COIMBATORE: Worried over increasing default in repayment of educational loans, several nationalised banks have made it mandatory for applicants — both students and parents — to possess a PAN card from the academic year 2012-13.
However, the move has sparked concerns over the likelihood of applicants, particularly those from rural areas, being deprived of educational loans as awareness about the Permanent Account Number (PAN) Card issued by the Income Tax department is still poor.
“Many nationalised banks including the SBI have decided to insist on PAN to check default of educational loans. With the new mandate in place, the details of defaulters can be included in the Credit Information Bureau India Limited (CIBIL) records, which is accessible by banks across the country. Including the PAN in the CIBIL record will help banks identify perennial defaulters as a person cannot have more than one PAN,”
J Vanangamudi, a bank manager in Coimbatore told Express on Wednesday.
The PAN will help banks identify genuine students who are eligible for interest subsidy during the moratorium period (course duration plus one year or six months after getting job) of educational loans. Applicants whose parental annual income is below `4.5 lakh are eligible for the subsidy.