Disbursement of educational loans soars 77 per cent

But that is not the case. The 27 PSBs have, in fact, notched up an average 77 per cent growth in disbursals in 2002-03.

With fees for various professional courses shooting through the roof (and parents certainly not having the wherewithal to pay for it), education loans from banks are proving to be a good option.

In 2002-03, disbursals of educational loans increased by Rs 1,283 crore to Rs 2,941 crore (Rs 1,658 crore in FY 2001-02). In 2000-01, when the comprehensive educational loan scheme was launched, PSBs collectively disbursed Rs 799 crore.

The State Bank of India has come out tops on the education loans front, with its portfolio growing by Rs 267.04 crore to Rs 654.71 crore in 2002-03.

Canara Bank's portfolio increased by Rs 142 crore to Rs 401 crore, while Andhra Bank's rose by Rs 134.45 crore to Rs 285.65 crore.

The comprehensive educational loan scheme has been framed to ensure that no deserving student is deprived of higher education for want of finances.

The scheme covers all types of courses in schools and colleges in India and abroad. The scheme envisages loans up to Rs 7.5 lakh for studies in India and up to Rs 15 lakh for studies abroad.

For loans up to Rs 4 lakh, no collateral or margin is required and the interest rate is not more than the prime lending rate (PLR). For loans above Rs 4 lakh, the interest rate will not exceed PLR plus 1 per cent.

The loans are to be repaid over a period of 5 to 7 years with the provision of a grace period of one year.