Education is big business. Banks know this and now they are
offering student loans. Earlier, educational products were the
domain of public sector banks. But realising the immense business
potential, private banks are eager to jump into the bandwagon.
ICICI Bank and Citibank are strategizing their educational loan
products.
Among public sector banks, State Bank of India (SBI)
is revamping its student loan portfolio to make it more attractive.
It has increased the maximum loan amount to Rs 5 lakh for study
in India and Rs 10 lakhs for overseas education. Interest is
12-14 per cent and the Bank gives students a moratorium of course
period plus six months. The repayment period is 10 years.
Bank of India offers an educational loan scheme which
is similar to SBI's with a repayment period of almost 12 years,
after completion of the course. The interest rate is 12-14 per
cent.
ICICI Bank already has a student banking service called
bank@campus. With its educational loan product, it aims to fulfil
a student's every financial need. According to Mohan Shenoi,
head of retail banking, ICICI Bank, "ICICI plans to launch
education loans early next year and is in the process of shaping
the product."
Initially, ICICI Bank will target only a focussed segment of
students joining select institutions. To start with, it has
tied up with the high-profile Indian School of Business (ISB)
in Hyderabad. For students of ISB, the Bank plans to offer loans
ranging from Rs 1 lakh to Rs 8 lakh at an interest rate of 15
per cent. The moratorium is 15 months.
Citibank has recently developed a Rs 400 crore student
loan programme jointly with NIIT and the International Finance
Corporation. The Bank plans to extend the loan offer to other
students soon. The loan amount to be granted uses the consumer
lending standards of Citibank, which are based on the future
earning capacity of the student.
HDFC offers loans to students joining any of the 20 odd
institutes across the country that it has tie-ups with. The
Bank's Personal Loan product can be used by customers to borrow
funds for their children's education. Customers can take loans
against their property for the same purpose.
| Source: Economic Times |
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4:08:01 PM 
