• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

G. Naga Sridhar

Hyderabad, Aug 20 Banks are now trying to push their educational loan products with insurance cover to make them more attractive for the customers and safer for themselves.

“The insurance add-on to the educational loans is becoming increasingly popular with the customers ,” Mr A.L. Nageshwar Rao, General Manager, Andhra Bank, told Business Line.

“As educational loans have a long re-payment schedule often stretching up to nine years, the liability insurance shields the risk. In the event of any tragedy (death or incapacity), the loan repayment will be taken care of by the insurer,” he explained.

“A majority of our educational loans now carry insurance,” he added. Andhra Bank’s educational loan portfolio had grown by 34.7 per cent to Rs 953 crore in the first quarter of the current fiscal compared to Rs 707 crore in the same period last year. The bank has a tie-up with Life Insurance Corporation for the purpose.

Though dependent on the loan amount and repayment schedule, the average premium amount works out to a little over Rs 1,000 per lakh per annum.

The increasing popularity of insurance in educational loans is also the case with the other banks as well. “Given the present-day risks, parents naturally prefer insurance in educational loans. The reason is that the premium amount is negligible. Further, it adds sheer value to the product,” Mr Sridhar, Assistant General Manager (Development and Rural Banking), State Bank of Hyderabad, said.

While insurance is still an option for the customers in PSU Banks, many private banks are ‘literally forcing’ the insurance on the customers, according to an official of a private bank. “There is a move to make the banks bear the insurance premium amount in educational loans in the public sector. However, in private sector banks, this cannot happen and parents will have to foot the insurance costs as well,” Mr Anjaneyulu, CEO (AP), ING Vysya Bank, said.

More Stories on : Credit Market | Education | Insurance

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
IIBF opens course to all graduates

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line