Chief Minister Oommen Chandy has called upon banks to formulate a uniform policy for education loans to help needy students.
“Many banks and even branches of the same bank cite different reasons to turn down applications for education loans from students. The interest rates and repayment terms also vary between banks. Only a common policy will help address this issue,” he told a review meeting of the State Level Bankers Committee (SLBC) here on Monday.
Calling upon banks to adopt a lenient attitude to the family in the event of the death of a student loanee, Mr. Chandy reiterated the government’s request not to pass on the repayment liability to the family.
Mr. Chandy also urged banks to lower the interest rates on the housing scheme for weaker sections under which the government would repay the loan under an annuity model. He proposed a subcommittee comprising representatives of SLBC and government officials to work out the details of various credit schemes for the needy sections.
In his address, Finance Minister K.M. Mani urged banks to address the fall in credit-deposit ratio and the slow down in the growth of education loan disbursement.
Canara Bank Executive Director P.S. Rawat presided over the meeting. A. Alok Sheel, Additional Chief Secretary (Planning and Economic Affairs); Ashok Kumar Singh, Additional Director, Prime Minister’s Jan Dhan Yojana; and Nirmal Chand, Regional Director, Reserve Bank of India, were present.
According the SLBC report, the CD ratio has dropped marginally from 68.66 per cent in March 2014 to 68.37 in March 2015.
Pathanamthitta district has the lowest CD ratio of 32.25 per cent while Idukki has the highest ratio of 131.5.
High NPA
The report attributes the slow down in the growth of education loan to high NPA (non-performing assets) in the sector and lesser enrolment of students in colleges outside Kerala. Advances to micro-enterprises show a decline from Rs.12,499 crore in March 2014 to Rs.11,638 crore in March 2015.
NRE deposits in commercial banks in Kerala up to March 2015 accounted for Rs.1,09,603 crore, out of the total deposits of Rs.3,19,890 crore, the meeting was informed. Total advances to the priority sector touched Rs.1,28,655 crore.
Commercial banks in the State disbursed Rs.97,691 crore to the priority sector in 2014-15, out of which Rs.49,080 crore was for the agriculture sector.
The secondary sector received Rs.17,574 crore and Rs.31,037 crore went to the tertiary sector, the meeting was told.
