Extending bank loans for educational purposes has been recognized as one of the priority sector lending activities by the RBI. Between 2013-14 and 2015-16, Public Sector & Private Sector banks extended educational loans amounting to Rs 25736 crore to 21.79 lakh beneficiaries as per the data shared by the government in the Rajya Sabha.

92% of the Educational Loans extended by Public Sector Banks

Between 2013-14 and 2015-16, the Public Sector Banks extended educational loans amounting to Rs 23727 crore. These loans were extended to 19.42 lakh beneficiaries across various States/UTs. The Private Banks on the other hand extended educational loans amounting to Rs 2009 crore during the same period to 2.36 lakh beneficiaries. It has to be noted that the amounts refer to the educational loans classified under priority sector lending.

While the Quantum of loans increase, number of beneficiaries comes down

The total amount of priority sector lending under educational loans in India by Public Sector Banks has increased from Rs 7060 crore in 2013-14 to Rs 9049 crore in 2015-16. During the same period, the number of beneficiaries has come down from 6.65 lakh in 2013-14 to 6.21 lakh in 2015-16. The lending by Private Banks has come down from Rs 690 crore in 2013-14 to Rs 625 crore in 2015-16. But, the number of beneficiaries in respect of private banks has actually increased from 69.9 thousand in 2013-14 to 98.2 thousand in 2015-16.

Tamil Nadu accounts for 21% of the Educational Loans by Public Sector Banks

As far as educational loans disbursed by Public Sector Banks under priority sector are concerned, 20.8% of the total amount was disbursed in Tamil Nadu between 2013-14 and 2015-16. Andhra Pradesh was second with 11.2% of the total loan amount followed by Maharashtra (10.2%). Eighteen (18) States/UTs each received less than 1% of the total loan amount during this period. Tamil Nadu also had the most number of beneficiaries with 5.84 lakh followed by Kerala (2.56 lakh).

Of the total amount of educational loans disbursed by Private Banks during the same period, Kerala accounted for 37.8% followed by Tamil Nadu with 24.8%. Both Karnataka & Kerala together accounted for more than 60% of the total educational loan amount by Private Banks. A total of thirty (30) States/UTs received less than 1% each of the total loan amount by Private Banks.

Total Educational Loan outstanding at Rs 61831 crore

As on 31^st March 2016, the total educational loan outstanding was Rs 61831 crore. As expected, the most outstanding was in Tamil Nadu (Rs 15297 crore) followed by Kerala (Rs 8385 crore). The total outstanding was more than Rs 3000 crore in eight states. As of 31^st March, 2015 the NPA in the education loan given by Public Sector Banks was 5.99%.