Banks disbursed education loans below target in FY22

₹1,047.33 crore disbursed from 68,405 accounts, while target was ₹1,666 crore from 2,17,511 accounts

₹1,047.33 crore disbursed from 68,405 accounts, while target was ₹1,666 crore from 2,17,511 accounts

State banks disbursed education loans of ₹1,047.33 crore to 68,405 accounts in the priority sector in FY 2021-22, below target for the year.

According to data from the State Level Bankers Committee – Tamil Nadu (SLBC), the target set under the annual credit plan was ₹1,666 crore from 2,17,511 education loan accounts under the category priority sectors for 2021-2022.

Banks must earmark a specific portion of their lending to sectors deemed important by the Reserve Bank of India, in accordance with the Priority Sector Lending Guidelines. Loans to individuals for educational purposes, including vocational courses, not exceeding ₹20 lakh are considered eligible for priority sector classification.

Tamil Nadu is the largest market for education loans and accounts for one third of total disbursements in India.

According to the SLBC, according to information received from its member banks, overall, education loans amounting to ₹2,288.80 crore were disbursed in the financial year 2021-22, of which 861 ₹.89 crore was granted to female students. New loan sanctions were in the range of ₹1,321.37 crore during the year.

In the priority sector education loan category, non-performing assets fell to ₹3,920.34 crore in March 2022 from ₹4,040.60 crore in December 2021. declined by nearly 5% to ₹13,221 crore in March 2022 from ₹13,880.35 crore in December 2021, according to the data.

In line with the education loan scheme model formulated by the Association of Indian Banks, collateral free loans of up to ₹7.5 lakh are offered under the credit guarantee fund scheme for education loans. ‘education. A one-year moratorium for repayment after the end of studies in any case, and a moratorium taking into account periods of unemployment/underemployment, for two or three times during the life of the loan, are also available.

For students belonging to economically weaker sections, an interest subsidy scheme for study loans is in place. Under this scheme, full interest subsidy is available during the moratorium period on education loans up to ₹7.50 lakh, disbursed from 1 April 2009.

At a recent meeting of the SLBC, it was pointed out that lending under education loans needs to be significantly improved.

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