “But we do give special loans for out-of-pocket expenses for the IIM students to buy laptops. Our regular education loans extend to the IIMs also.”
Working on this plan some of the banks have designed special education loan schemes for women and also for the IIM institutions at lower rates of interest as the risk factor is low and the volume of loan required is large.
Recently two banks Union Bank of India (UBI) and the SBI has launched education loan scheme for IIMs in which women will have to pay 50 basis points less interest rate than their male counterparts.
UBI education loan scheme has been launched exclusively for IIM students under which male students can avail loan at 10.5% interest and female students can avail at 10%.
The total loan amount is Rs 15 lakh and will cover all education expenses, including hostel fees and cost of books.
But for students of ISB Hyderabad, the loan amount will be higher at Rs 20 lakh. The student exchange program will also be covered in this loan and the education loan outstanding amounts to Rs 952 crore.
The education loan portfolio of SBI, the largest lender of the country, is of Rs 8,455 crore, has also introduced education loan program for IIMs. The bank is offering the same 50 basis points lower interest rate for women, similarly to UBI. The bank plans to increase the number of institutions under the SBI scholar loan schemes from 61 to 100 for the next academic year.
A senior SBI official informed, “So far, SBI has extended loans of up to 4.18 lakh students with the average loan size being Rs 3.75 lakh. Our portfolio size has grown by 31 per cent over the past year”. The education loan rate varies between 11 and 12.75 per cent.
Amongst the banks, Bank of India is the major player in education loans with a portfolio size of Rs 1,700 crore. But the bank has not designed any special schemes for IIM or a concessional rate for women students.
Under this concessional scheme if women students repay their loan amount on time, they can avail an interest rate rebate of 1 per cent.
A senior Bank of India official told, “But we do give special loans for out-of-pocket expenses for the IIM students to buy laptops. Our regular education loans extend to the IIMs also.”
Tuesday, January 19, 2010
PSBs’ showed increase of 15% in education loan portfolios
According to the report submitted by Indian Banks Association to the finance ministry, in the first half of this financial year the state-owned banks education loan has increased by Rs 4,200 crore, an increase of 15%. PSBs opened more than 95,000 accounts during this period.
CGM Personal Banking, SBI, P Nanda Kumaran said, "The loan disbursal during the period June-August is mostly high because all major institutions in India start their semesters during the period. Besides, public sector banks have been offering better terms than private sector banks and that is why the surge."
In this fiscal PSBs had disbursed education loan of around Rs 32,000 crore in which 16,98,601 were benefited. But the government was concerned with the slow approach to education loans and has asked for clarification on it.
Amongst the private sector banks, the three major banks, AXIS, ICICI and HDFC have refused to reveal the details of their education loan portfolio. An ICICI spokesperson pointed out, "We offer education loans but will not be able to share product details."
In public sector banks increase in the education loan portfolio was observed among the smaller banks also such as Corporation Bank, Andhra Bank and Oriental Bank of Commerce.
According to anonymous finance ministry official, the increase portfolio was possible due to concessions given in the previous union budget. In the budget government had announced full interest subsidy for education loans taken by the weaker section. It also provided the income-tax waiver on interest accrued on all loans covering vocational studies as well.
The official informed, "There were other concessions such as low interest rate for girl students which is reflective in the figures."
Even education institutes felt thrust from the concession announced by the government which encouraged banks to give more education loans. "Also, more students are now comfortable with the idea of availing an education loan, which, until a few years ago, was not the case.” For instance, for pursuing higher studies now students prefer to take loan and pay, when they complete their studies or get a job.
CGM Personal Banking, SBI, P Nanda Kumaran said, "The loan disbursal during the period June-August is mostly high because all major institutions in India start their semesters during the period. Besides, public sector banks have been offering better terms than private sector banks and that is why the surge."
In this fiscal PSBs had disbursed education loan of around Rs 32,000 crore in which 16,98,601 were benefited. But the government was concerned with the slow approach to education loans and has asked for clarification on it.
Amongst the private sector banks, the three major banks, AXIS, ICICI and HDFC have refused to reveal the details of their education loan portfolio. An ICICI spokesperson pointed out, "We offer education loans but will not be able to share product details."
In public sector banks increase in the education loan portfolio was observed among the smaller banks also such as Corporation Bank, Andhra Bank and Oriental Bank of Commerce.
