Central government informed students who have borrowed education from the government banks can submit requests for interest subsidy. Canara bank has taken the responsibility of accepting the request and pay the interest claimed on loan.
Srinivasan, convenor of Education Loan Task Force (ELFT) and a former banker informed: “The Ministry of Human Resource Development has recently advised Canara Bank to open the web portal for banks to submit their claims for interest subsidy on education loans from August 23 to November 23.” All the requests will be submitted to Canara bank and processing will take place from there itself.
He claimed that many of the banks didn’t present the report of students applied for an educational loan so they could not help them in case of interest payment. To such negligence, they have asked the students to submit the details and apply for the subsidy for interest.
Giving more information about the details that need Srinivasan said: “On their part, the borrowers can also send a letter to the bank branches where they have taken the loan with necessary details to claim the interest subsidy along with a copy marked to the bank’s Zonal Manager.”
Education loan borrowers are charged some amount of interest every year. For the students who have commandeered the educational loan from government recognized banks can apply for the interest subsidy. For the students who submitted the request with all the required details and proofs, Government will pay the interest until the end of one year from the date of completion of course.
He added that “It is enough if the parents submit the income certificate signed by the competent authority at the time of availing the loan. As per the central government’s scheme, full interest subsidy to eligible students is provided during the study period plus one year moratorium period.”
He instructed the Indian Banks’ Association (IBA) to train the employees particularly to handle the Educational loans and its subsidy process. He discussed about the consequences faced by the bank officials if they don’t follow the procedure. “If any bank fails to submit the claims on time for eligible student borrowers, the students can seek legal remedy through District Consumer Disputes Redressal Forum for deficiency of service claiming damages and compensation. Students can even approach the Banking Ombudsman for redressal of grievances,” Official warned.
He asked the banks to make sure the submission of requests on time. He assured that “The Centre would reimburse the interest to those students whose parental income is less than Rs.4,50,000 per annum, and on loans which are available only for professional and technical courses and not for arts or science and students of diploma courses.”