Govt working on guarantee scheme for educational loans: RBI
Puducherry: In a bid to remove problems faced by students in obtaining education loans, government was working on a scheme under which it would extend guarantee for advances upto Rs 7.5 lakhs, RBI Governor D Subba Rao said Thursday.
"There are grievances of students not getting loans or encountering problems...Understanding that there is a problem, the government is now working on a guarantee scheme," he told students here at an interactive programme organised by RBI.
"It is yet to be launched. Hopefully it would come and resolve some of these issues," he said replying to a question on the woes of students in getting educational loans.
On paper for loans upto Rs 4 lakhs there should be no collateral security or guarantee. "For good students and good institutions it is easier to get loans than for students from not so good or institutions not rated high," he said.
"But our endeavour is irrespective of level of achievements of institutions, they must have access to education loan upto Rs 4 lakhs," he said.
He also said RBI wanted to deepen penetration of banks either through bank branches or business Correspondents since more than 50 percent of the households in the country did not have bank accounts.
Noting that RBI and the Government had initiated several steps towards financial inclusion with a view to ensuring that every household had bank accounts, he said it would become successful only when banks see it as a business opportunity.
On security and safety of electronic transactions, he said, "Securing security is shared responsibility. It is not the exclusive concern of RBI alone. It is responsibility of commercial banks and of the customers."
All the three should share the responsibility and work together to ensure that banking transactions especially electronic and mobile transactions were safe, he added.
Replying to a question, Subbarao said there was a plan to introduce polymer notes on a pilot basis in a small way.
"If the experiment succeeds we will mainstream it across the country. There was some initiative in this regard 10 years ago when it was tried and did not succeed."
He said several things have changed, including people's attitude towards polymer notes and better technology and lower cost of printing polymer notes. "We will do it on pilot basis soon."
On the meeting of Board of Governors of the RBI held Thursday, he said it discussed concerns of students with regard to educational loans.
RBI would soon prepare a position paper and based on it, a study would be conducted in some select states in the country on the various aspects of the scheme.
He said the meeting also discussed priority sector lending and implementation of the Nair Committee recommendations on the subject.
"We discussed the vision document for payment and settlement systems and we discussed the draft report on trends and progress in banking. That report would be released sometime later this month." he said.