Money & Banking

No loans for students under management quota: FinMin

A. M. Jigeesh New Delhi | Updated on July 18, 2012 Published on July 18, 2012

The Finance Ministry has clarified that students enrolled under management quota will not be eligible for bank loans.

Backing an earlier decision by the Indian Banks’ Association (IBA), the Minister of State for Finance, Mr Namo Narain Meena, has said that the “Model Educational Loan Scheme” is only for meritorious students.

The IBA had decided to allow loans only to “meritorious” students. The move had created a controversy as the matter was raised in Parliament. Some MPs had written to the then Finance Minister, Mr Pranab Mukherjee, to reconsider the decision.

Mr Meena, in reply to a letter from Rajya Sabha MP, Mr K. N. Balagopal, said that the Government was looking into the matter. He said IBA’s model educational loan scheme aimed at providing financial support to students who have taken admission to an eligible course through merit-based selection process.

“As per the scheme, the assessment of the educational loan is based on the employability and earning potential of the student upon completion of the course,” Mr Meena said.

Last year, the IBA issued a circular to all the member-banks a circular modifying the guidelines for disbursing educational loans. It had stated that students getting admission under the management quota were not eligible for loans.

“This is a grave injustice to students. The Government, which promotes self-financing education, is now treating their students as second-class citizens,” Mr Balagopal said.

The move is likely to impact 15 per cent admissions in professional educational institutions. It’s also being pointed out that students in minority-run institutions may be denied loans based on this circular.

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Published on July 18, 2012
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