Punj Lloyd wins Rs1,195 crore order from Haldia Refinery

The Haldia Refinery project of Punj Lloyd will boost the power supply in Kolkata and its suburbs

Punj Lloyd Group said that it has bagged the Rs1,195 crore worth contract from Haldia Energy, a wholly-owned subsidiary of Calcutta Electric Supply Company (CESC), for its 600-MW thermal power project.

The project will boost the power supply in Kolkata and its suburbs, and is scheduled to be commissioned by 2014. Based in Haldia, the scope of work for the 2 x 300-mw plant entails balance of plant (BoP) supply and services and BTG erection. It includes detailed engineering of BoP, mechanical, electrical and instrumentation packages.

With this contract, the order backlog for the group on a consolidated basis has gone up to Rs25,133 crore. This reflects the total value of unexecuted orders as on June 30 plus the new orders received subsequently.

In the late afternoon, Punj Lloyd was trading at around Rs55.50 per share on the Bombay Stock Exchange, 1.28% up from the previous close.


Education loan comes with an extended repayment period for students

According to the revised model for education loan, the repayment period is now extended up to 15 years depending on the loan amount

Indian Banks' Association (IBA) in its revised circular for education loan has recommended extension for the repayment period depending on the loan amount as well as asked banks to clear a loan application file within a month.

Prabhuta Vyas, senior vice-president, social banking, IBA told Moneylife, "The circular for the revised model on education loan was sent to member banks on 30th August with immediate effect.

Earlier, students had to start repaying one year after completing the course or six months after getting a job, whichever was earlier. The loan repayment tenure was between five to seven years. This has been extended to 10 years for loans up to Rs7.5 lakh and 15 years for loans above Rs7.5 lakh.

IBA had also recommended of creating a credit guarantee fund to tackle the problem of rising defaults in the loan category up to Rs4 lakh. "The recommendation (credit guarantee fund) is still pending with the government."

Prashant Bhonsle, country head of Credila Financial Services, which specialises in education loan says, "From the point of students and parents, the extended repayment is good news. As the EMIs amount decreases, the default risk also gets lower. This would also help to mitigate risk to a certain extend. However, this would be challenging for banks to track student borrowers for 15 years. At Credila, we provided tenure of repayment up to ten years, after understanding the need of the students. We felt that a student should not have any debt obligation during the initial years of his career."

Experts point out that there was no need to extend the repayment period as the student and their parents would have continued to apply for the loan and pay back on time. The higher extension of repayment period may lead to lesser lending by the banks. However, banks have welcomed the revised model of education loan.

An official with leading public sector bank, preferring anonymity, told Moneylife, "Our bank will redraft the scheme according to the revised model and put it before the board for approval. Up to ten years of repayment period is good considering five years of studies and two years of employment. Even housing loan has such repayment period. There is some risk, but the education loan scheme is becoming popular among the students and there is clear demand. Overall this revised model is pretty workable."

B Vara Prasad, general manager (retail, payments and settlements and third party products), Union Bank of India, says, "There is nothing wrong in the revised model. It would put less pressure on the students to repay his loan. We welcome such move."

The revised scheme proposed by IBA has addressed concerns and operational difficulties faced by the lenders. According to the revised model, merit would be the sole criteria to be eligibility for the approval of education loan, admission under management quota would be kept out of the scheme, loan quantum would be justified by the employment benefit and extension of the repayment period to reduce the burden on the beneficiaries.

According the revised model there will be no penalty on prepayment. There would be no processing charges levied on loans sanctioned. If banks charges, processing fee for student going abroad for studies, it would be refunded upon the student taking up the course.

IBA said, "Bank may provide 1% interest concession if interest is services during the study period and subsequent moratorium period prior to commencement of repayment."

It also said that meritorious students from the same family are eligible for the loan. "Existence  of  an  earlier  education  loan  to  the  brother(s)  and or  sister(s) will  not affect  the  eligibility  of  another  meritorious  student  from  the  same  family obtaining education loan as per this scheme from the bank," the IBA said.

According to the current guidelines, banks lend up to Rs4 lakh without any security. But for loans between Rs4 lakh and Rs7.5 lakh, they can ask for personal guarantees, and for a loan above Rs7.5 lakh collateral is required.



Nagesh Kini FCA

5 years ago

Despite our Fundamental Right to Education, it is still an expensive proposition as far as quality education is concerned.
The quality and conditions in civic and state run schools is appalling. Even low income group parents don't mind forgoing a square meal to pay fees to a reasonably well run school.
The RBI ought to consider lowering the rate of interest on all educational loans. When it can reduce the interest rates for corporates as well as housing and personal loans there is no valid reason why poor students' parents have to shell out more.
I can say this on authority as a Trustee of an 100 year old charitable Trust extending financial assistance of over Rs.25 lakhs per annum to nearly 3,700 boys and girls in the villages of coastal Western India.

Exporters to get Diwali gift; interest subsidy on the cards

The finance ministry has agreed for an interest subvention for the export credit and the Reserve Bank of India (RBI) has been asked to notify it soon. An announcement to this effect could be expected by the end of October early November, commerce and industry minister Anand Sharma said

New Delhi: The government is working to announce a Diwali gift for exporters in the form of sops, including interest subsidy, to cushion them from slowdown in the western markets, reports PTI.

"After sectoral reviews, we will be announcing the incentives...you can expect definitely by the end of October or first week of November," commerce and industry minister Anand Sharma said after presiding over a meeting of an industry-government task force on ways to revive the business confidence.

He said the finance ministry has agreed for an interest subvention for the export credit and the Reserve Bank of India (RBI) has been asked to notify it soon. It may be 2%-3%, sources said.

Concerned over slowdown, lack of investment and rising cost of credit, Mr Sharma agreed with the industry leaders that there should be a roll-back of the interest rates.

The RBI has been tightening the monetary policy to fight inflation and has increased the benchmark short-term interest rates by over 3.50 percentage points since March 2010.

"In my view, there has to be a rollback when it comes to cost of credit for the manufacturing industry. I have raised the issue with the finance minister. The cost of credit is making Indian manufacturing expensive and globally uncompetitive. It would also affect in the long run our exports. These concerns have been fully registered," he said.

Asked about reforms in the foreign direct investment (FDI) policies, Mr Sharma said overseas investment in education sector is being delinked from real-estate. It will be announced in the new policy circular on Friday.

However, on much-awaited FDI in multi-brand retail, the minister gave no assurance except saying, "we will take the steps which are correct and appropriate".


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