Act against SBI for shaming loan-defaulting students: CPI

Condemning the State Bank of India (SBI) for shaming students and their parents for defaulting education loans by displaying their photographs, the Communist Party of India (CPI) Friday urged action against the bank officials.

In a statement issued here, the state CPI said: "Indian industrialists get about Rs.5 trillion in annual tax concessions. Big industrial groups do not repay loans and these are written off as bad debts. Not worrying about these, the central government and the SBI are shaming students who had availed education loan. It is highly condemnable."

The Bodinayakanur branch of SBI in Theni district, around 515 km from here, displayed photos of students and their parents for defaulting on their educational loans.

"Is the SBI willing to display the pictures of its corporate defaulters? Does it have the guts to publish the names of its top 100 defaulters? SBI shamelessly quote the Banking Regulation Act for not disclosing the big corporate defaulters. But in the case of poor students, it feels the banking law does not apply," Education Loan Task Force (ELTF) Convenor K. Srinivasan told IANS.

ELTF guides students on rules and regulations governing the education loans offered by nationalised banks and it also insists students repay their dues.

According to Srinivasan, banks should meet the student borrowers at least once a year which will have a positive effect on the business in the long run.

"Bank officials try to create a wrong picture that education loan portfolio is default-prone. They are reluctant to handle this portfolio. It is really not so since the ticket size is very small compared with the loans and defaults of big industries," Srinivasan said.

He said as per the scheme, loan repayment period could be as long as 10 years. The loan becomes due one year after completion of the course or six months after the student gets a job, whichever is earlier.

"The bankers are insensitive and if any student takes some drastic action after being shamed, will SBI take responsibility?" Srinivasan asked.

SBI officials were not available for comments.