Indian Overseas Bank, a public sector lender, is in talks with National Skill Development Corporation (NSDC) for funding the latter's skill development initiatives.
“We are in talks with organisations like NSDC. The talks are still preliminary and we are yet to reach to a level of any MOU,” Mr M. Narendra, Chairman and Managing Director of IOB, told Business Line .
He also said that IOB is keen to support skill development initiatives in the country. NSDC has a mandate to skill 15 crore people in 21 focus sectors by 2022.
“The Government has set up NSDC in collaboration with industry to catalyse the private sector to increase its involvement in the task of skilling the nation. The NSDC's mandate is to train 150 million of the 500 million target set by the Government.
The existing Government schemes are expected to create the balance 350 million employable youth by 2022,” said Mr Dilip Chenoy, Managing Director and Chief Executive Officer, NSDC.
NSDC is also in talks with Axis Bank to fund its trainees, added Mr Chenoy.
NSDC already has a tie up with Central Bank of India which provides loans to persons enrolling for skill development and vocational training with Partner Training Institutes of the NSDC.
The PTIs provide partial support.
TalentSprint, Hyderabad, involved in professional skill development in IT and BFSI sector, was one the first recipients of finance under this programme.
Under the arrangement, banks lend up to 90 per cent of the fee charged by the training institutions without any collateral.
The loan is based on the future earning potential of the candidates and not on their present financial condition.
NSDC indemnifies some of the loans given by the banks to the candidates.
There is a moratorium of three months and repayment starts six months after the training.