Tamil Nadu   

Loans to poor students under consideration

Photo: E. Lakshmi Narayanan

On banking: Union Minister of State for Law K. Venkatapathy addressing students at the Muthayammal College of Arts and Science in Rasipuram on Wednesday. –

RASIPURAM: The Union Government is considering a proposal to provide education loans to students belonging to poorer sections at a subsidised interest rate of 4 per cent, Union Minister of State for Law K. Venkatapathy has said.

Disclosing this at the inauguration of State-level seminar on ‘Recent trends in banking’ organised by the Muthayammal College of Arts and Science, Rasipuram, on Wednesday, he has said that currently the education loans carry an interest rate of around 11 per cent.

The proposal, mooted by the Ministry of Human Resource Development, aims to provide loans to students belonging to families having annual income below Rs. 2.5 lakh.

There will be no caste considerations.

Loans will be made available to all needy students. If implemented, the new loan scheme is expected to cost the exchequer a sum of Rs. 3,250 crore over the 11th five-year plan, Mr. Venkatapathy said.

The scheme will be offered for pursuing professional courses in both Government and Government-recognised private institutions.

The Government will act as the guarantor for the loan so that there will be no need for any collateral security or co-applicant, the Minister said.

Stating that incidents of bankers refusing to provide education loans to deserving students were reported across the country, the Minister said that students could report such incidents to the elected representatives and higher authorities. Action would be initiated against the bank officials, if they refused to provide loans to deserving students, he asserted.

Mr. Venkatapathy said that a few Indian public sector banks had identified small banks in the United States for acquisition.

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