NPAs in education sector hike to 9% in FY18

Franchise India Bureau
Franchise India Bureau Aug 16 2018 - 1 min read
NPAs in education sector hike to 9% in FY18
Education sector NPAs have shown a rising trend in the past three financial years.

This year marks the third fiscal year when bad loans in the education sector have shown a rising trend. The percentage of Non-Performing Assets (NPA) has risen to 9% of the outstanding by March this year.

According to the Indian Banks Association (IBA) model for education loan schemes, banks provide 15 years repayment period while disbursing loans. This scheme also allows a 1-year moratorium on terms of repayment after the completion of education. Additionally, under this scheme, one has a moratorium on repayment on spells of conditions such as unemployment, underemployment, etc. This is applicable at least 2-3 times during the repayment cycle period.

In past two years, NPAs on education loans rose from 7.3% in March 2016, to 7.67% in the March of the following year. In March 2018, it jumped to 8.97%. Out of the Rs.71,724.65 crores outstanding education loan by the end of FY17, Rs.6,434.62 crores were comprised of NPAs.

As a step to bring down this figure, Finance Ministry in collaboration with Parliament has launched Vidya Lakshmi Portal, where students can apply, view and track their loan application. 

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