According to anonymous finance ministry official, the increase portfolio was possible due to concessions given in the previous union budget. In the budget government had announced full interest subsidy for education loans taken by the weaker section. It also provided the income-tax waiver on interest accrued on all loans covering vocational studies as well.
The official informed, "There were other concessions such as low interest rate for girl students which is reflective in the figures."
Even education institutes felt thrust from the concession announced by the government which encouraged banks to give more education loans. "Also, more students are now comfortable with the idea of availing an education loan, which, until a few years ago, was not the case.” For instance, for pursuing higher studies now students prefer to take loan and pay, when they complete their studies or get a job.
Monday, December 7, 2009
Banks doing good business from education loan portfolio
Since the launch of education loan scheme there has been increase in the number of loan borrowers. The higher education is getting costlier therefore more and more students are taking loan from banks to fund their college fees and other study material instead of reducing their parents’ bank balance.
As per the data available in 2001-02 when the education loan scheme was started banks had disbursed around Rs 700 crore. In the current year, loan of around Rs 6,576 crore was disbursed. By the end of August the total amount of outstanding educational loans stood at Rs 32,017 crore.
Apart from increasing cost of education, the two other factors are responsible for the increase in the demand. One is banks find education loans safe thus more and more banks are offering education loan. The second one is banks are ready to give loan for courses offered by less-known institutes also.
In general the returns of the loan are good and defaults are few and far between. H Rathnakara Hedge, executive director of Oriental Bank of Commerce on behalf of his bank said, “It is a good business for us”. But in general what is true of OBC is true of other banks also.
But four years ago the situation was different, at that time higher education, especially in top professional institutes was still cheap by today’s standards. But with the start up and increase in the number of private institutes, with no exceptions, education is expensive, loans have made easy to get into college as buying a car on EMIs has.
Aggressiveness has made possible for banks to get business. Apart from Hegde of OBC, others too agree with it. Earlier banks used to give loans to only those students who went abroad for higher studies. Late on they started giving loans to students studying in reputed Indian Institutes. Now, students studying in colleges in the B league are also being considered for loan. For instance, Central Bank of India general manager, B N S Ratnakara agreed there is aggression in selling loans to students in low-rung colleges.
IDBI Bank personal banking group head, C S Jain told bank’s education loan portfolio up to 60 per cent has been mainly sanctioned to students studying in institutes other than IITs and IIMs.
The higher the fee structure in a college, the loan demand from banks increases. As IIM education is expensive, thus the loan demand for studies in these institutes has remained high. While at IITs, due to high level of subsidy the demand for loan is quite low.
The Bank of Baroda experience is almost the same. Nandan Srivastava, one of its general managers told the bank has witnessed high demand for loan from non-IIT, non-IIM academies. At the time of sanctioning the loan banks do consider the placement record of an institute, as from this bank judge the repayment ability of the students.
Normally the interest rates charged by the banks differ only marginally. But to the students of premier institutes like the IITs, the IIMs and AIIMS are offered more equal than others. The students of these institutes pay between 0.5 per cent and 1 per cent less than students in not so famous institutes. As these are India’s best institutions, their students get high-paid jobs more easily than others.
Now the awareness for such loans is far greater in as against it was four year ago, this has increased loan demand from students in all kinds of institutes. Even the ratio of loan portfolios in institutes other than the IITs and the IIMs is increasing in most banks, including OBC.
The public sector banks, by assets are owned by the government, so they have to mandatory get into social sector lending first. Moreover education loans, not necessarily by definition in social sector, are a business dominated by these banks.
Banks are not depending on direct lending but also tying up with institutes to increase business. For instance, OBC has tied-up with number of institutes, including IIPM, ICFAI, Amity University, NIIT, Ansal Institute of Technology, to provide funds to the students of these institutes. For this bank has a firm body of clientele guaranteed.
On the other hand institutes are also encouraging multiple banks to work with them. For instance, Amity has also tied-up with Allahabad Bank. The institution’s chancellor Atul Chauhan explained that tie-ups help in faster processing of loans. In his university four out of every 10 students taking admission look for bank funding.
Birla Institute of Management Technology has tie-ups with a trio banks: Canara, UCO and HDFC Bank. According to Rahul Singh, an assistant professor, a quarter of its students have taken loans from banks. Though, such tie-ups do not mean cheaper loans.
However banks consider offering loans to students of reputed institutes safe as in any other. Now the placements are gradually increasing and defaults have been negligible. Also irrespective of institutes, banks are also taking adequate precautions to lower the scope of defaults.
