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    In an effort to gain support from young voters, the Indian Finance Minister proposed a Rs 2,600-crore interest subsidy for over 9 lakh students who took out educational loans before 2009. The subsidy provides relief on interest payments until December 2013. Students who took loans after 2009 were already offered similar benefits under a central subsidy scheme. The moratorium is aimed at students from families earning less than Rs 4.5 lakh annually who struggled to find jobs after graduation during the economic slowdown, making it difficult for them to repay loans. Bankers believe the move will benefit lenders by reducing non-performing assets as more loans will become standard with the interest relief.

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    In an effort to gain support from young voters, the Indian Finance Minister proposed a Rs 2,600-crore interest subsidy for over 9 lakh students who took out educational loans before 2009. The subsidy provides relief on interest payments until December 2013. Students who took loans after 2009 were already offered similar benefits under a central subsidy scheme. The moratorium is aimed at students from families earning less than Rs 4.5 lakh annually who struggled to find jobs after graduation during the economic slowdown, making it difficult for them to repay loans. Bankers believe the move will benefit lenders by reducing non-performing assets as more loans will become standard with the interest relief.

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    14 views1 page

    FM Offers Youth An Eduvantage

    Uploaded by

    Ashish Kumar
    In an effort to gain support from young voters, the Indian Finance Minister proposed a Rs 2,600-crore interest subsidy for over 9 lakh students who took out educational loans before 2009. The subsidy provides relief on interest payments until December 2013. Students who took loans after 2009 were already offered similar benefits under a central subsidy scheme. The moratorium is aimed at students from families earning less than Rs 4.5 lakh annually who struggled to find jobs after graduation during the economic slowdown, making it difficult for them to repay loans. Bankers believe the move will benefit lenders by reducing non-performing assets as more loans will become standard with the interest relief.

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    2/19/2014

    FM offers youth an eduvantage

    Publication: The Times Of India Bangalore;Date: Feb 18, 2014;Section: Interim Budget;Page: 10

    BANKING ON YOUNG MINDS


    FM offers youth an eduvantage
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    In an election-year sop targeted at the youth, over 9 lakh students who took education loans before March 2009 will benefit from a Rs 2,600-crore interest rate subsidy proposed by P Chidambaram. The subsidy provided in the form of an interest moratorium is applicable up to December 2013, which means borrowers must resume interest payments from 2014. Students who took loans after 2009 were provided similar benefits under a central subsidy scheme for education loans announced that year. Like the 2009 scheme, the moratorium proposed in the interim budget will apply to students with annual family income from all sources below Rs 4.5 lakh. Most students who took loans before 2009 came into the job market when the economy was in a slowdown and couldnt get jobs immediately which reduced their ability to repay. The moratorium has been announced because students who took loans before 2009 couldnt get advantage of the subvention scheme, said MV Tanksale, MD & CEO Indian Banks Association. Tanksale said there was no scope of misuse as the benefits were for a clearly-defined scheme. Bankers said the move would benefit lenders. If theres any overdue in interest payments in any loan itd be classified as NPA. Now, all loans will become standard assets as long as they meet interest obligations after January, a banker said. At the end of December 2013, PSU banks had 25,70,254 student loan accounts and the outstanding was Rs 57,700 crore. Chidambaram said under the Central Scheme for Interest Subsidy (CSIS) on education loans disbursed after April 1 2009, the government took over the interest burden for the period of study and a little beyond. Ive noticed a sense of discrimination among students who borrowed before March 31, 2009, struggled to pay interest during the period of study, and continued to service the loans afterwards. I think they deserve some relief, he said.

    http://epaper.timesofindia.com/Repository/getFiles.asp?Style=OliveXLib:LowLevelEntityToPrint_TOINEW&Type=text/html&Locale=english-skin-custom&Path=T

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