The State-Level Bankers Committee meeting held here on Monday demanded that the moratorium on repayment of educational loans should be limited, as these loans are contributing to an increase in non-performing assets of banks.
The demand from the bankers’ committee arose when Finance Minister K M Mani and Rural Development Minister K C Joseph at the meeting expressed strong reservations regarding the strict norms followed by banks in granting educational loans.
The bankers’ meet pointed out the bad debts in Wayanad had risen to the tune 22 per cent of the Rs 420 crore provided as educational loans. The SLBC said that as the moratorium on repayment of educational loans exists, no action can be taken against the defaulters. They demanded that the moratorium on repayment should be strictly limited to educational loans which were given during the period between 2004 to 2009.
The bankers’ committee also put forward the suggestion that the moratorium should be made applicable only in repayment of interest.
The committee recommended that the State Government should take stringent action against those running a campaign that educational loans need not to be paid back.
K M Mani criticised the banks for charging varying interest rates for educational loans instead of following an uniform interest rate. He pointed out that some banks are charging 15 per cent interest which cannot be allowed in any way.
He also said that some banks are not providing educational loans in a time-bound manner.
The Finance Minister said that bank guarantee cannot be asked for the educational loans and loan criteria should be simplified.
Minister K C Joseph, who took part in the meeting, said that in Chief Minister’s mass contact programme it was regarding the educational loans that maximum number of complaints were received.
Till September, the deposits in commercial banks in the state was Rs 2,52,338 crore of which Rs 1,81,166 crore have been disbursed as loans. In the priority sector, a record of Rs 1,01,468 crore has been disbursed.