According to IDBI Bank’s Jain when his bank sanction loan, it takes into consideration the future earning potential of a borrower. Banks avoid obliging students of institutes with a troubled placement record.
Central Bank’s Ratnakara also give a word of caution, though, “The real NPA position on education loans is still not clear.” He said till now nothing has come out regarding lending to students of less known colleges will add to the bad assets of banks, however, added, the “preliminary trend does not suggest anything of that sort.”
As per the data available in 2001-02 when the education loan scheme was started banks had disbursed around Rs 700 crore. In the current year, loan of around Rs 6,576 crore was disbursed. By the end of August the total amount of outstanding educational loans stood at Rs 32,017 crore.
Apart from increasing cost of education, the two other factors are responsible for the increase in the demand. One is banks find education loans safe thus more and more banks are offering education loan. The second one is banks are ready to give loan for courses offered by less-known institutes also.
In general the returns of the loan are good and defaults are few and far between. H Rathnakara Hedge, executive director of Oriental Bank of Commerce on behalf of his bank said, “It is a good business for us”. But in general what is true of OBC is true of other banks also.
But four years ago the situation was different, at that time higher education, especially in top professional institutes was still cheap by today’s standards. But with the start up and increase in the number of private institutes, with no exceptions, education is expensive, loans have made easy to get into college as buying a car on EMIs has.
Aggressiveness has made possible for banks to get business. Apart from Hegde of OBC, others too agree with it. Earlier banks used to give loans to only those students who went abroad for higher studies. Late on they started giving loans to students studying in reputed Indian Institutes. Now, students studying in colleges in the B league are also being considered for loan. For instance, Central Bank of India general manager, B N S Ratnakara agreed there is aggression in selling loans to students in low-rung colleges.
IDBI Bank personal banking group head, C S Jain told bank’s education loan portfolio up to 60 per cent has been mainly sanctioned to students studying in institutes other than IITs and IIMs.
The higher the fee structure in a college, the loan demand from banks increases. As IIM education is expensive, thus the loan demand for studies in these institutes has remained high. While at IITs, due to high level of subsidy the demand for loan is quite low.
The Bank of Baroda experience is almost the same. Nandan Srivastava, one of its general managers told the bank has witnessed high demand for loan from non-IIT, non-IIM academies. At the time of sanctioning the loan banks do consider the placement record of an institute, as from this bank judge the repayment ability of the students.
Normally the interest rates charged by the banks differ only marginally. But to the students of premier institutes like the IITs, the IIMs and AIIMS are offered more equal than others. The students of these institutes pay between 0.5 per cent and 1 per cent less than students in not so famous institutes. As these are India’s best institutions, their students get high-paid jobs more easily than others.
Now the awareness for such loans is far greater in as against it was four year ago, this has increased loan demand from students in all kinds of institutes. Even the ratio of loan portfolios in institutes other than the IITs and the IIMs is increasing in most banks, including OBC.
The public sector banks, by assets are owned by the government, so they have to mandatory get into social sector lending first. Moreover education loans, not necessarily by definition in social sector, are a business dominated by these banks.
Banks are not depending on direct lending but also tying up with institutes to increase business. For instance, OBC has tied-up with number of institutes, including IIPM, ICFAI, Amity University, NIIT, Ansal Institute of Technology, to provide funds to the students of these institutes. For this bank has a firm body of clientele guaranteed.
On the other hand institutes are also encouraging multiple banks to work with them. For instance, Amity has also tied-up with Allahabad Bank. The institution’s chancellor Atul Chauhan explained that tie-ups help in faster processing of loans. In his university four out of every 10 students taking admission look for bank funding.
Birla Institute of Management Technology has tie-ups with a trio banks: Canara, UCO and HDFC Bank. According to Rahul Singh, an assistant professor, a quarter of its students have taken loans from banks. Though, such tie-ups do not mean cheaper loans.
However banks consider offering loans to students of reputed institutes safe as in any other. Now the placements are gradually increasing and defaults have been negligible. Also irrespective of institutes, banks are also taking adequate precautions to lower the scope of defaults.
According to IDBI Bank’s Jain when his bank sanction loan, it takes into consideration the future earning potential of a borrower. Banks avoid obliging students of institutes with a troubled placement record.
