As per a report the apex body of Banks The Indian Banks Association (IBA) will tighten the screws for Educational Loans. IBA has advised banks not to consider offering educational loans for applicants who gain admission through Management quota. The move from IBA is to help the Non Performing Assets (NPA) come down; Banks term a particular loan as NPA if the borrower’s Interest and/or installment of principal remain overdue for a period of more than 90 days.
According to the new proposal it is possible that students mayn’t get 100% loan to cover the entire tuition fee. The Banks are also advised to study each application on a case to case basis and loans are likely to favor those who have high potential of getting employed post their education. Banks will also assess the expected salary of each student depending on his or her course he is opting to join by securing the education loan.
Though the process is very much similar to the previous assessment model adopted by Banks, with a hint of advice from IBA the Banks may take the issue little more serious. What do you think?
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