‘Banking to play major role in education sector’

Banks, both public sector a private are faced with a growing problem — increase in repayments on education loans. This is making them wary of lending new education loans without collateral surety.

Making this point, J. Sitapathi Sarma, General Manager, State Bank of Hyderabad said in the past banks were liberal giving up to Rs 4 lakh non-collateral loans. But when people began making wrong use of the facility and did not repay properly, banks now think twice before lending in that segment.

He was delivering BL Club lecture series, sponsored by the SBH at the K.L. University campus recently. Sarma said that the banking sector will play a major role in the next five years and students from MBA, B.Com and Chartered Accountancy will have a good opportunity in terms of getting employment or starting their own entrepreneurial venture.

SBH has many schemes to lend to new entrepreneur with the promoter investing one-third and bank lending two-thirds, he said while speaking on ‘Overview of Bank Balance Sheets’.

Sarma said the profitability of the banks depends on lower non-performing assets, quantum of large-value funding, cost of fund borrowed from the market for lending and availability of total lendable funds.

SBH had been earning profits year after year from its inception, when the Hyderabad Nawab launched it and made it the controlling agency for minting coins too, he said.

The K.L. University MBA Department Director M. Bhaskar Rao in his address said that students got an idea about bank operations through the insights provided by the General Manager. SBH KL University branch manager Durga Prasad was also present.

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