Central Bank’s Ratnakara also give a word of caution, though, “The real NPA position on education loans is still not clear.” He said till now nothing has come out regarding lending to students of less known colleges will add to the bad assets of banks, however, added, the “preliminary trend does not suggest anything of that sort.”
Friday, November 13, 2009
Tata Indicom in association with Cooperation Bank and PayMate launch ‘Green Money Transfer in India’
A unique person-to-person mobile money transfer service ‘Green Money Transfer’ is being launched by Tata Indicom, India's leading cellular service provider. The service will be launched in association with Cooperation Bank and PayMate, India's leading wireless transactions platform provider.
The PayMate technology, Corporation Bank’s banking system and Tata’s PCO and True Value Shop (TVS) network will enable transfer of funds via mobile. Tata Indicom is the first private telecom operator in India to enter into such partnership wherein a PCO/TVS is used as the start point for person-to-person money transfer.
With the launch of this service any mobile phone user will be able to send or receive money instantly using their mobile phone authorized to transfer. To transfer funds, the customer has to simply go to the nearest Green registered TATA PCO or TVS and place a request for money remittance (Upto Rs. 5000) to any person across the country. Likewise the recipient can collect the transferred money at the nearest Green TATA PCO or TVS with a transaction authorization code received from the sender.
During the lunch, Mr. Lloyd Mathias, Chief Marketing Officer, Tata Teleservices Limited, said, "This is a moment of pride for us, as we have become the first private telecom operator to enter into such a unique partnership and bring forth this fantastic proposition for our customers. ‘Green Money Transfer' is an industry-first and enables anyone using a cell phone to transfer money in a safe and flexible environment. Being the leading operator in the PCO segment we wanted to leverage our strength and enable a highly efficient money transferring service for the customers even in remote areas and going forward we hope to extend more such M-commerce solutions for our customers."
The aim behind launch of Green Money transfer service is mainly to target the un-banked population of the country to provide branchless banking service for them to send and receive money easily. In comparison to other money transferring services provided for remote access areas, this service is secure and speedy.
Speaking at the launch of the service, Shri J. M. Garg, Chairman & Managing Director Corporation Bank said, "This facility is being proposed as an additional service to the rural masses that can now receive remittance in their Bank account instantaneously and draw through Business Correspondents at their own place. This will enable the Bank to augment customer acquisition as well. This facility has been launched on a pilot basis in Kerala which has a large migrant population. On successful launch the facility will be spread to other areas."
At the launch Mr. Ramesh Iyer, Head-Enterprise Business, Tata Teleservices (Maharashtra) Limited said, "Both the banking and telecom sectors have seen frenetic activity over the last couple of years. The mobile screen offers a new medium to banks to proliferate their services while opening up a new and innovative revenue stream for the telecom operators. This also translates into an excellent micro banking solution to the end consumer especially in the rural areas - a vital step towards accelerating financial inclusion. It is a win-win partnership for the industry and the economy at large. The mobile screen is slated to change the way people transact and we at Tata Indicom are happy to partner and pioneer the revolution."
At the launch speaking about partnership, Ajay Adiseshann, MD & Founder, PayMate said, "PayMate has always been at the fore-front of innovations in M-commerce. Having realized the gap in the market for people who seek easy, quick and convenient means of transactions, with 'Green Money Transfer' we offer a safe, reliable and secure system for transfer of funds especially for the un-banked population in remote access areas echoing the sentiments and mandate of the Government and the Regulators. With over Rs. 600 billion (12.75 billion USD) being remitted across the country, this presents a great opportunity for all of us to tap into and we are confident that the service will redefine the way financial services are approached."
To use the service simple steps are to be followed:
Customers have to register for this service at a Green TATA PCO, TVS or with Corporation Bank. After getting registered, they will be given mPIN to enable them to authorize the transaction.
The procedure of transfer of funds:
1. Sender in Mumbai visits a Green Tata PCO or TVS and places a request for transfer of Rs. 5000 to his parents in Pune.
2. The sender hands over the cash to Green Tata PCO or TVS. The PCO or TVS triggers an IVR call to the sender.
The sender enters mPIN to authorize the transaction and a Transaction code is displayed on his mobile to be conveyed to the recipient.
The recipient visits nearest registered Tata PCO or TVS and shares the transaction code.
