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Kerala government today said it would bear the interest of educational loans availed by Below Poverty Line category students during the period of their study from 2004-2009.
Addressing a press meet after a cabinet meeting, Chief Minister Oomen Chandy said the Centre was now providing the interest portion to students who have taken loans after 2009.
“Government has asked lead banks not to levy penal interest and will pay them simple interest and base interest of loans during the period of study of the students,” he said.
Chandy said a committee comprising representatives of lead banks and Secretaries of higher Education, Finance, LSG, and Cooperation would be formed to expedite the process.
No recovery proceedings or any such processes should be initiated by banks against students who had taken loans till a consensus has been reached, he said.
He said government, instead of paying the amount directly to the beneficiaries, would remit the required amount in banks as and when final shape was given to the whole process.
Chandy said the attitude of banks in not providing loans for students who opt to go out of the state for studies was not acceptable.
“Government’s clear stand is that loans should be provided, irrespective of the place opted for pursuing studies’, he said.
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