Rising defaults in study loans
With a rising proportion of non-performing assets (NPAs) in education loans, banks have approached the government, seeking protection in the form of a credit guarantee fund of at least Rs 2,500 crore.
According to estimates given by bankers to the Union finance ministry, NPAs had risen above two per cent of the educational loan portfolio, as on March 31, from an insignificant figure before 2004-05, when a set of more liberal rules gave such loans a boost. By way of comparison, Reserve Bank of India data cialis pro showed the ratio of net NPAs of commercial banks to net advances rose only marginally to 1.1 per cent as at end-March 2009, from 1 per cent as at end March 2008, while gross NPAs to gross advances remained constant at 2.3 per cent.In the educational loan scheme, it is possible to borrow cialis dosage information up to Rs 10 lakh for domestic education and Rs 20 lakh for studying in foreign colleges. Borrowers need not pay during the tenure of the course plus one year after. The repayment period is five to seven years.
For loans up to Rs 4 lakh, banks cannot ask for any collateral. This particular clause is thought by bankers to have made loans more prone to be defaulted. State Bank of India is the largest in the segment, with around 25 per cent of the market. Banks have requested the government to create a credit guarantee fund for educational loans, on the lines of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) jointly set up by the government and Small Industries Development Bank of India (Sidbi).
Source: Business Standards
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