New Delhi, Aug 5 (Mayank Nigam) Public sector banks (PSBs) have disbursed Rs 28,699 crore in education loans for the 2023–24 fiscal year, Minister of State for Finance Pankaj Chaudhary said here on Monday. Replying to an unstarred question in Lok Sabha, Chaudhary informed, “PSBs have observed a year-on-year (Y-o-Y) growth of 14.8 per cent in the amount disbursed for education loans for higher studies during the financial year 2023–24.” “The number of loan accounts registered an increase of 17 per cent year-over-year from 6,29,594 in 2022–23 to 7,36,580 in 2023–24,” he said.
The MoS further said, “All Scheduled Commercial Banks (SCBs) have been advised by the Reserve Bank of India to adopt the Model Education Loan Scheme, formulated by the Indian Banks’ Association (IBA).” Highlighting features of the scheme, Chaudhary said, “The scheme provides need-based education loans. No collateral security or third-party guarantee is required for loans up to Rs 7.50 lakh, provided they are eligible for the Central Sector Interest Subsidy Scheme (CSIS) or the Credit Guarantee Fund Scheme for Education Loan (CGFSEL).” “There is no margin for loans up to Rs four lakh. The moratorium period is allowed up to the study period plus one year in all cases, and the repayment period (after the moratorium) is available up to 15 years for all loans,” he said.
As per the scheme guidelines, tangible collateral security of suitable value acceptable to the bank can be taken for education loans only if the loan amount is above Rs. 7.50 lakhs and on a case-by-case basis, the MoS said. He further said, “PSBs have further informed us that non-agricultural land is taken as collateral for the loans, as agriculture land is not compliant with the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002.” Also, the Union Budget 2024–25 has, inter alia, provided for financial support in the form of an annual interest subvention of three per cent of the loan amount for loans up to Rs 10 lakh for higher education in domestic institutions for one lakh youth who have not been eligible for any benefit under government schemes and policies, MoS Chaudhary added.