Madras High Court directed a bank to give loan to an engineering college student in a week’s time after the applicant took back the complaint against bank officials.
Disposing an appeal, Justice K Venkatraman noted the evidence of the bank made through its lawyer and ordered it to sanction the education loan.
In his petition, R Premkumar of Kollamcode in Kanniyakumari District, a diploma-holder in mechanical engineering, said he had taken admission in the II-year BE course in the Dr Sivanthi Aditanar College of Engineering, Tiruchendur, during 2007-2008.
He had applied for a loan in the Kollamcode Branch of the State Bank of Travancore, under the Gyan Jyothi Education Loan Scheme. His father had an account in the bank branch for 20 years.
But, the manager had kept delaying the matter without any valid reason. He and his father met the official several times, but the officer did not get a proper reply for the delay.
Therefore he had to borrow Rs 40,000 from a private lender to pay his fees.
He filed a complaint against the manager with the bank Head Office at Thiruvananthapuram.
The head office forwarded the complaint to the Deputy General Manager, Zonal Office, Chennai.
Premkumar brought the matter into the notice of the Banking Ombudsman Manger, Chennai, but there also the matter was treated as closed without an enquiry.
He appealed the court to order the bank for sanctioning the loan for the academic years 2008-09 and 2009-10 so that he can complete his course.
When the matter was put before the Justice K Venkataraman, counsel for the bank, in its defense submitted an application that in view of the petitioner complaints against the bank officials, the amount could not be given.
If the petitioner withdraws his complaints, he said, there won’t be any problem in granting the loan. In turn the petitioner’s counsel agreed to the requirement.
Thursday, August 28, 2008
Friday, August 22, 2008
Banks to spare both new and existing education loans from rate hikes
Now students can plan for higher studies as almost all commercial banks including State Bank of India (SBI) and Punjab National Bank (PNB), have not increased interest rates on education loan on the existing as well as new.
Banks have taken this decision on finance ministry advice not to touch the interest rates for priority sector lending, particularly education, agriculture and housing, up to Rs 30 lakh. Most of the private sector lenders do not give education loan and the market is dominated by public sector banks.
The finance ministry senior official told ET, “Almost all the public sector banks have agreed to our suggestion of not raising interest rates for most of the sectors coming under priority sector lending including education loans. This will apply to existing as well as new loans”.
The matter was taken up in finance minister’s meeting with the chief executives of public sector banks earlier this month. All the banks have taken a unanimous decision of not hiking the rates of education loans. “One or two banks were having some objections which is also likely to be shorted out soon,” the official said.
Recently, after RBI hiked the rates in July, banks including SBI, PNB, Allahabad Bank and Bank of Baroda have raised their prime lending rates by 75 to 100 basis points and subsequently revised interest rates on sector-specific loans. But all of them did not touch the education loan. Besides this some of the banks chose not to touch the existing and new auto loans also. In case of new home loans, interest rates for amount up to Rs 30 lakh have been left untouched as it comes under priority sector lending.
Banks have taken this decision on finance ministry advice not to touch the interest rates for priority sector lending, particularly education, agriculture and housing, up to Rs 30 lakh. Most of the private sector lenders do not give education loan and the market is dominated by public sector banks.
The finance ministry senior official told ET, “Almost all the public sector banks have agreed to our suggestion of not raising interest rates for most of the sectors coming under priority sector lending including education loans. This will apply to existing as well as new loans”.
The matter was taken up in finance minister’s meeting with the chief executives of public sector banks earlier this month. All the banks have taken a unanimous decision of not hiking the rates of education loans. “One or two banks were having some objections which is also likely to be shorted out soon,” the official said.
Recently, after RBI hiked the rates in July, banks including SBI, PNB, Allahabad Bank and Bank of Baroda have raised their prime lending rates by 75 to 100 basis points and subsequently revised interest rates on sector-specific loans. But all of them did not touch the education loan. Besides this some of the banks chose not to touch the existing and new auto loans also. In case of new home loans, interest rates for amount up to Rs 30 lakh have been left untouched as it comes under priority sector lending.
Thursday, July 24, 2008
Govt to provide interest subsidy on educational loan for students of weaker section
In a conference of state ministers of higher education Human Resources Development Minister Arjun Singh said the government will be launching a scheme under which it will be providing subsidy on educational loans taken by economically weaker sections and also start a scholarship scheme to help poor and meritorious students so that they can take admission in professional courses.
