APN News

IBA urges for strict norms on education loans under management quota

New Delhi : The Indian Banks’ Association (IBA) has asked its members to impose stricter terms on loans given to students getting admission under the management quota. In a guidance note published on its website, IBA has said that model scheme for the higher studies does not cover admissions under the management quota.

It has expressed concerns that loans given to such students under the model education loan scheme could turn bad as their employment potential is relatively less. Banks have also been directed to fix appropriate terms and conditions for such loans.

Non-Performing Assets, NPA in education loans, are as high as 6 per cent. To bring down NPA in education loan, the government is also considering the option of setting up of credit guarantee trust.

It is aimed at meeting all genuine study expenses of a student required to complete the study undertaken. The fee structure varies with type of college or institution within the same state for a given course.

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