Two banks disburse loan under the Pradhan Mantri Vidya Lakshmi Karyakram, a central government's online initiative to fast-track such loans
The Pradhan Mantri Vidya Lakshmi Karyakram, an online initiative for fast-tracking educational loans started four months back by the central government, has remained non-starter with only three loans approved under it.
Under the initiative all banks were brought under one platform with the purpose of making education loans easier and faster.
However, department of financial services of the Ministry of Finance documents show that as on November 12, 2015, only two banks -- Canara Bank and Dena Bank – have disbursed three education loans under this initiative. About 500 applications were received under the scheme.
On the other hand, State Bank of India, IDBI Bank, Bank of India, Union Bank of India, Syndicate Bank and Indian Bank have not approved and disbursed a single education loan.
SBI has received 151 applications for education loans through the fast-track project, but has not approved and disbursed any.
Amarjeet Chopra, banking sector expert, said, "Non-performing assets (NPAs) in education loans has been very high, and the bank may be shying away from education loans but they have to be increased."
A finance ministry source said that banks have more than 30 lakh student loans and around 10% loans are NPAs.
Despite the government building pressure on public sector banks to finance education loans, such loans have dropped more than 50% in last seven years. A bank official said on the condition of anonymity that private banks should also share education loans as social responsibility. Public banks have more than 90% education loan portfolio while it is almost negligible for the private banks.
The official document showed the Vidya Lakshmi portal had more than one lakh unique visitors and 23,000 students have registered so far. About 24 banks are affiliated with this initiative and eight banks are ready to receive the application. All the remaining banks (which are yet not integrated with the portal) have been asked to take steps to integrate with the portal.
Finance Minister Arun Jaitley proposed to set up a fully IT-based Student Financial Aid Authority, in the Union Budget 2015-16. Vidya Lakshmi (www.vidyalakshmi.co.in) was launched on eve of Independence Day to replace the traditional education loan system with more transparency and fast approval. It is a single window for students to access information and apply for educational loans provided by banks as also government scholarships.
The initiative has been developed and maintained by NSDL e-Governance Infrastructure Ltd under the guidance of Department of Financial Services, Department of Higher Education, Ministry of Human Resource Development and Indian Banks' Association.
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