The government will also start a national merit scholarship scheme under which about 41,000 boys and the same number of girls will be given scholarship based on their performance at the intermediate examination.
He said under the scheme each student will get Rs 1,000 per month for ten months for the first two years and Rs 2,000 monthly for the subsequent period. Under the scheme the top two per cent of the students of class XII will be covered.
The government has already another scholarship program running since 2006 for single girl children securing more than 60 per cent marks in class X and XII. Besides, the government has increased the M. Tech assistance from Rs 5,000 to Rs 8,000.
The government will also start a national merit scholarship scheme under which about 41,000 boys and the same number of girls will be given scholarship based on their performance at the intermediate examination.
He said under the scheme each student will get Rs 1,000 per month for ten months for the first two years and Rs 2,000 monthly for the subsequent period. Under the scheme the top two per cent of the students of class XII will be covered.
The government has already another scholarship program running since 2006 for single girl children securing more than 60 per cent marks in class X and XII. Besides, the government has increased the M. Tech assistance from Rs 5,000 to Rs 8,000.
Wednesday, July 23, 2008
AB launched awareness program on educational loans
With the starting up of new session of the colleges Andhra Bank has launched its awareness program on educational loans. Bank on Wednesday started its program at Sri Venkateswara Government Polytechnic, the venue of Eamcet counseling.
At the launch of the program Andhra Bank Chief Manager YH Ramakrishna said the bank has introduced Pattabhi Vidya Jyothi Scheme with an aim to provide loans to students for pursuing higher education. A sum of Rs 1,000 crore was lent last year under the scheme.
Last year in Tirupati Zone comprising Chittoor, Nellore and Kadapa districts, the bank has issued loans to the tune of Rs 25 crore last year. For women students, the bank is charging 0.05 per cent interest rebate.
The students have to repay the loan amount one year after the completion of the course or six months after employment whichever is earlier. The awareness camp will be working till August 7. During the launch of the program senior manager Suresh and bank officer Ravikumar were also present.
At the launch of the program Andhra Bank Chief Manager YH Ramakrishna said the bank has introduced Pattabhi Vidya Jyothi Scheme with an aim to provide loans to students for pursuing higher education. A sum of Rs 1,000 crore was lent last year under the scheme.
Last year in Tirupati Zone comprising Chittoor, Nellore and Kadapa districts, the bank has issued loans to the tune of Rs 25 crore last year. For women students, the bank is charging 0.05 per cent interest rebate.
The students have to repay the loan amount one year after the completion of the course or six months after employment whichever is earlier. The awareness camp will be working till August 7. During the launch of the program senior manager Suresh and bank officer Ravikumar were also present.
Monday, July 14, 2008
Banks reluctant regarding disbursement of loans for aviation studies
In the recent times there has been a boom in the aviation industry because of which more and more students are taking up aviation courses. But banks classify aviation as career training and not professional education for the purpose of loan disbursement, so they have categorized these loans as personal loans and seek collateral accordingly.
Banks have been reluctant regarding disbursement of loans for aviation studies which in due course will be hampering the job prospects in the aviation sector. According to analysts this type of attitude of banks might affect the fortunes of aviation training institutes.
In India there are more than six branded aviation training institutes. As per industry experts, in the last six months 12 new institutes have started. Most of these institutes are offering one-year diplomas after higher secondary (+2), to train the candidates aged 17 to 24 years as cabin crew. The institutes charge fees anywhere, between Rs 1 lakh and 1.25 lakh per student.
There are some institutes who offer part-time courses. These jobs pay around Rs 16,000 a month. Approximately, over 70,000 students have been trained in the last two years alone.
Bank of Baroda executive said, "With a drastic change in the business environment, students who took loans for cabin crew (purser/air hostess) courses may not get jobs in the aviation sector. Instead, they may end up in the hospitality sector, which offers lower salaries compared to airline jobs. This has adverse implications on the repayment schedule. So we are going slowly on loans in this space."
Ananthakrishna, chief executive, Karnataka Bank stated, "There have been reports that a US-based airline training institute, which had many Indian students, had shut operations. The economic conditions (for aviation sector) have become uncertain and in such circumstances, banks have to be cautious in granting financial assistance for such courses."
