For 2008-09 public sector banks (PSBs) have reported a jump of 50% in the education loans. Thus figures depict the efforts made by government to take higher education to the masses.
According to government and the Reserve Bank of India the education loan has been categorized under the priority sector lending therefore banks have been instructed to lend at least 40% of their total loans to sectors such as education, housing and small industries.
According to finance ministry official it is expected by the end of 2008-09 the education loan portfolio of PSBs will touch Rs 30,000 as against Rs 19,816 crore in 2007-08.
An anonymous official said, “This is for the first time that it has crossed the Rs 25,000-crore mark. This has been possible because of the aggressive disbursal plans of PSBs”.
According to information provided by the Indian Banks Association (IBA) as on December 31, 2008 PSBs distributed education loan of around Rs 26,303.62.
In March 2004 the figure stood at Rs 4,550 crore since then there has been of about 600% growth in education loans.
Over the years the ratio of education loans as a percentage of banks’ total advances has shown an improvement. In 2004 PSBs education loans consisted of 0.64% of the total advances. But on December 31, 2008 it doubled to about 1.25%. The loan was mostly taken for higher studies.
Member Banks of IBA have been instructed to give a rebate of at least half percentage point on interest for education loans given for the girl child.
