The banks in the State have disbursed education loans to the tune of ₹1,047.33 crore across 68,405 accounts under the priority sector in the financial year 2021-22, which is below the target fixed for the year.
According to data from State Level Bankers’ Committee - Tamil Nadu (SLBC), the target fixed as per the annual credit plan was ₹1,666 crore across 2,17,511 accounts for education loan under the priority sector category for 2021-22.
Banks have to set aside a specific portion of their lending to sectors deemed important by the Reserve Bank of India, under 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 top market for education loan and accounts for one-third of the total disbursement in India.
According to SLBC, as per information received from its member-banks, overall, education loans to the tune of ₹2,288.80 crore were disbursed during financial year 2021-22, out of which ₹861.89 crore were granted to girl students. The fresh loan sanctions were to the tune of ₹1,321.37 crore during the year.
Under the priority sector education loan category, non-performing assets declined to ₹3,920.34 crore as of March 2022 from ₹4,040.60 crore as of December 2021. Outstanding education loans have declined nearly 5% to ₹13,221 crore as of March 2022 from ₹13,880.35 crore as of December 2021, according to the data.
As per the Model Education Loan Scheme formulated by Indian Banks’`Association, Collateral-free loans of up to ₹7.5 lakh are offered under the Credit Guarantee Fund Scheme for Education Loans. A one-year moratorium for repayment after completion of studies in all cases, and a moratorium taking into account spells of unemployment/under-employment, for two or three times during the life cycle of the loan, are also available.
For students belonging to economically weaker sections, an interest subsidy scheme for education loans is in place. Under the scheme, full interest subsidy is available during the period of moratorium on education loans of up to ₹7.50 lakh, disbursed on or after April 1, 2009.
At a recent meeting of SLBC, it was emphasised that lending under education loans needs substantial improvement.