The PCO or TVS triggers an IVR call to the receiver who enters his/her mPIN to verify the transaction
6. After verification the cash is handed over to the recipient.
The PayMate technology, Corporation Bank’s banking system and Tata’s PCO and True Value Shop (TVS) network will enable transfer of funds via mobile. Tata Indicom is the first private telecom operator in India to enter into such partnership wherein a PCO/TVS is used as the start point for person-to-person money transfer.
With the launch of this service any mobile phone user will be able to send or receive money instantly using their mobile phone authorized to transfer. To transfer funds, the customer has to simply go to the nearest Green registered TATA PCO or TVS and place a request for money remittance (Upto Rs. 5000) to any person across the country. Likewise the recipient can collect the transferred money at the nearest Green TATA PCO or TVS with a transaction authorization code received from the sender.
During the lunch, Mr. Lloyd Mathias, Chief Marketing Officer, Tata Teleservices Limited, said, "This is a moment of pride for us, as we have become the first private telecom operator to enter into such a unique partnership and bring forth this fantastic proposition for our customers. ‘Green Money Transfer' is an industry-first and enables anyone using a cell phone to transfer money in a safe and flexible environment. Being the leading operator in the PCO segment we wanted to leverage our strength and enable a highly efficient money transferring service for the customers even in remote areas and going forward we hope to extend more such M-commerce solutions for our customers."
The aim behind launch of Green Money transfer service is mainly to target the un-banked population of the country to provide branchless banking service for them to send and receive money easily. In comparison to other money transferring services provided for remote access areas, this service is secure and speedy.
Speaking at the launch of the service, Shri J. M. Garg, Chairman & Managing Director Corporation Bank said, "This facility is being proposed as an additional service to the rural masses that can now receive remittance in their Bank account instantaneously and draw through Business Correspondents at their own place. This will enable the Bank to augment customer acquisition as well. This facility has been launched on a pilot basis in Kerala which has a large migrant population. On successful launch the facility will be spread to other areas."
At the launch Mr. Ramesh Iyer, Head-Enterprise Business, Tata Teleservices (Maharashtra) Limited said, "Both the banking and telecom sectors have seen frenetic activity over the last couple of years. The mobile screen offers a new medium to banks to proliferate their services while opening up a new and innovative revenue stream for the telecom operators. This also translates into an excellent micro banking solution to the end consumer especially in the rural areas - a vital step towards accelerating financial inclusion. It is a win-win partnership for the industry and the economy at large. The mobile screen is slated to change the way people transact and we at Tata Indicom are happy to partner and pioneer the revolution."
At the launch speaking about partnership, Ajay Adiseshann, MD & Founder, PayMate said, "PayMate has always been at the fore-front of innovations in M-commerce. Having realized the gap in the market for people who seek easy, quick and convenient means of transactions, with 'Green Money Transfer' we offer a safe, reliable and secure system for transfer of funds especially for the un-banked population in remote access areas echoing the sentiments and mandate of the Government and the Regulators. With over Rs. 600 billion (12.75 billion USD) being remitted across the country, this presents a great opportunity for all of us to tap into and we are confident that the service will redefine the way financial services are approached."
To use the service simple steps are to be followed:
Customers have to register for this service at a Green TATA PCO, TVS or with Corporation Bank. After getting registered, they will be given mPIN to enable them to authorize the transaction.
The procedure of transfer of funds:
1. Sender in Mumbai visits a Green Tata PCO or TVS and places a request for transfer of Rs. 5000 to his parents in Pune.
2. The sender hands over the cash to Green Tata PCO or TVS. The PCO or TVS triggers an IVR call to the sender.
The sender enters mPIN to authorize the transaction and a Transaction code is displayed on his mobile to be conveyed to the recipient.
The recipient visits nearest registered Tata PCO or TVS and shares the transaction code.
The PCO or TVS triggers an IVR call to the receiver who enters his/her mPIN to verify the transaction
6. After verification the cash is handed over to the recipient.
Tuesday, November 3, 2009
Govt. to provide security cover to education loans
The government is planning to reduce public sector banks worries against any default on education loans. The PSBs are often not willing to give these loans as such loans do not have enough guarantees. Therefore the government is proposed to provide cover to education loan under a new credit guarantee scheme, following this government has asked the Indian Banks’ Association (IBA) to prepare a draft proposal, informed a senior official with the finance ministry. It is expected this will make easy to take education loan.
There have been sharp increase in education loan offtake of up to Rs 32,460 crore which is mainly a unsecured loan (without any collateral), thus senior officials of PSBs have expressed their worries as such a large loan amount can impact the strength of the banks, especially in case of default as no collateral security is attached to such loans.
