Kerala’s bad loans in the education sector shoot up

Kerala launched a Rs 900-crore ELRS scheme to help students from families with annual income below Rs 6 lakh repay their education loans.

Published: 04th August 2018 03:37 AM  |   Last Updated: 04th August 2018 06:27 AM   |  A+A-

bad loan

Representational image. | Express

Express News Service

KOCHI: People misusing the government’s education loan repayment support scheme by deliberately defaulting? The State Level Bankers’ Committee (SLBC), Kerala, seems to think so.When the Education Loan Repayment Support (ELRS) scheme was announced in April 2017, the non-performing assets (NPA) under the education loan in the state was 10 per cent.

More than a year later, it has shot up to 17 per cent.

What is worse for the banking sector, there is a 35 per cent growth in education NPA in the current financial year itself.

Kerala launched a Rs 900-crore ELRS scheme to help students from families with annual income below Rs 6 lakh repay their education loans.The SLBC meeting minutes, a copy of which is with Express, said the “forum raised concern on the sharp rise in NPAs in education loans after the ELRS scheme was notified in the state”.

The state’s education loan, which stood at Rs 9,821 crore in December 2015, rose to Rs 10,220 crore in December 2016 and touched Rs 10,179 crore in December 2017. The NPAs in the education loan segment rose from Rs 1,021 crore in December 2015 to Rs 1,315 in December 2016 and further to Rs 1,777 crore in December 2017, which is 17 per cent of the total loan amount.

Message loud and clear: Bankers’ committee

“The message is loud and clear,” the SLBC minutes said, suggesting that students may be deliberately defaulting to take advantage of the government’s loan waiver scheme.SLBC Kerala convenor G K Maya, who is also the general manager of Canara Bank, said Rs 33.48 crore of claims have been forwarded by the nodal officer pertaining to all the banks, of which Rs 24.09 crore have been forwarded by the SLBC.

“The Finance Department, after scrutinising the claim application on a test basis, has approved Rs 31 lakh and it’s expected to be passed on to SLBC/banks,” she said.A Federal Bank officer attributed the rise in NPAs to the misconception among the public that the government or banks will come with one scheme or the other in the future to write off their loans. “Though the Kerala government introduced the scheme with good intentions, the public has not taken it in the right way. This has put bankers under pressure and we will be extra cautious while sanctioning student loans,” he said.


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

  • Hiralal

    When it comes to loot every body is naked in the Hamam. Loan waver schemes are depriving genuine people of its benefits and these are adding to the black money source of others.
    4 years ago reply
flipboard facebook twitter whatsapp