Student aid authority will rein in rogue banks

Chennai, March 1 (IANS) With almost all nationalised banks not following the education loan norms, the proposal to set up an information technology (IT) -based monitoring mechanism is a welcome measure, said the convenor of the Education Loan Task Force (ELTF).

"If such a monitoring mechanism is set up it will be good as nationalised banks are not sticking to the education loan lending norms. They also resort to naming and shaming of young students," K. Srinivasan, convenor of ELTF and a former banker, told IANS.

The ELTF guides students on rules and regulations governing education loans offered by nationalised banks free of cost.

Union Finance Minister Arun Jaitley in his budget speech on Saturday outlined the government's proposal to set up a fully IT-based student financial aid authority to administer and monitor scholarship as well as education loan schemes.

He said it would be conducted through the Pradhan Mantri Vidya Lakshmi Karyakram.

"We will ensure that no student misses out on higher education for lack of funds," Jaitley said.

According to Srinivasan, nationalised bank do not submit proper returns to claim interest subsidy on behalf of the poor students.

The banks also threaten the students of naming and shaming them if they fail on loan commitments, he said.

"The scheme offers long-term repayment mode which the banks do not extend to the students," Srinivasan said.

"Unless the prime minister's office is involved in monitoring the scheme, bankers will play with the lives of students," he added.