Chakrabarty chides 'elite' private banks on low educational loans base
Mumbai: Reserve Bank Deputy Governor K C Chakrabarty Tuesday chided private sector lenders for their indifferent approach to education loans, stating there was a need for attitudinal change at board level to do social good.
Coming down heavily on the "elite" private sector banks, Chakrabarty pointed out to data on educational loans as per which state-run lenders account for as much as 96 percent of the outstanding education loans in the country.
"The problem is not that of technique or skill, it is a problem of attitude ... It is a problem of the corporate philosophy which needs to be changed and this has to be addressed at the Board level, at the enterprise level," he said, speaking at a seminar on sustainability here.
Known for his candidness, Chakrabarty did not spare the event organiser, Yes Bank, either.
"Banks have done tremendous job in this area but if we see across the banks, those that are considered high profile banks, including Yes Bank, they are all 'no' to education loans," he said.
"A society where the banks cannot finance deserving students, what type of social and environmental sustainability they can talk about," he asked.
Stating that Reserve Bank is serious about social and environmental sustainability, he pointed to the RBI guidelines like those on priority sector lending and despised the performance of the "elite" banks in this regard.
"Even where we have given directions, the performance is abysmal, especially by the elite banks," he said.
Chakrabarty also suggested ways of making banking more sustainable and wondered if lenders look for inclusion of sustainable solutions like rain water harvesting in a building while approving housing loans.
"These are the things which need to be built up in our appraisal process," he said.