PSU banks tune in to FM channel

Sangita Mehta, TNN

MUMBAI: Banks will soon hold loan melas in educational institutions. The government has asked public sector banks to reach out to students through special drives in academic campuses. Senior bank officials said the government’s directions come at a time when most students line up for loans at the beginning of the new academic year in July.

“The finance minister feels very strongly about loans for education. The FM has often told bankers that no student should be denied education for want of financial resources,” said a senior banker, adding that he was not surprised with such directions from the government. “Although banks do not have to meet any targets for education loans, it is being reviewed by the FM at every quarterly meeting with bank chiefs,” said a banker.

Banks are not new to the mela themes. Until recently, before the northward movement in interest rates, banks used to conduct special drives at property exhibitions to extend home loans. But these were on their own after they discovered that home loans had huge commercial potential and were not just social obligations.

The PSU banks have been leading in giving education loans unlike private and foreign banks. Education loans granted by private banks come under the personal loan category where interest rates are higher. Banks have disbursed education loans of about Rs 13,399 crore as on December 2006, according to an RBI data.

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