Four months ago, the Central Government started new online initiative to boost education loans in the country. However, the initiative seems to have failed, as eight banks loaded with forty-seven education loan schemes, have given only three education loans out of more than 500 applications under ‘fast track’ electronic platform, Pradhan Mantri Vidya Lakshmi Karyakram.
Under new initiative, all banks have been brought on one platform with the purpose to make education loan easier and faster. However, department of financial services of Ministry of Finance documents show that as on 12th November 2015, only two banks- Canara and Dena Bank have disbursed three education loans under this initiative. Whereas SBI, IDBI, Bank of India, UBI, Syndicate bank and Indian bank have not approved and disbursed a single education loan.
State bank of India has received 151 applications for education loan through this ambitious fast-track project, but has not approved and disbursed any of them. Banking expert Amarjeet Chopra said, “NPA rate in the education loan has been very high and may be they (Banks) are shedding away from education loan but education loan has to be increased”. A finance ministry source says that banks have more than 30 lakh student loans and around 10% loans are under Non Performing assets (NPA).
Government has constantly been building up pressure on public sector banks to finance education loan for the past 7 years but education loan has dropped more than 50% during the years.A bank official on conditions of anonymity said that private banks should also share education loan as social responsibly. Public banks have more than 90% education loan portfolio and private sector is almost absent.
An official document shows the Vidya Lakshmi Portal has more than one lakh unique visitors and twenty three thousand students have registered so far. At least 24 banks are affiliated with this initiative and 8 banks are ready to receive the application. All the remaining banks (which are yet not integrated with the portal) are requested 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 for 2015-16. Vidya Lakshmi (www.vidyalakshmi.co.in), a single window new initiative of fast track education loan disburses system was launched on the eve of Independence Day in response to replace traditional education loan system with more transparency and fast approval. It is first of its kind portal providing single window for students to access information and make application for educational loans provided by banks as also government scholarships.
The online initiative has been developed and maintained by NSDL e-Governance Infrastructure Limited (NSDL e-Gov) under the guidance of Department of Financial Services, Ministry of Finance, Department of Higher Education, Ministry of Human Resource Development and Indian Banks’ Association (IBA).