Financial Daily from THE HINDU group of publications
Monday, Dec 05, 2005
Financial Daily from THE HINDU group of publications Monday, Dec 05, 2005 |
|
|
|
|
|
|
|
Home Page
-
Education Money & Banking - Non-Performing Assets Industry & Economy - Economic Offences Banks gear up to curb education loan defaults — Notations on mark sheets, bar-coding passports likely Sarbajeet K. Sen
New Delhi , Dec. 4 PLANNING to get an education loan from a public sector bank? Be prepared to hand over your original mark-sheet to the lender or to have your passport embossed with a bar code that could help lenders track you down if you default on payments. These measures figure among the suggestions being considered by the banking industry to track down a new and unique brand of offenders evading the long hand of lending institutions. The offenders in question are the defaulters of the much-publicised education loan schemes offered by public sector banks. A hot chase is on across the globe for tracking down the growing breed of defaulters who had availed themselves of education loans for pursuing higher studies both within the country and abroad. That defaults under the scheme have reached a level is causing serious concern within the industry. Consequently, the issue had come up for discussion during the recent meeting of the Finance Minister, Mr P. Chidambaram, with the executives of public sector banks. However, figures on aggregate defaults on the educational loans were not available. The Indian banking system is often helpless in tracking down defaulters. Lenders have cited instances when even parents who have signed as guarantors for the loans have been unable to provide the address of offsprings. Besides bar-coding the mark-sheets or keeping them in safe custody of the lenders, the other suggestions put forward by the banks include radio-frequency identification (RFID) for the loan availed or a notation in the degree certificate of the borrower that would provide the loan details. Banks have pointed out that the notation regarding loans on degree certificates of students would help the employers to notify the bank on the whereabouts of the borrowers. They have pointed out that such a system to track borrowers is already in place in other countries. Other than attracting soft rates, educational loans up to Rs 7.5 lakh are extended to meritorious students without the requirement of collaterals. The popularity of education loans is on the rise ever since the scheme was introduced in 2001. During 2004-05, the 27 PSU banks together had sanctioned 1,69,768 fresh loans for an aggregate amount of Rs 3,525.91 crore against 1,07,929 fresh loans amounting to Rs 2,032.94 crore in the previous year. During the first year of the scheme, banks had sanctioned 48,649 loans of Rs 668 crore.
Related Stories:
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page More Stories on : Education | Non-Performing Assets | Economic Offences
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2005, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|