The Hindu : Andhra Pradesh / Hyderabad News : Chief Minister asks banks to step up educational loans

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Thursday, May 08, 2008
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Andhra Pradesh

Andhra Pradesh - Hyderabad

Chief Minister asks banks to step up educational loans

— Photo : Satish H.

Setting an agenda: Chief Minister Y.S. Rajasekhara Reddy releasing the State credit plan in Hyderabad on Wednesday. He is flanked by Andhra Bank CMD K. Ramakrishnan (left) and Finance Minister K. Rosaiah.

HYDERABAD: Chief Minister Y. S. Rajasekhara Reddy asked banks to provide loans to every student of professional college who wanted it and assured that the Government was ready for any initiative in this regard.

Stating that educational loans was one area where banks had not done well, he said though this was better than in other States, the saturation point was not reached in State.

Launching the State Credit Plan for 2008-09 at the State-Level Bankers’ Committee (SLBC) meeting here on Wednesday, he said “unless we take this on a priority I am worried about the future of students”. He advised banks to open temporary branches in professional colleges during admissions.

Responding to the Chief Minister’s suggestion, K. Ramakrishnan, CMD of Andhra Bank and president SLBC assured that he would come out with a “special package” shortly for providing loans to entrepreneurs belonging to SC, ST and other weaker sections.

Dr. Reddy said banks were insisting on a collateral security if the loan amount exceeded certain ceiling. Declaring the Government’s willingness to stand guarantee in such cases, he wondered why banks should object.

When Dr. Reddy enquired with officials, Principal Secretary (Tribal Welfare) V. Nagi Reddy said instead of providing government guarantee, a credit insurance guarantee scheme was being taken up.

The credit would be provided risk cover and the government would pay the premium.

On extending loans to farmers, the Chief Minister said the government had earmarked Rs.300 crore to provide four per cent subsidy over and above the seven per cent given by banks.

However, it would be linked to prompt repayment. He urged the Agriculture department to sensitise farmers to pay dues properly.

An amount of Rs.47,000 crore was projected under the annual credit plan for 2008-09.

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Andhra Pradesh