Monday, August 12, 2013

SBI displays photos to shame educational loan defaulters

A humiliation to many poor young graduates who had obtained educational loan from the State Bank of India's branch at Tamil Nadu's Bodinayakanur in Theni district: a few days ago the branch displayed photographs of defaulting students and their parents.

The bank believes that shaming the defaulters would pressure families to repay the outstanding educational loan, ranging from Rs. 40,000 to Rs. 5 lakh.

Outraged, students in the area protested against the bank.
One of them, who preferred to remain anonymous, said, "This is a shame. In rural areas, none would marry us. We are poor people, now ashamed."

For the poor parents of the first-generation students, interest on educational loan is a huge burden. Many even opt to defer interest payment till their children secure jobs. But thanks to recession and job cuts, even after higher education, many remain unemployed or draw poor salaries.

They are unable to repay the loan amount and the accumulated interest. Owing to the poor quality of education in rural areas, many are not just employable as well.

Educational loan scheme is just over a decade old in India. With the economy not so strong, the system is facing challenges in recovery.

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