IBA chairman MV Nair, who is also the chairman and managing director of Union Bank, informed that body is preparing the draft of the scheme. He added, “The IBA will form a committee of experts that will formulate such schemes. We are in the initial stages”.
The government is thinking of working out a similar mechanism as of the credit guarantee scheme for micro and small enterprises (MSEs), stated a government official.
Under credit guarantee schemes, the Small Industries Development Bank of India (SIDBI) provides protection to the credit worthiness of borrower in case of default.
By charging a marginal fee, SIDBI gives guarantee up to 85% for loan up to Rs 5 lakh and 75% for Rs 5 to Rs 50 lakh. In the case of Rs 50 lakh to Rs 1 crore loans, the cover provided is at the rate of 75% for the first Rs 50 lakh and 50% for the balance amount.
The education loan scheme under which financial support is provided from the banking system to deserving meritorious students for pursuing higher education in India and abroad, was introduced in 2001.
Under this scheme banks do take any collateral or guarantee from the borrower for loan up to Rs 4 lakh, but for loan between Rs 4-7.5 lakh, banks can ask for guarantee or collateral and beyond this, banks definitely take collateral. In consultation with the government, IBA has suggested its member banks that they should not reject education loan application or pass on to the other PSU bank on flimsy grounds.
A top banker pointed out, “In February, following IBA’s directive, some banks have started giving 50% concession in interest rates on education loans to girl students for pursuing higher education in India or abroad but most banks are still reluctant”.
The banker said as the average size of the education loan is less than Rs 2 lakh, therefore it effectively means that these loans do not have enough collateral or guarantees.
As PSBs or individual banks together have major exposures in education loan therefore some protective mechanism is required.
As on March 2009 the total outstanding education loans of public sector banks amounted to Rs 27,646 crore, a 39.51% increase from Rs 19,817 crore. Banks such as Punjab National Bank and Oriental Bank of commerce were having exposures of Rs 1,901.56 crore and Rs 910 crore, respectively, by the end of September 2009.
There have been sharp increase in education loan offtake of up to Rs 32,460 crore which is mainly a unsecured loan (without any collateral), thus senior officials of PSBs have expressed their worries as such a large loan amount can impact the strength of the banks, especially in case of default as no collateral security is attached to such loans.
IBA chairman MV Nair, who is also the chairman and managing director of Union Bank, informed that body is preparing the draft of the scheme. He added, “The IBA will form a committee of experts that will formulate such schemes. We are in the initial stages”.
The government is thinking of working out a similar mechanism as of the credit guarantee scheme for micro and small enterprises (MSEs), stated a government official.
Under credit guarantee schemes, the Small Industries Development Bank of India (SIDBI) provides protection to the credit worthiness of borrower in case of default.
By charging a marginal fee, SIDBI gives guarantee up to 85% for loan up to Rs 5 lakh and 75% for Rs 5 to Rs 50 lakh. In the case of Rs 50 lakh to Rs 1 crore loans, the cover provided is at the rate of 75% for the first Rs 50 lakh and 50% for the balance amount.
The education loan scheme under which financial support is provided from the banking system to deserving meritorious students for pursuing higher education in India and abroad, was introduced in 2001.
Under this scheme banks do take any collateral or guarantee from the borrower for loan up to Rs 4 lakh, but for loan between Rs 4-7.5 lakh, banks can ask for guarantee or collateral and beyond this, banks definitely take collateral. In consultation with the government, IBA has suggested its member banks that they should not reject education loan application or pass on to the other PSU bank on flimsy grounds.
A top banker pointed out, “In February, following IBA’s directive, some banks have started giving 50% concession in interest rates on education loans to girl students for pursuing higher education in India or abroad but most banks are still reluctant”.
The banker said as the average size of the education loan is less than Rs 2 lakh, therefore it effectively means that these loans do not have enough collateral or guarantees.
As PSBs or individual banks together have major exposures in education loan therefore some protective mechanism is required.
As on March 2009 the total outstanding education loans of public sector banks amounted to Rs 27,646 crore, a 39.51% increase from Rs 19,817 crore. Banks such as Punjab National Bank and Oriental Bank of commerce were having exposures of Rs 1,901.56 crore and Rs 910 crore, respectively, by the end of September 2009.
Subscribe to:
Posts (Atom)