Financial Daily from THE HINDU group of publications
Sunday, Dec 28, 2003
Financial Daily from THE HINDU group of publications Sunday, Dec 28, 2003 |
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Industry & Economy
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Education Money & Banking - Credit Market Plan panel wants educational loans at lower rates G. Srinivasan
New Delhi , Dec. 28 PARADOXICAL though it might sound, the fact remains that while the rates of interest in consumer sectors like housing and car purchase hover around 7 per cent to 8 per cent, educational loans suffer from the high prevailing rates of interest. Stung by this anomaly of a country that boasts of the best human resources, the Planning Commission convened a meeting recently where a representative each from the Ministry of Human Resource Development, the Department of Banking and the Reserve Bank of India and from Punjab National Bank and UCO Bank took part, official sources told Business Line here. The meeting underscored the urgent need for review of the extant rate of interest on educational loans and examining possibilities for reducing it. It was also felt that poor meritorious students admitted to prestigious institutions like the Indian Institute of Management, Indian Institute of Technology and All India Institute of Medical Sciences could be charged a significantly lower rate of interest because recovery of such loans was assured due to much higher chances of placements in jobs of students passing out from these institutions, the sources noted. The meeting also weighed the need for reducing the rate of interest on secured educational loans and making parents eligible for taking educational loans for their wards. Income-tax rebate on the educational loans was also discussed. The sources said that it was agreed that the Planning Commission would advert the matter to the Department of Banking for having the scheme reviewed by the Indian Banking Association. In this review, representatives of Ministry of HRD and Planning Commission could also take part over and above the representatives of educational institutions which are aware of the difficulties being faced by students in the matter of financing their education could also take part in these discussions, it was stated.
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