“Banks have reported certain cases where the employment potential would not justify the fee structure for management seats from the point of repayment of the loan being sought,” IBA said
Worried over a rise in default on repayment of education loans, the Indian Banks' Association (IBA) asked lenders to impose stricter terms on loans given to students getting admission under the management quota.
"Any loan considered by banks for students getting admission under the management quota would be outside the model scheme. Banks may fix appropriate terms and conditions for such loans," IBA said in guidance note.
IBA expressed concerns that loans given to such students under the model education loan scheme could turn bad as their employment potential is relatively less.
"Banks have reported certain cases where the employment potential would not justify the fee structure for management seats from the point of repayment of the loan being sought," it said.
Non-performing assets in education loans are as high as 6%. To bring down NPA in education loan, the government is also considering the option of setting up a credit guarantee trust.
As per the model scheme, the banks are not allowed to look at the financial position of parents while evaluating loan to a meritorious student.
It is aimed at meeting all genuine study expenses of a student required to complete the study undertaken. The fee structure varies with type of college or institution within the same state for a given course.
Under management seats, the only requirement is passing the qualifying examination with certain minimum stipulated marks, it said, adding, it is logical to interpret that these seats do not qualify for being called meritorious.
Management seats or management quota refers to the seats in private education institutions for which the management has the discretion to give admission on factors other than merit.
High inflation and the ensuing jacking-up of interest rates by the RBI, coupled with the uncertainties on the economic growth, are believed to have dampened the home loan market
In order to prop up the sagging home loan market, state-run lenders Central Bank of India and Bank of Maharashtra (BoM) have announced slashing of interest rates by up to 0.25%, and also decided to waive the processing fees.
Pune-headquartered BoM has decided to give housing loans under Rs25 lakh for a five-year tenor at the reduced base rate (below which it cannot lend) of 10.60%, it said.
Similarly, the city-headquartered Central Bank of India has cut home loan rates by up to 0.25%, it said. A home loan of up to 25 years and under Rs30 lakh will be available at 10.75%
Both the lenders have also announced waiver of processing charges. While Central Bank of India is offering a blanket waiver of processing fees for loans across amounts and tenors till 31 March 2012, BoM has waived it only for applications under Rs25 lakh.
BoM charged up to Rs12,500 for such loans in the past. High inflation and the ensuing jacking-up of interest rates by the Reserve Bank of India (RBI), coupled with the uncertainties on the economic growth, are believed to have dampened the home loan market.
According to the RBI's Financial Stability Report released on 12 January 2012, the housing credit growth fell to 2.3% from 10.7% a year ago.
The country's largest lender State Bank of India is also contemplating a cut in interest rates in select home loan categories where demand is slow.
“The customers can shift his or her account to any of the desired branch any number of times, without any change in the account number, with just a change in home branch code,” Indian Bank said in a statement
State-owned Indian Bank has introduced account portability feature which allows its customers to retain the account number even if they change the branch.
The facility would enable the customer to have the freedom of operating his or her account from any of the branches, Indian Bank said in statement.
"The customers can shift his or her account to any of the desired branch any number of times, without any change in the account number, with just a change in home branch code," it said.
"Customers can approach his home branch or the transferee branch with the request letter for transfer of account," it said.
Home branch having the customer's account certifies the 'know your customer' (KYC) documents while transferring the account to another branch, it added.
Indian Bank has got the account portability feature in-built in core banking software, for transfer of the deposit accounts from one branch to another branch, it said.