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Banks face problems with education loans in Kerala

THIRUVANANTHAPURAM: Unscrupulous practices by certain education institutions outside the State are posing difficulties for banks in extending education loans to students wanting to go there from Kerala to join the courses.

On the one hand, there is immense social pressure on the banks in Kerala to help the needy students. And on the other, the banks have genuine reasons to fear that certain institutions in the other States, with the help of the agents working for them in Kerala, are cheating the students.

This issue was discussed in detail at a meeting of the State Level Bankers’ Committee (SLBC) held here this week. Bankers told the meeting that they could not check the genuineness of some of the nursing colleges in the light of the findings of the Gurumurthy Commission appointed by the Karnataka government.

The committee had identified some of the nursing colleges as having no infrastructure to conduct the courses, though they had the approval of the Indian Nursing Council (INC).

Bankers feel that there is big racket going on in the State, with the middlemen, who receive hefty commissions from such institutions for canvassing business, misleading the hapless students and their parents about the actual position.

The representative of Syndicate Bank told the SLBC that certain colleges, which had fixed the annual fee for the nursing course at the level of Rs.2 lakh last year, were demanding a fee of Rs.4 lakh from the student this year. The bank felt that this could be because the colleges know that the banks in Kerala were willing to give collateral-free loans of up to Rs.4 lakh to each student.

Federal Bank has come across other malpractices also. Its representative told the SLBC that blank forms in the letterhead of some of the colleges, signed by the principals concerned, were freely available in the market so that the students themselves could fill in the marks and ranks supposedly scored by them in the entrance tests for being submitted to the banks for availing education loans.

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