The Reserve Bank of India has formulated prudential norms which makes it compulsory for banks to set aside a high risk weight age amount (125 points) for personal loans. Banks charge higher rates to cover the costs and risks.
Therefore the interest rates will be higher than prime lending rates (PLRs) currently which are ranging between 12-50 and 16.50 per cent. Hence the amount of loans for airline courses, especially pilot and other technical courses, is on the higher side.
According to the credit head of a private bank most of the students who take such loans come from financially well off families therefore they are capable to pay back the dues.
Banks have been reluctant regarding disbursement of loans for aviation studies which in due course will be hampering the job prospects in the aviation sector. According to analysts this type of attitude of banks might affect the fortunes of aviation training institutes.
In India there are more than six branded aviation training institutes. As per industry experts, in the last six months 12 new institutes have started. Most of these institutes are offering one-year diplomas after higher secondary (+2), to train the candidates aged 17 to 24 years as cabin crew. The institutes charge fees anywhere, between Rs 1 lakh and 1.25 lakh per student.
There are some institutes who offer part-time courses. These jobs pay around Rs 16,000 a month. Approximately, over 70,000 students have been trained in the last two years alone.
Bank of Baroda executive said, "With a drastic change in the business environment, students who took loans for cabin crew (purser/air hostess) courses may not get jobs in the aviation sector. Instead, they may end up in the hospitality sector, which offers lower salaries compared to airline jobs. This has adverse implications on the repayment schedule. So we are going slowly on loans in this space."
Ananthakrishna, chief executive, Karnataka Bank stated, "There have been reports that a US-based airline training institute, which had many Indian students, had shut operations. The economic conditions (for aviation sector) have become uncertain and in such circumstances, banks have to be cautious in granting financial assistance for such courses."
The Reserve Bank of India has formulated prudential norms which makes it compulsory for banks to set aside a high risk weight age amount (125 points) for personal loans. Banks charge higher rates to cover the costs and risks.
Therefore the interest rates will be higher than prime lending rates (PLRs) currently which are ranging between 12-50 and 16.50 per cent. Hence the amount of loans for airline courses, especially pilot and other technical courses, is on the higher side.
According to the credit head of a private bank most of the students who take such loans come from financially well off families therefore they are capable to pay back the dues.
Thursday, June 12, 2008
Education loan to get admission in your dream course
Recently most of the professional institutes have increased their course fees. Therefore for most of the students the professional courses are becoming out of reach. The only option for this is education loan. How to get education loan?
Most of the banks are offering education loan online and some of the banks have opened their counters on the university/college premises for distribution of loans. You can even walk to any bank branch with in your reach and fill the application form for loan.
Many of the public sector banks are offering education loans up to Rs20, 00,000, whereas, private sector banks are relatively smaller players on education loans. On the loan amount up to Rs4, 00,000 no collateral is needed but on the amount up to Rs7, 50,000 third party guarantees is enough. Then some additional security by a third party or parents is needed.
The tenure for the repayment of the amount is six months after completing the course, before which only simple interest is charged. Parents can avail tax benefits on this interest. The interest charged is between 10.50% and 11.50% for the loan and there is no penalty for foreclosure of the loan.
Education loan is given for equipment and hostel fees as well. The maximum limit for domestic loans is Rs 10, 00,000 and for international courses Rs20, 00,000. The loan has to be repaid back in a maximum of 5 to 7 years. Though most of the banks offer similar interest rates but before choosing the bank do the research of interest rates and make sure you’ve estimated correctly the expense of your course and any details the bank has relating to tenure and commencement of repayment of the loan.
Most of the banks are offering education loan online and some of the banks have opened their counters on the university/college premises for distribution of loans. You can even walk to any bank branch with in your reach and fill the application form for loan.
Many of the public sector banks are offering education loans up to Rs20, 00,000, whereas, private sector banks are relatively smaller players on education loans. On the loan amount up to Rs4, 00,000 no collateral is needed but on the amount up to Rs7, 50,000 third party guarantees is enough. Then some additional security by a third party or parents is needed.
The tenure for the repayment of the amount is six months after completing the course, before which only simple interest is charged. Parents can avail tax benefits on this interest. The interest charged is between 10.50% and 11.50% for the loan and there is no penalty for foreclosure of the loan.
