LAST WEEK WE ASKED: Do you think banks rating B-school students will solve the bad loans issue?
As the number of bad loans are increasing, banks need to seek some measures for respite. By rating B-school students, banks can accordingly fix terms and conditions for them as well as track down the particular student’s performance. Thereby they can analyse students’ future ability to repay loans. This will help banks in minimising cases of bad loans, at least in the education sector.
Shivam Chhabra, Integral University, Lucknow
The bad loan issue not only affects banks but also the whole economy. B-school are now emphasising on credibility and worthiness of loan seekers. Moreover, customer relationship is getting increased weightage on educational campuses. Perhaps, an increased level of knowledge in these areas in B-schools may help banks solve the bad loans issue to some extent. Jimit Parikh, St Kabir Institute of Professional Studies, Ahmedabad There are surfeit causes for bad loans — default on education loans being one of them. By rating educational institutions on placements, academic standards, intellectual capital and connection with industries as well as rating students on the basis of marks obtained in the qualifying exam, banks can structure their loan product better. These measures will definitely mitigate the issue of bad loans in the education sector and will also contribute to achieving inclusive growth. Though this is a step in the right direction, government also has to take some sector wise specific decisions to mitigate bad loans. Only then the problem can be solved.
Nilaya Mitash Shanker, Shanker, Shri Ram Swaroop Memorial College of Engineering and Management (SRMCEM), Lucknow
The quarter by quarter increase in non-performing assets (NPA) is a major concern for banks which leads to tightening of screws on the common man. According to the Reserve Bank of India, a major chunk of NPA include loans given to the agricultural sector whereas the proportion to the retail sector, especially educational loan, is very minimal. Thus, these does not make any huge difference in the overall kitty of loans provided by banks in the education sector. However, bank rating of B-schools gives the former a surety that their dues will be received on time and working capital of banks maintained.
Harsh Mehta, St. Kabir Institute Of Professional Studies, Ahmedabad
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THIS WEEK'S QUESTION: Do you think summer internships are important for management students? Are two months enough for the same?