Andhra Bank signs MoU with IIIT-H

Andhra Bank has signed a memorandum of understanding (MoU) with the International Institute of Information Technology, Hyderabad, (IIIT-H) to provide educational loans at concessional rates.

Based on the agreement, students of IIIT-H will be able to take loans from Andhra Bank up to an amount of Rs 4 lakh at a floating rate of interest of 9.5 per cent.

The bank will also extend a concession of 0.5 per cent for women students, apart from a concession of 0.5 per cent if the interest is serviced during gestation period. Another 0.5 per cent concession will be given for prompt repayment of loan.

K Ramakrishnan, chairman and managing director of Andhra Bank, said, "The total advances under educational loans by banks in India covers eight lakh students with an outstanding amount of over Rs 10,000 crore at the end of 2005-06. Andhra Bank extended Rs 1,012 crore of aggregate sanctions to 46,919 students with an outstanding amount of Rs 677.43 crore at the end of March 2006. By March 2007, we aim to reach the Rs 1,250-crore figure."

Andhra Bank has similar arrangements with the Indian School of Business, BITS Pilani, ICFAI and the Institute of Public Enterprise.

Ramakrishnan also said that they would like to finance research projects at IIIT-H with regard to IT interventions for rural development.

May increase interest rates

Andhra Bank has indicated a hike in interest rates in the near future.

An interest rate hike is imminent. In the next few months, we may have to hike interest rates by 50 basis points," K Ramakrishnan, CMD of the bank, said, adding that they would try to insulate educational and agricultural loans from the hike.