Education loan is given for equipment and hostel fees as well. The maximum limit for domestic loans is Rs 10, 00,000 and for international courses Rs20, 00,000. The loan has to be repaid back in a maximum of 5 to 7 years. Though most of the banks offer similar interest rates but before choosing the bank do the research of interest rates and make sure you’ve estimated correctly the expense of your course and any details the bank has relating to tenure and commencement of repayment of the loan.
Tuesday, June 10, 2008
Educational loan queries increase, route to course of choice
Board results declared students have started heading towards colleges and universities for admission so as the queries for educational loan from the banks have also gone up. According to bank sources in the past few months there has been increase in the demand for educational loans, some say by almost 50% over last year. Mostly the queries are coming from those students who are looking beyond Delhi University (DU), into the vast range of choices offered by other universities.
For instance Aditi Kalra (name changed), a class XII student from Delhi, who has scored 72% in her Board exams. Kalra wants to take admission in Economics (Honours) program in a good college, but have less hope of getting it because of her average marks. “And since the cut-offs go up every year, it's bound to be tougher to get admission in an A-list college this year,” says the Commerce student. Hence Kalra has already drawn up an alternate plan of applying to private institutes, where she hopes to get the program of her choice.
Like Kalra there are many more enquiring about loans Sandeep Puri, an official at the Oriental Bank of Commerce says, “The number of queries about educational loans has gone up by 50% from last year.” It is not only the OBC which is reporting an increase in number of applications and queries for loans even the Punjab and National bank (PNB) has already processed 879 applications in the month of April, 2008, disbursing Rs 21 crore as education loans. According to a senior official at the bank the figure is likely to go up further, especially with the admission season just taking off in most universities in the country.
According to Bank officials in the past few years the number is going up steadily. SBI, had distributed loan of Rs 113 crore last year in the Delhi region, says, “There has been an appreciable upwards movement in the number of loans being disbursed this year.”
According to SBI chief general manager (personal banking), Nanda Kumar, it would be too early to talk about figures, but by looking at the trend it is quite clear more students are opting to take the educational loan route to fulfill their dreams.
He adds, “Since the terms of loan are quite simple, students prefer to pay off a loan than put extra pressure on their parents.”
It is not difficult to find the reason behind the increase in the loan applications. The DU officials acknowledge the crisis for seats in the university has forced many students to opt for private institutes. There are only 43,000 seats available and over 1.5 lakh applicants, it's a tall order indeed
Says S K Vij, dean of students welfare, “Getting through into a college in Delhi University is getting progressively more difficult. In such a scenario, students will look at any option, even a private institute for a good course.”
For instance Aditi Kalra (name changed), a class XII student from Delhi, who has scored 72% in her Board exams. Kalra wants to take admission in Economics (Honours) program in a good college, but have less hope of getting it because of her average marks. “And since the cut-offs go up every year, it's bound to be tougher to get admission in an A-list college this year,” says the Commerce student. Hence Kalra has already drawn up an alternate plan of applying to private institutes, where she hopes to get the program of her choice.
Like Kalra there are many more enquiring about loans Sandeep Puri, an official at the Oriental Bank of Commerce says, “The number of queries about educational loans has gone up by 50% from last year.” It is not only the OBC which is reporting an increase in number of applications and queries for loans even the Punjab and National bank (PNB) has already processed 879 applications in the month of April, 2008, disbursing Rs 21 crore as education loans. According to a senior official at the bank the figure is likely to go up further, especially with the admission season just taking off in most universities in the country.
According to Bank officials in the past few years the number is going up steadily. SBI, had distributed loan of Rs 113 crore last year in the Delhi region, says, “There has been an appreciable upwards movement in the number of loans being disbursed this year.”
According to SBI chief general manager (personal banking), Nanda Kumar, it would be too early to talk about figures, but by looking at the trend it is quite clear more students are opting to take the educational loan route to fulfill their dreams.
He adds, “Since the terms of loan are quite simple, students prefer to pay off a loan than put extra pressure on their parents.”
It is not difficult to find the reason behind the increase in the loan applications. The DU officials acknowledge the crisis for seats in the university has forced many students to opt for private institutes. There are only 43,000 seats available and over 1.5 lakh applicants, it's a tall order indeed
Says S K Vij, dean of students welfare, “Getting through into a college in Delhi University is getting progressively more difficult. In such a scenario, students will look at any option, even a private institute for a good course.”
Subscribe to:
Posts (Atom)