Lok Sabha Question No. 353 (STARRED), answered on 2016-12-09
Subject: Educational Loans
Ministry: FINANCE
Asked by: GOKARAJU GANGA RAJU, RAVINDRA KUMAR PANDEY

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES LOK SABHA

## TO BE ANSWERED ON THE 9th

## STARRED QUESTION NO\_ *353 DECEMBER, 2016, AGRAHAYANA 18, 1938 (SAKA) EDUCATIONAL LOANS

## *353. DR. GOKARAJU GANGA RAJU AND SHRI RAVINDRA KUMAR PANDEY:

Will the Minister of Finance be pleased to state:

- a whether the Government proposes to review the educational loan guidelines and interest rates particularly for higher education and if so, the details thereof;
- b) whether instances of harassment of students by the loan recovery agents engaged by the publiclprivate sector banks have come to the notice of the Government;
- C) if sO, the details thereof along with the cases filed against such bankslindividuals during the last three years and the current year, State-wise;
- whether the GovernmentIRBI has issued any guidelines in this regard and if so, the d) details thereof; and
- the other corrective steps taken/being taken by the GovernmentIRBI to protect the interests of the students and for effective compliance of these guidelines?

## ANSWER (FINANCE MINISTER) (SHRI ARUN JAITLEY)

- (a) to (e): A Statement is laid on the Table of the House.

Statement referred to in reply to parts (a) to (e) of Lok Sabha Starred Question No; `353 for answer on 9th DECEMBER, 2016 tabled by DR: GOKARAJU GANGA RAJU AND SHRI RAVINDRA KUMAR PANDEY regarding 'EDUCATIONAL LOANS'

Model Educational Loan Scheme prepared by the Indian Banks' Association (IBA) in the yeac 2001 was circulated to banks for implementation b the Reseed Bankh India 2001\_ Based on the suggestions from  stakeholders and needs of the students, 2015.

RBI has deregulated the interest rates on loans and advances including that 01 educational loans and the interest rates are now determined by the banks with the appoval of their Board of Directors subject to the regulatory guidelines on interest rate issued by RBI from time to time.

RBI has issued guidelines which permit banks to engage recovery agents for of all loans: Sale of loans to Asset Reconstruction Companies (ARCs) is in line guidelines and is a of the strategy of banks to reduce Non-Performing Assets that blocked funds recycled and more and more fresh loans can be given to (NPAs) so and needy  students to help them pursue their career Banking the aspiring India, receive complaints on various banking related issues: Ombudsmen situated across CompGasnte including any regarding harassment of borrowers by the loanirecovebuageras engaged by"the banks, are resolved as per the provisions of the Banking Ombudsman Scheme. part get goals.

Government of India provides full interest subsidy on education loans disbursed after April; 2009, during the period of moratorium , for the students belonging td on or sections Whose parental income from all sources does not exceed economically weaker Further;, Government of India has launched a Credit Guarantee Rs 4.50 lakh per annum: Rs 7.50 Lakh: The fund provides Fund Scheme for Education Loans (CGFEL) for loan upto guarantee to the extent of 75% of the defaulted amount 1st

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