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Chidambaram launches education loan campaign

Special Correspondent
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Says Tamil Nadu tops the list in loan disbursal rate

Priority for studies:Union Finance Minister P.Chidambaram addressing an education loan campaign in Karaikudi on Monday.— Photo: L. Balachandar
Priority for studies:Union Finance Minister P.Chidambaram addressing an education loan campaign in Karaikudi on Monday.— Photo: L. Balachandar

Union Finance Minister P Chidambaram has asked bankers not to be tied down by procedural formalities such as service area restrictions for sanctioning education loans and wanted them to increase disbursal rate in the larger interest of the student community.

In his address after launching an education loan campaign at Allagappa University in Karaikudi on Monday, he said, “When banks are boasting about Core Banking System (CBS), they cannot refuse loans citing service area norms. The students are free to walk into any bank branch and avail education loan as long as they fulfilled the eligibility criteria.”

In the education loan campaign, 21 nationalised and private banks put up stalls to clear applications for education loans under a single window system. After perusing the applications, the banks will provisionally sanction loans in two days and actual disbursement within a week.

Mr. Chidambaram, who distributed total loans of Rs 1.02 crore to 42 students after launching the campaign, said that parents of the beneficiaries were mason, conductor, agriculture worker and noon meal organisers and wanted the media to convey the message that students from such poor background could approach banks and avail education loans to pursue their higher studies.

Norms had been simplified for maximum disbursement of education loans. Students who secured admission through management quota were also being given loans. Banks were also giving loans to students who want to take up diploma and nursing courses. To minimise the rejection rate, branch managers had been vested with power only to sanction education loan and not to reject it. Only the higher authorities could decide on rejecting an application, he said.

Students who availed loans had a moratorium period of one-and-a-half year to start repaying it. Bankers, however, could relax this period.

A total of 24,62,948 students had been given loans amounting to Rs. 52,480 crore in the country — Tamil Nadu topped the list with Rs. 13,554 crore. However, the situation in northern States, especially in Punjab, Haryana, Himachal Pradesh and Uttar Pradesh, was not encouraging, he said.

Kalam, Panda

Underlining the importance of education and citing the success stories of former President A.P.J. Abdul Kalam, who pursued his studies after working as a newspaper delivery boy, and world-renowned cardiac surgeon Ramakanta Panda from Odisha who walked 16 km to school everyday and studied with the aid of scholarships, Mr Chidambaram called upon the students to concentrate on their studies. The surgeon, hailing from the most backward Odisha, had performed a complicated heart surgery on Prime Minister Manmohan Singh, the Minister said.

M. Narendra, Chairman and Managing Director, Indian Overseas Bank, said that the loan campaign, suggested by the Finance Minister, would go a long way in reaching out to the targeted students. He said the IOB was giving loan upto Rs. two lakh for students who go for coaching classes for IAS examinations.

T.M.B. Bhasin, Chairman and Managing Director, Indian Bank, said that the bank had taken the lead in lending 4 per cent of its loan book (Rs. 3,800 crore) as education loan to three lakh students. The bank would continue to be the front runner in education loan portfolio and ensure that not a single application was rejected.

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